Labour accuses government of 'shameful posturing' over plans to slow minimum wage increases

THE LABOUR PARTY has blasted moves by the government to begin stalling on increases in the minimum wage due to fears it will fuel inflation.

It follows reporting by RTÉ that while the government will accept the recommendation to increase the minimum wage by 79c an hour to €14.94 from January, it may avoid plans to have a living wage of €16 in place by 2029.

The minimum wage rate is currently €14.15 per hour for workers aged 20 and over.

Labour TD Ged Nash accused the government of “shameful posturing” on the National Minimum Wage, calling the government’s claims around this upcoming budget being for workers to be “empty” sloganeering.

Nash outlined that the Low Pay Commission is a statutory body made up of experts and industry and worker representatives with the mission to take an “evidence-based approach” to the making of the national minimum wage and to review it on an annual basis.

“If this small increase is prevented from going ahead, it will represent a line in the sand and a very hostile act against all working people in Ireland, proving once again that this government’s commitment to making work pay is nothing but empty and vacuous sloganeering,” the Louth TD said.

Speaking about the move on RTÉ One’s The Week in Politics, Fine Gael TD Emer Higgins stood over considerations to halt a minimum wage rise, arguing that it could have a knock-on impact on consumers.

“We need to be careful to ensure that we’re protecting jobs, that we’re not driving inflation by increasing the price of a cup of coffee by increasing national minimum wage,” Higgins said.

However, Nash, who was behind the formation of the Low Pay Commission in 2015, claimed on Sunday that a minister is required to come before the Dáil and Seanad to explain why a minimum wage increase is not going ahead.

The current minister for enterprise, tourism and employment is Fine Gael’s Peter Burke.

“The legislation I developed and that was passed in 2015 is clear,” Nash said.

“If a minister decides they will not accept the recommendation of the Commission on the rate of the National Minimum Wage, or if they decide to sign an Order making a rate different to that recommended by the LPC, they are required by the law to lay a statement before both Houses of the Oireachtas to explain why.

“This isn’t a position any Minister should want to find themselves in.”

ESRI report on inflation

A recent Economic and Social Research Institute (ESRI) report found most of the recent increases in Ireland’s minimum wage had no impact on inflation.

The only increase that impacted prices according to the report was the January 2024 increase from €11.30 to €12.70 per hour, which is the largest ever jump in the minimum wage in Ireland.

This was associated with a 2.5% increase in prices across several categories including hairdressing, takeaway coffee, takeaway meals and restaurant meals.

However, these categories account for just 11% of total consumer spending and the ESRI found that small to moderate minimum wage increases have a negligible impact on prices overall.