Dáil Debate | Living Wage Bill 2022: Second Stage [Private Members]

I move: "That the Bill be now read a Second Time."

I am delighted to introduce the Labour Party Living Wage Bill 2022. I propose to share time with my colleague, Deputy Nash. For many years, the Labour Party has campaigned for the introduction of a living wage in Ireland. To do so effectively requires a legislative framework and for that reason we have introduced this Bill. It could not be more timely as the cost of living crisis squeezes every household, individual and family throughout the country. We are conscious that inflation is at a 22 year high. We know that a radical package of measures is needed now to tackle that cost of living crisis and to ensure that households will be supported in attempting to meet rising costs. We in the Labour Party believe that Ireland needs a pay rise. It is as part of that campaign we are introducing this Bill.

We know that later this week the Consumer Price Index rate will be published by the Central Statistics Office, CSO, but it will not tell us anything we do not already know. We are hearing it daily from our constituents. I am hearing it from my constituents in Dublin Bay South. We know that inflation is at a record 22 year high and that the essentials on which every household relies are rising in price. We have seen basic groceries like milk, bread and pasta, heating and energy costs and fuel and gas prices increase in recent weeks and months. Rents in our capital city and across Ireland are at historic highs, with a real shortage of rental accommodation, as we all know. That is putting the cost of a secure home outside the reach of many individuals and couples.

Expensive childcare and medical bills, along with education and transport costs, are also squeezing everyone. Everyone is feeling the pinch. We have to see what can be done to address this. The Government has implemented some welcome measures. We welcomed the measures on public transport which took effect earlier this week but we in the Labour Party believe they do not go far enough. While there are welcome initiatives that can and should be taken to address the cost of services such as transport and childcare, on which we have put forward some radical proposals, we also need to see support measures in place to ensure people's incomes are increased. Every day, we are hearing from those whose incomes are no longer enough to meet the rising costs they face. They may be decent pay by relative standards, but that pay is no longer enough to meet the cost of living. We are also hearing from those who are low paid in Ireland. One in five of the Irish workforce is on low pay. We have a low-pay economy. That has always been an issue, but all the more so with the rising cost of living and with rising inflation.

The most effective way to address falling incomes is to ensure that Ireland gets a pay rise. We need to see an increase in real terms in the take home pay that people are left with at the end of the week or the month. That is why we are introducing this Bill. This Bill would go some way to addressing the issue of low pay. In particular, it would transform the minimum structure into a living wage structure. That would have a significant effect, in the first instance on those 130,000 workers who are currently on the minimum wage. The key difference between the current minimum wage of €10.50 per hour and what we are proposing is that a living wage is a mechanism to take into account the cost of living. It is a better way to ensure that people's incomes are sustained and supported through periods of rising inflation and rising prices. This is acknowledged by the Government in that the programme for Government includes a commitment to progress the national minimum wage into a living wage over the lifetime of the Government. Our concern is that we have not seen action in that regard to date. Almost two years into this Government's term, the lack of progress is costing those who need that pay rise now.

I am aware that the Tánaiste has said that he intends to bring proposals to Government by the summer. I am conscious that as recently as January of this year the Tánaiste received a report from the Low Pay Commission, based on academic research, into the introduction of a living wage and that that report has made recommendations, but we have not seen that report. It has not yet been published and so we are not clear as to how Government intends to make for any progress on the transformative strategy that is needed to change the minimum wage into a living wage. I would welcome a response from the Minister of State on that issue. In addition, we hope that the Government will see fit to support this Bill. With this Bill, we are seeking to ensure that the pressure is kept on and that the issue of a living wage is highlighted so that those on low pay are not left behind.

Let us see what would be done if this Bill were to be introduced. When the minimum wage was first introduced over 20 years ago it was set at two-thirds of median average income. Had it been maintained at that rate, it would now be approximately €12.90 per hour or equivalent to the 2021 living wage rate. That is significantly above the current rate of the minimum wage which, as we know, is set at €10.50 per hour. We are conscious that with inflation the living wage will need to increase by somewhere in the region of 7% this year, which would take it to €13.80 per hour by the end of the year. Instead, as I said, this year 130,000 workers are left with the current minimum wage of €10.50 per hour, leaving an hourly wage gap of over €2 between the legal minimum and what is estimated as necessary to sustain a decent standard of living. The most recent increase of 30 cent to the minimum wage in January was inadequate. It has been already swallowed up by rising inflation. As an interim measure, we have called for the minimum wage to be increased immediately by €1 per hour and for a mechanism or pathway to be put in place to increase that over time to a living wage. That is exactly what this Bill seeks to do. It would increase the minimum wage to a living wage and transform the system around the criteria and determination of pay rates and in doing so it would also have a transformative effect on the lives and incomes of those currently on the lowest of pay.

Clearly, we cannot just stop there. We need to see stronger rights for collective bargaining. Again, we in the Labour Party have consistently called for this. We know that in those countries where there are higher rates of unionisation and higher rates of collective pay bargaining, there are better mechanisms to achieve decent and sustainable pay rates.

We believe the State must use its purchasing power more effectively by rewarding and recognising those companies and employers that engage in collective bargaining and pay fair rates, and we are all aware of those employers. There are very decent employers that are doing so. Indeed, many employers currently have to pay increased wages to recruit where there are skills shortages and recruitment crises in sectors such as hospitality, home care and childcare.

I thank the living wage technical group for its work and research over many years, which has contributed to building the case for a living wage. I thank those campaigners and trade union members and activists who joined me and my Labour Party colleagues yesterday at the launch of the Bill. The technical group has given us a definition of the living wage and we are building on that in the Bill.

Turning to the detail of the Bill, to which my party colleagues will speak further, its purpose is to amend the National Minimum Wage Act so as to transform the minimum wage into this living wage mechanism. Section 2 will transform the Low Pay Commission, established my party colleague Deputy Nash when in government, into a living wage commission. While we recognise the Low Pay Commission has done excellent work and carried out important research, it is constrained through legislation from acting further on a living wage framework without direction from the Oireachtas. This is the enabling legislation, therefore, to transform the Low Pay Commission into a living wage commission.

Section 3 will assign new duties to the commission to allow it to make recommendations to transform that minimum hourly rate concept into one of a living wage, while section 4 sets out the new functions of the commission and, crucially, how the living wage will be determined. We are calling in this Bill for the minimum wage to be transformed into a living wage over a period of three years and, once that has been achieved, to enable an annual calculation to be carried out to maintain the appropriate rate of a living income. Critically, the living wage must not be less than two thirds of the median level of earnings of employees in the State, according to the figures most recently published by the CSO. The commission will have a set of criteria available to it, as set out in the Bill, as to how the living wage will be determined.

Before I conclude, I pay tribute to the work of the Irish Congress of Trade Unions and, in particular, its recent report published for May Day, which emphasised the need both for a decent social wage in Ireland and for the Government to bring forward a package of measures to ensure employees' take-home pay will be effectively increased, through both tackling the cost of basic public services such as healthcare, which are free in many other European countries, and ensuring incomes will be increased through both a system of collective bargaining and increases to the minimum wage. This combination of measures will give Ireland an effective pay rise and households and individuals throughout the country a much-needed break. As I said when I launched the Labour Party’s Ireland Needs a Pay Rise campaign, a package of measures is needed. The Bill is one important part of that package, but we have also called on the Government to reduce the cost of childcare radically, extend free GP care to all children under 18, introduce free public transport and freeze rents for three years. Again, this package of measures, taken together, will ensure individuals, households and families throughout Ireland will get the pay rise that is so badly needed to address this crisis in the cost of living.