Ireland’s minimum wage is set to rise to €9.55 an hour from €9.25 an hour starting from January 2018, as recommended by the Low Pay Commission. The increase could benefit up to 150,000 workers across Ireland.

The announcement was made by An Taoiseach, Leo Varadkar, Tánaiste and Minister for Enterprise & Innovation, Frances Fitzgerald, and Minister of State for Disability Issues Finian McGrath.

In its report to the Tánaiste and Minister for Enterprise & Innovation, Frances Fitzgerald, from the Low Pay Commission set out the range of data it considered in recommending the increase, including risks to the economy and international comparative research.  The Commission also sought submissions from interested parties and consulted directly with workers and employers in relevant economic sectors.  

“The Government welcomes the recommendation from the Low Pay Commission to increase the national minimum wage by 30 cents to €9.55 per hour,” Varadkar said. “It would work out as a €12 increase in a full 40 hour week. This would be a modest increase but it’s ahead of the rate of inflation and average increases in earnings. It would be the fourth increase in the minimum wage since 2011, and the second under this Government, and a further step towards the Programme for Government commitment for a minimum wage of €10.50.”

“The Government wants everyone to have an opportunity to share in the ongoing recovery. Increasing the minimum wage will help to achieve that goal by providing an absolute minimum for earnings,” Varadkar said. “We intend to formally respond to the report this autumn, including its recommendations regarding employers’ PRSI (Social Insurance Contributions), in the context of Budget 2018.” 

Fitzgerald also commented: “Increasing the minimum wage is just one tool in a wider Government programme to help the lower paid and incentivise people into work. New childcare subsidies are coming into effect in September and I am progressing a set of new proposals to address zero hour contracts, low hour contracts, banded hours and related matters to help combat the issues of so-called precarious employment in a balanced way.”

“The Low Pay Commission is non-political. It draws on a range of data in reaching its recommendations and takes into account issues such as job-creation, competitiveness, currency exchange rates and international comparisons. These issues are also considered in the wider context of Ireland’s continued emergence from recession and the potential impact of Brexit,” Fitzgerald said.

Labour spokesperson on Worker’s Rights Senator Ged Nash also commented on the rise. “While modest, the Low Pay Commission’s recommendation to increase the rate by 30 cents an hour to €9.55 is a welcome but very small step in the right direction,” Nash said.

Trade union Unite welcomed the rise, but said it was €2 short of the living wage, calculated at €11.70 an hour.

Meanwhile, Retail Ireland, which represents the retail sector, expressed concern over the increase.

"With little to no inflation in consumer goods and growing concern over the impact Brexit is already having on the retail sector, there is absolutely no economic basis for a further increase to minimum wages,” Retail Ireland director Thomas Burke said. "Such a rise at this juncture would significantly affect retailers' ability to remain competitive against a backdrop of falling prices and rising costs within the sector."

Ibec, a group that represents Irish business, stated there is no justification for the increase.

“Ibec supports the national minimum wage in principle, but any increase must be in line with economic realities,” Director of Employer Relations at Ibec, Maeve McElwee, said. “Current trends provide no justification for such a substantial increase at a time when many Irish sectors are so exposed to competitive threats from Brexit. Any further cost burdens imposed by minimum wage increases would be extremely difficult for these sectors to withstand.”