Thursday, 10 July 2014

The Basic Argument for a Living Wage

A group of organisations, including TASC, supported a project to calculate a Living Wage for Ireland. The evidence about the cost of living is that a single person working full time would have to earn €11.45 per hour in order to afford a dignified life.

Ireland’s Living Wage is based on detailed item-by-item costs for a basic standard of living below which no one should be expected to live. It allows someone to meet the essentials of life, but focused on needs rather than wants. It is a single measure for all of Ireland, with costs calculated for different areas and it represents a weighted average. A technical group involving a range of experts has had a series of meetings to ensure that the calculation is based on a robust method, in line with similar Living Wage calculations done in other countries. A technical paper is available on the Living Wage website giving all of the details.

The idea of a Living Wage is not just a question of social justice, it also makes economic sense as well. It should be a given in our society that full-time work allows someone to live a modest, but dignified life. The fact that the national minimum wage is so much lower (€8.65), as well as the fact that not everyone at work can get full-time hours, makes it clear that many people at work are going without certain essentials to make ends meet.

In London, and elsewhere, businesses and politicians across the political spectrum have supported a Living Wage. Companies and public bodies have pledged to be Living Wage employers. It makes sense for many businesses too, because if people have more money in their pockets that goes straight into local shops and services. When people go without essentials, that customer spending is lost forever.

And a Living Wage is something that can be afforded. On a weekly basis, it is less than €450 per week. Annually, it is less than €23,300, which is well below average wage levels. In the beginning, the national minimum wage was calculated as a proportion of average wages, but that link was dropped and more recently it has been frozen for seven years, but the cost of living has kept on climbing up.

Economists have talked about the possibility for wage-led growth across Europe and North America, based on the principle of getting more money in the pockets of low income workers and families. A Living Wage for workers – along with a living income for families (which includes public services and social transfers for children, like Child Benefit) – is an essential building block for getting the economy moving again, while making sure that no one is left behind by the recovery.

Beginning a national conversation about a Living Wage is important. Some employers will say they cannot afford it – and that has to be taken seriously. But other countries have managed to tackle the cost of living better than Ireland, for example by limiting the cost of housing or providing state subsidies for childcare. Paying workers a Living Wage is part of the solution to the cost of living crisis, but providing better public services and taking action to tackle Ireland’s high prices for food, energy and other essentials is also part of the answer.

The technical group has focused on provided a strong, evidence-based calculation of what is needed to afford the cost of living in Ireland today. It is now up to everyone to take this conversation forward, to ensure that Ireland’s economic recovery is fair and equally distributed.

Technical details of the Living Wage calculations, as well as whose involved in the technical work, can be seen on

This opinion piece was previously published in The Carlow Nationalist on 8th July 2014 under the title 'Project reveals that Ireland's minimum wage is too low'

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