Ibec has claimed that the living wage is not an accurate way to assess cost of living pressure and is a structurally wrong concept to begin with.
The living wage puts a lot of pressure onto the business. Whether the business’s are able to pay is not accounted for in the living wage. This was following the Living Wage technical group, who sets the living wage figure, increased it by 20 cents to €11.70 in Ireland for 2017.
The reason for the increase? It was accounting for the current housing shortage and the increased rent levels.
This is different than the minimum wage set at €9.25 and set by Government’s low pay commission.
The living wage was created in 2014 updated every July. It is ideally the set average wage for full-time employees to cover the minimum cost of living.
It is set by the Living Wage technical group. They consist of researchers and academics and directed by Vincentian Partnership for Social Justice.
It is priced by many factors which include: health insurance cost, food cost, Universal Social Charge weekly minimum, housing costs. These all contributed to the overall increase in the living wage.
The current prices for Ireland: Dublin at €15.92, €12.57 in other cities, rural areas and towns between €6.14 and €6.64.
The problem with the business side is in order to pay their workers’ wages, they need to first set a price at which will attract customers. Then go off that price to set wages for their employees.
Ibec Director of Employer Relations, Maeve McElwee, put the blame on the government for the failed public policies over the year that resulted in the high costs of living. The living cost makes up most of the living wage. Pushing these high costs onto employers and expect them to pay is unfair practice.
Pricing the living wage higher can also be detrimental for young seeking employment. As the youth employment rate rises, it is not wise to increase living wage which might price the young seeking employment out of a job. Yet another reason to not take on a young employee for companies.
In reference to Ibec blasts Living Wage as ‘fundamentally flawed concept’ as it increases by 20c to €11.70 by Louise Kelly on 5 July 2017 in the Independent.ie.