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Plans for a mandatory ‘living wage’ to be presented to Cabinet ahead of the Dáil summer recess

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PLANS for a mandatory national “living wage” will be presented to the government ahead of the Dáil summer break, the Tánaiste said.

In a speech tonight, Leo Varadkar suggests that a future living wage could be fixed five years in advance, as has been done in the UK.

He said this would give companies “the time to plan, to prepare and to adapt”.

The living wage is the minimum income required for a full-time, single adult worker to meet their basic needs and afford a decent standard of living.

It is unclear whether the new living wage will replace the statutory minimum wage of EUR 10.50 per hour.

Government sources said the decision would be made by the cabinet.

Mr Varadkar said a new report by the Low Wage Commission shows the concept of a living wage can be traced back to ancient Greece but is understood differently around the world.

“In that regard, the Irish Government will be among the frontrunners in introducing a national mandatory living wage,” he said while delivering the Edward Phelan Lecture at the Royal College of Physicians.

“I intend to comply with the government’s commitment program that we should do this.”

The Tánaiste and the Minister for Enterprise, Trade and Employment appear to favor a living wage based on a percentage of the median wage. He described this as easier than being based on a shopping cart.

Mr Varadkar said opinion was divided on how to calculate the living wage.

He said he sees benefits in the basket and services approach, although that is “subjective”.

He said there will be inconclusive debates about what goes in the basket and how much.

“An alternative approach is to set the living wage as a percentage of the median wage,” he says. “This approach is simpler and gives security.”

The median wage is the salary in the middle of the entire range of all employee salaries in the entire economy.

Mr Varadkar said for the first time in many years that real living standards could fall this year and that a comprehensive anti-inflation strategy is needed.

“I think there should be pay rises and even more increases in pensions and benefits,” he said.

However, he believes it is a mistake to think that wage increases will solve the inflation problem.

“Wage increases will not lower the price of anything,” he said.

“And wage increases could actually add to inflation and make things worse. So we have to look at these things as a group.”

Mr Varadkar said the tax burden should be reduced, particularly for middle-income earners.

He said this is “so they can keep their raise if they get one and at least get something back in their pockets if they don’t.”

“I cannot understand why the opposition parties continue to be against indexation of tax brackets,” he said.

“The case for this has never been stronger than it is now in the face of inflation. If you don’t, the entire burden of raising wages falls on the employer, and some workers are left with nothing if their employer can’t afford it.”

He said next year increased subsidies should be used to reduce childcare costs, while fees for healthcare, public transport and higher education should be reduced.

Mr Varadkar said he had set up a high-level group at the Labor Employer Economic Forum to examine the industrial relations landscape in Ireland.

He said it was time to review collective bargaining and expected to present a final report to the government later this year.

Meanwhile, Mr Varadkar said we are not yet in a post-Covid world.

“We may never be,” he said. “This virus could be with us for eternity. But we are in a very different phase of the pandemic.”

https://www.independent.ie/irish-news/news/plans-for-mandatory-living-wage-to-be-brought-to-cabinet-before-dail-summer-break-41547297.html Plans for a mandatory ‘living wage’ to be presented to Cabinet ahead of the Dáil summer recess

Fry Electronics Team

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