Taking the Lead on the Living Wage
The Government has asked the Low Pay Commission to come up with proposals to implement a living wage. This follows its commitment to introduce a living wage by 2025.
This is a welcome development. However, we should be cautious about what to expect.
First, the timeline to just the beginning of the implementation stage could be as long as 18 months. The Low Pay Commission will probably send its proposals to government by the end of the year.
The Government will deliberate on the proposals and engage in consultation with stakeholders. It is only then, after achieving a consensus, will they proceed. This will necessarily take time.
Second, a major issue is how to calculate a living wage. The Living Wage Technical Group, of which SIPTU is a member, has estimated the Living Wage to be €12.30 per hour. This is based on a basket of goods and services deemed necessary to achieve a minimum adequate living standard. However, the Government may adopt another method and possibly a lower, living wage level.
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Third, the Living Wage is based on the minimum income for a full-time permanent worker. So it’s not enough to earn €12.30 per hour. It’s about earning €480 per week or €25,000 per year.
The Living Wage is about quality employment. That is why the Government must address issues of precariousness, temporary work, and under- employment alongside setting a living wage.
Fourth, the living wage, however it is calculated and at whatever level it is set, will probably be phased in over a number of years. So it may not be until 2025 and quite possibly later in the decade before the living wage is fully implemented.
It is not just a matter of mechanically increasing the minimum wage to the living wage. Collective bargaining can play a key role in ensuring a flexible, problem-solving approach to implementing the living wage, especially in low-paid sectors which could face considerable difficulties.
Further, were the Government to tackle high living costs (e.g. rents, public transport, childcare etc.), it would make it even easier to implement a living wage.
There is the danger the Government will set a woefully inadequate level for the living wage, one that has no relationship with living costs or living standards. Or that exploitative employers will demand massive public subsidies and, so, deprive the Exchequer of badly needed resources for social and economic investment.
That is why SIPTU members and the trade union movement must take the lead in the debate over the living wage and the strategies needed to ensure that we abolish low pay and raise living standards for hundreds of thousands of workers.