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The Living Wage points to broader understanding of low pay

Posted on July 04, 2014 by Micheál Collins

Living wage ROI 2

Yesterday’s launch of the Republic of Ireland Living Wage adds to a growing international set of similar figures. The number, which will be updated annually from here on, was calculated by the Living Wage Technical Group. It is €11.45 for 2014.

 There are a number of contexts for this figure: 

  • The attention given to this issue underscores a growing appreciation for society to consider low wage rates not just in the context of competitiveness and competition but also in the context of income adequacy and living standards;
  • It reflects a belief that across societies individuals working full-time should be able to earn enough income to enjoy a decent standard of living;
  • The latest CSO poverty figures indicate that of all those in poverty, 12.6% are at working (the working poor). They represent about 95,000 workers.
  • Eurostat found that in 2010 20.7% of workers in Ireland earned below the low pay threshold of €12.20 per hour – calculated as 66% of national median hourly earnings. See more details here: http://www.nerinstitute.net/blog/2013/01/02/one-fifth-of-workers-are-lowpaid/
  • The distribution of direct income in Ireland (earnings from all sources) is heavily skewed. The latest data, for 2012, show this pre-distribution of income is such that the top two decile receive more than 50% of all direct income and the top three decile receive more than 66% of all income. The top 20% receive 23 times the share of the bottom 20%.
  • The latest Department of Social Protection annual report shows that in 2013, the number of working families in receipt of Family Income Supplement (FIS) increased by almost 30% to 42,000 families, supporting over 90,000 children

Over time Ireland has had a remarkably stable income distribution. The achievement of that stability has been principally driven by the redistributive system, with improvements to social benefits constantly counteracting a growing inequality in direct income. It seems time that we gave greater attention to the divide in earnings; and low pay in particular.

Yesterday’s arrival of a Living Wage for Ireland marks an important starting point. Its implementation offers significant potential to enhance the living standards of low income workers and their families.

 

BACKGROUND INFORMATION

 

The Living Wage website is here

The 2014 Living Wage report is here 

The Living Wage Technical Groups’ document on the calculation of the Living Wage is here

Some  previous papers, blogs and presentations from me on this issue are here:

     Research paper on a Living wage for the Republic of Ireland

     Research paper on the Impacts and Challenges of a Living Wage

     Addressing low income and low pay (presentation)

     The Living Wage: Incomes, Work and low pay in Ireland (presentation)

     Using Minimum Incomes Research for Policy (presentation)

     Low income and low pay in Ireland (presentation)

     Blog on Living Wage impact

     Blog on Earning in the Republic of Ireland - the four quarters

     Blog on understanding earning a key context for policy formation

     Blog on 'Is the living wage such a mad idea?'

 

Posted in: IncomeInequalityLabour costsLiving wageWages

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