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The Case for a Living Wage

Published on 31 May 2021 at 13:14

As employers call for changes around the rates Pandemic Unemployment Payment (PUP), coupled with staff shortages, poses the question: is it time to fast track the living wage proposal?

 

The www.livingwage.ie website currently estimates the wage to be at €12.30 an hour; €2.10 higher than minimum wage and translates to €25,043 a year which represents roughly 56% of the average median income in Ireland.

 

The introduction of the living wage would ensure that all workers earn a fair share, and above all that they can afford the cost of living in Ireland. While the current government is committed to the introduction of the living wage it is not clear when and how it will occur.

 

Currently, 23% (according to the OECD) of the Irish workforce are on "low-wages" otherwise meaning those who earn between minimum wage and the living wage of €12.30 per hour. At least 6% of the workforce earn the minimum wage. It is important to note that the minimum wage in Ireland represents roughly 46% of the median income. Furthermore, according to the ESRI, those who earn less than 60% of the median income are classified as being at ‘risk of poverty’.

 

The minimum wage in Ireland currently stands at €10.20 an hour, that is: €1,768 monthly and €21,216 yearly. It is regularly cited that Ireland's minimum wage is one of the highest in the world, and that Ireland are at the top of the charts compared to other EU countries. However very few of them compare it to the costs of living and constantly rising rents as seen in Ireland.  Contrary to this claim, European Foundation research found that Ireland has the second highest minimum wage in the EU. 

 

For context, a report published by the Central Statistics Office earlier this year showed that, on average, prices in Ireland are 35% higher than those in other European Union countries. A recent report published by Daft.ie showed that the average monthly rent in Ireland is currently at €1,414; when it comes to renting a single or a double room are between €500-€700 a month on average in Dublin.

 

Numbeo, a website which compares costs of living between countries, has listed Ireland as the 13th most expensive country in the world in which to live. There are a few reports which have been published by the Eurostat over the past three years which state that Ireland is the 4th most expensive country when it comes to food and non-alcoholic beverages.

 

Another report from 2019 stated that public transport in Ireland is the 9th most expensive in the EU, while a 2020 report by Eurostat also found that Ireland is the 4th most expensive when it comes to electricity bills.

 

There are two ways of dealing with the issues mentioned above: the first and simplest way would be to introduce the living wage, the second would be to reduce the costs of living. The latter however, does not seem very realistic especially when taking into account the fact that many politicians have already tried to focus on this but every time they have failed to come up with concrete proposals and solutions to tackle the rising costs of living.

 

The recent housing bill is a prime example of this. An example proposed in the governments outline found that an "affordable home" in Dublin would be capped at €450,000. At the same time, leaving apartments out from the legislation on ‘cuckoo funds’ raises further questions around the governments effectiveness of trying to tackle the rising costs of living.

 

According to ICTU, TASC and other organisations, sectors such as retail, hospitality, accommodation, produce industry and personal services are at the top of the list when it comes to low pay. Jobs in these sectors are rarely well rewarded financially, employees who work in them face long working hours during the peaks of the seasons and then face cuts in hours when the seasons are over.They work on a contract basis which do not offer stability,  subsequently those who work in these sectors struggle to find a work-life balance. 

 

The COVID-19 pandemic has uncovered deep economic, social and class divides in Ireland. With costs of living increasing coupled with weak proposals on how to effectively tackle increasing costs, a living wage could have potential in reducing inequalities and subsequently match the cost of living. 


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