Low Pay Commission terms of reference into 'Living Wage' report agreed but will it ever really happen?

The Low Pay Commission has formally begun work on examining how Ireland can move towards a living wage. The minimum wage over the last ten years, has gone from just €8.65 in 2011 to €10.20 today.

A living wage is described as a wage which makes possible a minimum acceptable standard of living. It is evidence based and grounded in social consensus

In 2020 the living wage for Ireland was calculated by campaigners to be €12.30 per hour.

According to the website, https://www.livingwage.ie/in principle, "a living wage is intended to establish an hourly wage rate that should provide employees with sufficient income to achieve an agreed acceptable minimum standard of living.

"In that sense it is an income floor; representing a figure which allows employees afford the essentials of life. Earnings below the living wage suggest employees are forced to do without certain essentials so they can make ends-meet."

The current Programme for Government commits to “progress to a living wage over the lifetime of the Government”. How this commitment will manifest itself in real terms through, is anybody's guess.

Confirming the "terms of reference" for the low wage commission, Tánaiste Leo Varadkar said:

“The pandemic has caused us to redefine frontline or essential workers and to reconsider the value we place on their work and the reward they should get for that work.

“Traditionally, when we thought of frontline or essential workers, we thought of nurses, doctors, Gardaí or firemen. Generally, people working in the public service with relatively well paid, secure and pensionable jobs. Now with think also of retail workers, drivers, security guards, transport workers and cleaners. 

“One of the legacies of the pandemic must be a more inclusive society that rewards work and enterprise better. That means better terms and conditions for lower paid workers. Moving to a living wage is an important part of this. Of course, in doing so we need to recognise that many businesses are closed and are now loss-making, so we must do it in way that that does not cost jobs or cause people’s working hours to be reduced. That would be counter-productive

“Although the Low Pay Commission has done some initial work, we now have the agreed terms of reference to allow the Commission formally begin its research and advise us on an appropriate model in an independent and evidence-based way so that we can move towards a living wage over the period of this Government.

“This work will build on the improved social protections for workers over the last five years, including paternity benefit, parental leave, our plans for a statutory sick pay scheme and the extension of social insurance benefits to the self-employed.”

The Low Pay Commission study will examine the design of a living wage in an Irish context. It will consider the policy, social and economic implications of a move to a living wage and the process by which Ireland could progress towards a living wage.

It will do this by looking at international evidence on living wages, examining different calculation methods and examining the policy implications of moving to a living wage in Ireland.

The paper will conclude by outlining a process by which Ireland will progress towards achieving a living wage. It is expected that the report will be completed in the second half of 2021. Following completion of the report, the Commission will submit the report to the Tánaiste for consideration.

The current minimum wage in Ireland has steadily increased over the last ten years, from €8.65 in 2011 to €10.20 today.