Paul Murphy warns 80¢ hike equals pay cut for lowest earners
Paul Murphy addressed the proposed minimum wage increase, arguing that an 80¢ rise would amount to a real-term pay decrease for the lowest paid workers. He pointed to a Low Pay Commission recommendation of €12 and pressed for stronger collective bargaining protections and legislative changes.
Immediate impact on low-paid workers
Paul Murphy argued that an 80¢ increase would not keep pace with inflation for the lowest paid, noting that between 2022 and 2023 a 15% rise would have been needed while the proposal amounts to roughly 9%. He said many low-paid workers will not benefit from the recent £11 billion budget package because the bulk of that package is delivered through cost-of-living measures that do not reach them.
Who is left behind by the budget measures
He outlined who is most affected - single workers, young people, part-time staff, migrants and women - and explained why they miss out on key measures. He said they will not qualify for the €800 tax package, will not benefit from the 25% childcare reduction or moves to free school books, and that for many their wage packet is the only buffer to maintain living standards.
Low Pay Commission recommendation and union dissent
Paul Murphy referenced the Low Pay Commission's recommendation of a €12 minimum wage, describing it as a level that would only keep lowest-paid workers 'standing still' relative to 2021. He also noted that unions did not agree with the increase and described the commission's decision-making as a majority vote after a year-long process of deliberation.
Expanding collective bargaining and legal measures
He called attention to the Adequate Minimum Wages Directive requirement to increase collective bargaining coverage, estimating current coverage at roughly 32-40%. He said the government has accepted recommendations to expand the Joint Labour Committee system by removing an employer veto, to strengthen the 2015 legislation on Labour Court claims, and to legislate for good-faith bargaining so employers are required to negotiate - citing the Lloyd's Pharmacy dispute as an example of employer refusal to engage.
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Thanks a lot for the presentations. If the Government sticks with the proposal of an 80¢ increase, is it fair to say that they are deciding on a real-term pay decrease for the lowest paid workers in the State? So, between the 2022 and the income in 2023, we would have had to see a 15% increase. We are not going to see that, we are just going to see about 9%. Now, we have been told and is correct that wages cannot chase inflation and that is why we had the £11 billion budget package only two weeks ago. and the bulk size of that, the lion share of that was cost of living measures. But as I mentioned, a low pay minimum wage workers, first of all, they are not going to benefit from the £1.1 billion tax package because they do not earn enough to get that €800 per year. And because they are mostly young and part-time migrants and women, they are not going to benefit from a lot of the cost of living packages. So, if you are a single worker, no children, you are not going to benefit from the 25% reduction in childcare, which we really welcome, the move to free school books, again, which we usually welcome. So, you might get the benefits of the wage or the income disregard increases in the medical card. So, you may be able to get free GP care, free at the point of use and you will get the reduction in public transport and if you are able to live outside the family box room, you may see the benefit of the tax relief. So, you have workers that are earning too little to benefit from the tax package, the very generous tax relief package. And because of their circumstances, they are not going to benefit from the cost of living, a lot of the cost of living measures. And the vast majority won't be on social welfare income supports if they are working full-time. So, they are caught in between those two stools of their wages is the only avenue available for keeping up their living standards. And in that respect, the decline in the real wage is really important to this cohort of group. We absolutely understand what government was trying to do with the budget. And it goes back to Deputy O'Reilly's part about public sector workers agreeing to a below inflation increase. Many of those workers are going to benefit from the childcare package, the free school books, and the other very good cost of living, permanent cost of living measures around that social wage that government have introduced. But for this cohort of workers, their wage packet is their only buffer to keeping their living standards. And what would you two call on the government to do in the finance bill? What level of increase? Well, our colleagues on the Low Pay Commission have recommended €12. And €12 is just to keep them standing still, to keep them where they were in 2021. And that's what we've said. And then to look again at our roll out, our phasing in of this living wage. Earlier on, you mentioned about a consensual approach and the problems with that. Just to unpack that a little bit, right, because the unions didn't agree with this increase. So that doesn't look very consensual, whereby the force representing the vast majority of workers in this country, representing workers in this country who make up the vast majority, their consent wasn't granted this is an adequate wage increase. So can you explain that? Well, it's majority rules. As you know, at the ballot box, not everybody has to vote for you. But once enough people do, you get to see at the table. So it's the same. And, you know, to be fair, you know, it's a year of work put in coming to that decision. It's not a show of hands around. Ultimately, that's what it comes down to. But there is a lot of trying to balance as Deputy Bruton laid out there. It is about, you know, the cost for employers to make sure that it is adequate, but sustainable. It's really important. And just to say, if you look back at the history of the Law of Pay Commission's reports, there have been on nearly every occasion, either a minority of party on behalf of an employer group, on behalf of an independent or on our behalf of union representatives. So it's not an unusual thing for that to happen. Employers have done it as well. So something you mentioned earlier, which I think is a very important part of the Adequate Minimum Wages Directive, is this thing around increasing the total number of workers covered by collective bargaining. So in the directive, it sets out that basically the government should provide a framework for enabling conditions for collective bargaining, either by law, after consultation of the social partners or by agreement with them, and should establish an action plan to promote collective bargaining. Where is that at? What level of consultation is taking place with the unions? So we estimate that collective bargaining coverage in the economy is somewhere between 32, 35, around 40, you know, 40% at its maximum. So in advance of the directive, there has been engagement at a high level group, kind of comprising employer representatives and union representatives. And there's three very important recommendations that the government have now accepted around how they increase collective bargaining coverage. So it's increasing the use of the Joint Labour Committee system and removing the veto that employers have from the operation of that system. Increasing the adequacy of the 2015 legislation, kind of where you can make a claim to the Labour Court, if your employer refuses to engage in collective bargaining and making that process much easier. But more importantly, to encourage and to provide a legislative framework for good faith bargaining, where employers will be required to negotiate and have discussions with union representatives, where unions represent employees in an enterprise. So people remember the Lloyd's Pharmacy dispute, where that employer just simply kind of refused, and there's been several of these disputes, but the most recent one has been in Lloyd's Pharmacy, where that employer just simply refused to negotiate with the union who represented workers. That will not be possible anymore if the report of the high level group is transposed into law in the way that the high level group report envisages a will. There are other provisions that the directive around how you use public procurement to increase collective bargaining coverage as well. How that's to be done is yet to be worked out. But as you say, the directive is a very important directive, and the transposition of that directive will be crucially important. So members of the Oireachtas will have a strong role in ensuring that the provisions of the high level group are implemented. Active measures to increase collective bargaining coverage are put in place. Thanks a lot. Thank you. You
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