Turlough O' Sullivan, Director General, IBEC and David Begg, General Secretary, ICTU.

The Irish Congress of Trade Unions told the Labour Court today that there was a “compelling case for a significant rise” in the National Minimum Wage.

At a Labour Court hearing on the issue, Congress argued that a significant rise was necessary in order to keep pace with wage growth and price rises since 2005, when the wage was last adjusted, and prevent the emergence of a ‘two-tier’ workforce.

According to Congress General Secretary David Begg, the number earning the Minimum Wage has increased by 40 percent, since its introduction in 2000. More than 100,000 employees are now on the Minimum Wage.

“This trend is likely to continue. Unless we see a significant rise in the Minimum Wage, this could lead to the emergence of a two-tier workforce, with very negative consequences for the economy and society. We also know that some seven percent of those in work are at risk of poverty.

“It is clear that the Minimum Wage can be utilised both to combat inequality, address the problem of low incomes and help close the Gender Pay Gap.

“We must also remember that this is the only, legally-enforceable wage rate covering the whole economy. Thus, it has a crucial role to play in the protection and enhancement of labour standards generally by setting a threshold of decency below which no employer can legally go.

“In the context of strong inward migration and the protection of all workers, there is a compelling case for a significant rise now.”

The current rate for the Minimum Wage is €7.65 per hour and it was last adjusted upwards in May 2005.

The Minimum Wage was to be set at 60 percent of median earnings, as recommended by the National Minimum Wage Commission, prior to its introduction in 2000.

“However,” said Begg, “the level has consistently fallen below 60 percent, falling as low as 47 percent, in 2003. It currently stands at just under 51 percent. We believe it is time to make serious and significant progress towards restoring that linkage.”

The Congress submission pointed out that all evidence indicated that the Minimum Wage increase in 2005 had not contributed to a growth in unemployment – if anything, the opposite was the case, while a rise would also have no impact on inflation or affect competitiveness.