12% minimum wage increase recommended by Low Pay Commission

An increase of more than 12% to the minimum wage has been recommended by the Low Pay Commission.

The Low Pay Commission advises the Minister for Enterprise, Trade and Unemployment on what is the most “sustainable” but “fair” rate to set the minimum wage at.

Proposals will go before Government in the autumn, and would take the minimum wage to €12.70, up from the current rate of €11.30.

At present, Ireland ranks ahead of France, The Netherlands, and Spain in terms of minimum wage payments, and the proposed rate would take Ireland ahead of Germany, which currently pays minimum wage workers €12 an hour.

Among Eurozone members, Luxembourg pays the most to minimum wage workers, with employees earning €13.37 an hour.

The latest increase will have to be approved by Cabinet in the autumn but is expected to receive Government support as the cost of living crisis continues to persist and the news that the Irish economy has entered a technical recession.

The Irish Times reports that the recommendation is double the predicted inflation rate, and would help workers who earn a minimum wage keep up with rising energy costs and stubbornly high inflation rates.

The recommended increase is well above the 5.3% headline inflation rate predicted for 2023 by the Central Bank.

Under current legislation, workers aged 17, 18, and 19 currently receive 70, 80 and 90% of the full rate.

Should the recommendations be implemented, the rate for a 17-year-old would increase to €8.89 per hour, 18-year-olds getting €10.16 per hour and 19-year-olds receiving €11.43.