LOW PAY COMMISSION REPRESENTS NEXT STEP IN FAIR PAY FOR WORKERS - KENNY

Posted on June 24, 2015 7:15 PM   |   Permanent Link   

Speaking on the National Minimum Wage (Low Pay Commission) Bill 2015

The establishment of the Low Pay Commission was a key commitment in the Statement of Priorities agreed by the Taoiseach and the Tánaiste in July 2014 and was officially launched at the end of February of this year. It has the important remit of making recommendations to Government in relation to the setting of the minimum wage and to take an evidence based approach in doing so.

A National Minimum Wage was introduced in Ireland under the National Minimum Wage Act 2000. In April 2000 the Irish government set a €4.40 minimum wage. The current rate is €8.65. It has remained at that rate since 2007, except for a period in 2011 when it was cut by €1 by the government of Fianna Fáil and the Green Party. As soon as this Government came to office, it reversed that cut in July 2011. That restoration, and now the existence of the Low Pay Commission demonstrate the commitment by this Government to tackling low pay.

Low pay is not some abstract economic issue. As with other economic issues, for example, the issue of banking debt, the minimum wage is a matter that is the subject of intense debate. Supporters, of which I am one, argue that a minimum wage is necessary to ensure that workers are not forced below the poverty line.

Opponents argue that it is an artificial, government imposed wage, which increases unemployment, as some employers cannot afford to pay the agreed rates. I must say that I have never known an opponent of a minimum wage to experience what it is like to work for low pay.

Arguments in favour focus mostly on the fact that employers should have a responsibility to ensure that workers are given a living-wage. Indeed, this is something that the Labour Party has campaigned for. On the other hand, opponents argue that, in a global economy, where companies and countries compete with each other, there is always the threat of moving production of goods overseas, to where wages are lower and where the workers have fewer rights, hence a low wage should be offered. A recent example of this was the announcement by Cadbury's in Coolock that they were to move production of their Timeout Bar to Poland with the projected loss of 60 jobs. This is known as "the race to the bottom" and such a race needs to be opposed strongly.

I am aware that the Commission plans to take an evidence based approach to the task at hand. This will involve examining existing data; commissioning new research if necessary and consulting directly with workers and employers in order to decide on what the new minimum wage should be. The chairperson is Donal de Buitleir and he is being supported by eight commissioners - Vincent Jennings, Patricia King, Gerry Light, Caroline McEnery, Edel McGinley, Mary Mosse, Tom Noonan and Donal O'Neill.

There is quite a range of issues that will have to be examined before the Commission comes to make its recommendations. These issues include the changes in earnings since the minimum wage was last increased in 2011 and the rate of employment generally. As well as that, the expected impact of a change to the minimum wage on employment, the cost of living and national competitiveness will have to be examined. Changes in income distribution and currency exchange rates will also need to be examined.

The Commission has been given a tight schedule. By mid-July it must settle on an appropriate wage rate, but perhaps this is a good thing as it will bring the issue to a head quickly, and I hope will avoid the issue being procrastinated over. My final view is that the Low Pay Commission represents the next step in the Government prioritising work and fairness as the economy improves. I believe that having a job is the best protector against poverty, and fair wages and conditions are essential to that.

I wish the Low Pay Commission well in its work and I commend this legislation to the House.