Ireland’s minimum wage increase causes some workers to reduce working hours, new study reveals

The RECENT increase in the minimum wage has resulted in some employees having reduced hours, while others have seen an increase in average take-home wages.

Following the recommendation of the Low Pay Commission, Ireland’s minimum wage has increased every year from 2016 onwards.

Minimum wage workers have their hours reduced


Minimum wage workers have their hours reducedCredit: Getty Images – Getty

An ESRI study, funded by the Low Pay Commission, looked at the cumulative impact of three recent minimum wage increases on the number of hours worked. minimum wage workers.

Between 2016 and 2018, the minimum wage has tripled, increasing from €8.65 to €9.55 per hour.

The results of the study show that, over the same period, the number of hours worked by minimum wage workers has decreased by almost an hour per week.

However, the minimum wage increase is large enough to offset any income loss due to reduced hours, leaving average minimum-wage workers financially better off.

The effect on working hours is greater for employees in certain sectors.

Minimum wage workers in the “industrial” sector, which mainly includes manufacturing workers, fell by three hours per week between 2016 and 2018.

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Likewise, those working in the accommodation and catering sectors lose 2.5 hours per week.

Again, for average minimum-wage workers in these sectors, the pay increase is large enough to offset any income loss resulting from working fewer hours.

For many minimum wage workers, such as young part-time workers, the minimum wage is a temporary stepping stone to higher pay.

However, for some employees, minimum wage employment may be a more permanent deal.

Minimum wage workers in the manufacturing sector are older and more likely to work full time than other minimum wage workers.

As a result, reduced working hours among this group may be cause for concern as they may be more dependent on minimum wage employment to meet financial commitments.

‘tracking the IMPACTs’

Dr Paul Redmond, an author of the report, said: “As the minimum wage rises, it is important that we monitor the impacts on employment.

“Our research has found a reduction in the number of hours worked for all minimum wage workers after three recent minimum wage increases.

“However, people working in the manufacturing and housing and food sectors have reduced their working hours more.

“Even so, the minimum wage increase appears to be large enough to offset any drop in earnings from working fewer hours.”


Ultan Courtney, chair of the Low Pay Committee, said: “The Low Pay Committee takes an evidence-based approach to making its recommendations.

“The report released today adds to our knowledge and understanding of the impact and effects of raising the national minimum wage.

“I am pleased to note that the report shows that average minimum wage workers have improved financially as a result of the increase in the national minimum wage, with the increase recommended by the Low Wage Commission sufficient. large enough to offset any effects of reduced hours.” Ireland’s minimum wage increase causes some workers to reduce working hours, new study reveals

Fry Electronics Team

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