Ictu calls for €2 hourly minimum wage increase to help low paid workers

In a submission to the Low Pay Commission, the Irish Congress of Trade Unions (Ictu) is pushing for a hike of almost 18pc in the basic statutory pay rate from January.

The umbrella body, which represents unions for 700,000 workers, wants the minimum wage to rise by another €2 the following year.

This would bring it to €15.30 an hour.

Increases in the national minimum wage are usually announced on budget day following a recommendation by the Low Pay Commission.

Owen Reidy, general secretary of Ictu, said the government’s commitment to move to a new “living wage” needs to happen sooner than planned.

The Government has announced that it will roll out a living wage worth 60pc of hourly median wages by 2026.

Mr Reidy said increases to the national minimum wage in the last two years were well behind inflation.

“Hence the need for a more meaningful increase now,” he said.

He said the labour market is tight and work must pay, particularly for the most vulnerable.

“We know that previous government changes to the tax system have benefited middle and high income earners and do not apply to the lowest paid,” he said.

“Countries such as Germany significantly increased their national minimum wage recently, and the sky did not fall in.”

He said employers who will decry Ictu’s call are in many instances those who argued against the concept of a minimum wage two decades ago.

Mr Reidy said lower minimum wage rates for younger people are ill-judged and outdated.

“If you are old enough to work, you are old enough to earn the full minimum wage and apprenticeships should no longer be excluded from the national minimum wage,” he said.

He said young workers have been let down by society and our economy.

“They are in many instances in precarious low-paid work and are all but excluded from the housing and rental market given the immense housing crisis we are living through.”

He said getting to a living wage as envisaged by an Adequate Minimum Wages Directive by 2025 is the minimum low paid and younger workers should expect.

The submission says Low Pay Commission data indicates that if the minimum wage is to rise to 60pc of median wages, it must increase to around €12.50 an hour next year.

“This is an increase of €1.20 an hour or 10.6pc,” it says.

“When account is taken of the fall in the value of the minimum wage over the period 2021 to 2023 and the Central Bank’s forecast rate of HICP inflation for 2024 of 3.2pc, this represents a very modest increase in the hourly rate of the minimum wage.”

It says a €2 an hour increase will give low paid workers a better chance of avoiding work poverty and take their earnings close to the living wage.

The submission notes the economy is at or near full employment and labour demand outstrips supply. It says therefore an increase in the hourly rate will not lead to an increase in unemployment or damage economic competitiveness.