Policy in Action 9 April 2024

Policy in Action 9 April 2024

At least 80 per cent of workers should be covered by collective bargaining agreements and the National Minimum Wage (NMW) should move on a phased basis to a “genuine living wage,” according to a recent report published by the Irish Congress of Trade Unions (ICTU).

In the report, Challenging myths and improving working conditions in a strong economy, ICTU challenges what it says is “a lot of rhetoric and anecdotes about the rising cost of doing business in Ireland today.” It seeks to represent the voice of workers and to rebut “the rather weak and false arguments put forward by some business groups in the last few months.”

Reducing in-work poverty
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According to ICTU, European Union (EU) countries where at least 80 per cent of workers are covered by collective agreements between trade unions and employers are also the countries that tend to have high levels of minimum wages relative to the average wage, and a small share of low-wage workers.

The trade union body calls on the Government to outline how it plans to respond to the EU Adequate Minimum Wages Directive which seeks to reduce in-work poverty and inequality by improving the adequacy of statutory minimum wages as well as the promotion of collective bargaining. It also requires Member States with a collective bargaining coverage of below 80 per cent to provide for a framework of enabling conditions for collective bargaining to be implemented.

Ireland has a collective bargaining coverage of approximately 34 per cent.

In-work poverty in Ireland
.

The report states that Ireland was one of just three Member States that saw an increase in in-work poverty[1] between 2021 and 2022, from 4.3 per cent to 5.3 per cent, with the rate for females rising from 2.9 per cent to 4.5 percent and the rate for males from 5.4 per cent to 6 per cent.

To support the wages of low paid workers with children, the government paid out €1.1 billion in Working Family Payments between 2020 and 2022, according to the report. Women accounted for over two-thirds of recipients in 2022.

ICTU reports that in 2020 the European Commission identified Ireland as one of the Member States where achieving a statutory minimum wage of 60 per cent of median wages of full-time workers would reduce the need for state spending on benefits to support low-paid working families, estimating a ‘saving’ of approximately 0.25 per cent of GDP in Ireland.

National Living Wage
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Therefore, ICTU welcomes the Government commitment to replace the National Minimum Wage with a National Living Wage, benchmarked to 60 per cent of the median hourly wage of all employees, on a phased basis. The new National Living Wage is due to be in place by 2026.

Once the EU Adequate Minimum Wage Directive is transposed into Irish law by November 2024, Ireland will be obliged to be guided by criteria that aim to achieve a decent standard of living, to reduce in-work poverty and to narrow the gender pay gap when setting any new national minimum (living) wage.

ICTU also supports Government plans to introduce a statutory sick pay scheme, a pension auto enrolment scheme, new parental leave/benefit rights and domestic violence leave, a right to request remote working, PRSI increases to keep the pension age at 66, and the introduction of a new bank holiday.

For Early Years and School Age Care settings, it will be critical that these important supports and allowances for staff are funded in full by continuing and increasing State investment. The 30,000-strong workforce cannot be left at the mercy of annual processes, and the government needs to agree and implement a 5-year plan which addresses the pay and conditions and professionalisation of the sector. Otherwise, the commitment to have a graduate-led workforce by 2028 could be jeopardised and the sector will continue to have problems sustaining its workforce.

If you have any questions or would like to know more about Early Childhood Ireland’s policy work, please do not hesitate to contact us at policy@earlychildhoodireland.ie

[1] Individuals are at risk of in-work poverty when their equivalised yearly disposable income is below 60% of the national household median income level. (Source: Eurofound)

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