Submission to the Low Pay Commission
27thMarch 2015
Contact: Paul Ginnell. EAPN Ireland, Equity House, 16 Upper Ormond Quay, Dublin 7, Email: Tel: 01-8745737
The European Anti-Poverty Network (EAPN) Ireland welcomes the opportunity to make a brief submission to the Low-Pay Commission.
The establishment of the Low Pay Commission is welcome and we look forward to speedy action to address the adequacy of the National Minimum Wage and to tackle the problem of precarious work.
The most recent Survey of Income and Living Conditions shows that 5% of workers are at-risk of poverty ( one in ten of those at-risk of poverty), while almost one in five experienced enforced deprivation and 2% of workers experienced both of these and are therefore in consistent poverty[1]. This is unacceptable, particularly at a time when the Government is focused on job creation and promoting a job as a key route out of poverty.
While an adequate hourly rate is a critical element of decent pay for workers it is only one dimension of ensuring that workers and their families have an adequate weekly income to provide them with a decent standard of living. The issue of precarious work, including zero-hour contracts, is a particular problem which therefore needs to be tackled alongside an adequate hourly rate of pay if workers and their families are to have a quality working life and a decent standard of living. Many workers on the National Minimum Wage are not able to access enough hours to bring home sufficient income for them or their families. Women and migrant workers are particular vulnerable to low pay and precarious contracts. It is therefore critical that the Low-Pay Commission tackles both of these issues simultaneously.
In relation to an adequate hourly rate of pay the Living Wage Technical Group has highlighted that an hourly rate of pay of €11.45 for an individual working full-time is necessary to provide them with a basic, adequate standard of living[2]. This highlights the inadequacy of the National Minimum Wage of €8.65 to provide workers with an adequate income.Ireland has also being highlighted as having the second highest percentage of low paying jobs in the OECD.
The 2012 report on decent work by the Mandate Trade Union graphically illustrates the above issues and the fact that many workers do not have an adequate income to have a decent life[3]. The number of hours worked and how income from work interacts with social welfare supports is also highlighted as a critical to ensuring a decent standard of living. There are also particular issue for low-paid workers who have dependents.
Access to Social Welfare Supports
Access to a quality job which provides workers with a wage that enables them and their families to have an adequate standard of living, should be the goal. However, many low paid workers rely on access to social welfare supports to supplement their income. This includes access to jobseekers payments, Family Income Supplement, the new Back to Work Family Dividend etc. These are all essential supports for low paid workers which supplement the inadequate pay from employers. However, elements of the social welfare system are inflexible and many very low paid workers cannot qualify for or access supports.
The following are some of the specific issues which would contribute to improving the situation for workers.
- Under the current system, part time workers can only qualify for jobseekers’ payments (Jobseekers Benefit and Jobseekers Allowance) if their hours are worked within three days or less in a week. Many low-paid part-time workers, even if working only a small number of hours, have these hours spread over more than three days thus making them ineligible for social welfare support. The criteria for access to jobseekers’ payments should therefore be changed from one based on days to one based on hours.
- The Social Welfare Act 2011 reduced the length of the social welfare week from 6 to 5 days for those in receipt of Jobseekers Benefit. This change was presented as a measure to encourage people to take up work by making it a more attractive alternative. However, in the experience of EAPN Ireland members it is having the opposite impact and acting as a barrier to employment due to the reduction in the ability of part time workers to earn an adequate income by combining income work and social welfare supports. The social welfare week for Jobseekers’ Benefit should be changed back to a six day week. This change has been further compounded by the change in the social welfare week from a 6 day one to a 7 day one when unemployed people take up work.
- The Family Income Supplement (FIS) plays an important role in supplementing the income of low paid workers protecting them from the worst impact of low income from work. However, despite information campaigns on FIS, many people who are eligible do not access it. The application process for FIS also involves the employer, which can act as a barrier to application even for those who are aware of it. The Family Income Supplement needs to be reformed so that those who qualify for it automatically receive it.
Joint labour Committees
Following the coming into force of the the Industrial Relations (Amendment) Act 2012 which reforms the Joint Labour Committees and Registered Employment Agreements (REAs) wage-setting mechanisms, the Labour Court is still in the process of putting in place the infrastructure for the new Joint Labour Committees. This process needs to be sped up and is essential that the JLCs are set at a level which provides workers with a fair wage for their work.
Conclusion
The Low-Pay Commission needs to focus both on ensuring an adequate Minimum Wage alongside legislative measures to address issues related to precarious work which mean that even with a higher hourly rate of pay employees will still not be able to have a decent income for them and their families. While income from work should be able to provide for a decent income many workers are dependent on social welfare supports to provide them and their families with a more decent income. Current inadequacies and blocks in the social welfare system need to be addressed if people are not to be left in poverty.
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European Anti-Poverty Network (EAPN) Ireland
Established in 1990, the European Anti-Poverty Network (EAPN) Ireland is the Irish national network of the European Anti-Poverty Network (EAPN Europe).
EAPN Ireland supports a network of over two hundred local, regional and national organisations and individuals working against poverty to understand and influence policy making through training, information dissemination, collective action and networking.
For information, please contact Paul Ginnell,
EAPN Ireland: Equity House, 16 Upper Ormond Quay, Dublin 7. Tel:01-8745737
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[1]
[2]
[3] Mandate Trade Union (2012), Decent Work? The Impact of the Recession on Low Paid Workers,