The Irish Congress of Trade Unions has responded to an Economic and Social Research Institute report, which said increasing the minimum wage would not help tackle poverty. Congress official Liam Berney reacted to the report, saying the debate on low pay should not be driven by “flawed assumptions and simplistic conjecture, given that low pay is such a serious problem in Ireland.”
Berney said the minimum wage was “not designed to address poverty,” which is best tackled through social protection measures. And he said people in Ireland receive a far lower level of social wage – things like free or cheap healthcare – than their counterparts across the European Union.
Meanwhile, The Vincentian Partnership for Social Justice recently published its 2016 update in its minimum essential standard of living series. The report emphasises the crucial role that in-work social protection supports have in keeping households above the poverty line.
While all increases in the national minimum wage are welcome, it said lifting households out of poverty requires a focus on social protection measures first and foremost.
The new programme for Government promises to “reduce poverty levels by increasing the minimum wage to €10.50 per hour over the next five years.” But, according to the ESRI, the link between low pay and household poverty may not exist in the way Government thinks it does.
Most workers who earn the national minimum wage, an ESRI report explains, live in households that earn at or above the national median for household income. Just 8% of low paid workers live in households that are at risk of poverty. Increasing their pay does nothing, or very little, to raise other households out of poverty.
ESRI says poverty is predominantly a product of unemployment, not low-pay. Raising the national minimum wage at the cost of reducing benefits, as has been proposed in the UK, takes money from those who need it most and gives a little extra to those who could go without it.
Minimum wage policies do not have an effect on households where nobody is at work.
