A fifth of workers in Ireland now earn less than €12 an hour, according to a new report on low pay. ‘
Low pay republic’, compiled by SIPTU economist Michael Taft, argues that 370,000 people earning so little amounts to a “low-pay crisis” in Ireland, with women and young people disproportionately affected.
The report found that low pay here is significantly above the European average, with Ireland ranking eighth out of the 27 EU countries and second highest among its wealthier members.
“The economy suffers from loss of demand due to the reduced purchasing power of low-paid workers. This also results in lower business turnover and investment,” said Michael.
The worst affected sector is hotels and restaurants, where over half of all employees are low-paid. Other poorly-paid sectors include administrative services, retail, arts, entertainment, food production and personal services.
Nearly 23% of women, compared to 17% of men, and over 30% of young people under 30 years are affected by the low pay crisis.
“For workers, it undermines their living standards and life quality. And the economy suffers from loss of demand due to the reduced purchasing power of low-paid workers. This, in turn, results in lower business turnover and investment,” said the author.
The report has described low pay as being economically irrational, fiscally degrading and, socially obscene. “Low pay can be eliminated from the economy, but this requires a multi-faceted strategy including a radical extension of collective bargaining and a robust method governing minimum wage increases,” it says.
Even in in manufacturing and health, two sectors with conventionally higher than average wage levels, there are still nearly one-in-seven employees on low pay.
Both Fórsa and ICTU made submissions to a Government consultation on an EU draft directive on low pay and collective bargaining earlier this year. Since then, an Economic and Social Research Institute (ESRI) report also found that increases in minimum pay don’t lead to higher labour costs.
The SIPTU report was published to mark ‘world day for decent work’ on 7th October, which is promoted by the International Trade Union Confederation. You can find the full report HERE.
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