Increasing costs of rent are hindering workers from benefiting from increases in wages due to the growth of economy and reaching full employment. The number of people who work are reaching record highs because of the booming economy. However, growth in wages cannot keep up with skyrocketing increases in homes.
The average cost of housing is increasing at a rate twice that of average earnings throughout the country. Rent has increased by 8% in 2018. The average wage increased by just over 3%.
According to the Center Statistics Office, the unemployment rate as of the second of July, 2019 is 4.5%. Although this is a relatively low percentage of unemployment other problems exist such as joblessness, skill shortages and low levels of employed women.
Modest official inflation figures are being questioned by various economists to determine if the figures are truly representative of what is actually occurring as increasing demands for greater pay is contributing to more pressure on workers.
In response to heightening housing prices, there have been many actions for the “living wage” to be heightened by an additional 40 cents. The living wage is defined as the average hourly salary of a single full time worker needs to afford a minimum basket of goods and services. The living wage has not been adopted by all employers. The new living wage in Dublin would amount to €12.30 this is because rent and housing costs make up more than half of minimum wage worker’s living costs in Dublin.
The current national living wage is €9.80. Rising the Dublin living wage to €12.30 would be €2.50 higher than the national minimum wage. According to the Living Wage Technical Group, if rents remained stable in 2019, there would be no need to raise minimum wage in Dublin, but rental costs have continued to increase.
Recent figures have revealed that housing costs are up to 14 times the average salary. Additionally, according to the the president of the Irish Congress of Trade Union, Sheila Nunan, prices of property have increased by 80% nationally since the lowest point of the recession. The president continued to state that homes in half of Ireland have been defined as unaffordable for first time buyers based on average incomes.
Nunan continued to discuss how people have lost confidence in the ability to buy a home of their own. The share of homes in the private rental sector has doubled in the last 20 years. The share of households in the private rental sector is set to double again in the near future.