The establishment of a Low Pay Commission in the Republic of Ireland and the renewed focus on low pay and a ‘living wage’ both in Ireland and the UK has revived a growing interest in policies that focus on providing adequate minimum levels of pay for all employees.
A new NERI research paper from Niamh Holton and Micheál Collins models the impact of an increase in the minimum wage to a level equal to two-thirds of median hourly earnings by 2020, a value equivalent to Eurostat’s definition of the Low Pay threshold.
The modelled increase would bring the minimum wage to a level of €12.50 per hour in that year, an increase of 36.6% between 2016 and 2020. In the context of previous changes to the Irish wage floor, the increase is equivalent to the change between October 2002 and July 2007 (+36.2%).
The paper finds that the modelled increase would raise the hourly earnings for almost one-third of the lowest paid employees and reduce the level of inequity in the wage distribution.
The paper is available here.