The 2024 minimum wage jump did push up prices — but only on the coffee and the chipper

What the minimum wage rise did to prices

A new study from the Economic and Social Research Institute (ESRI) has put a number on that claim, and it is a modest one.

The research, funded by the Low Pay Commission, examined whether minimum wage increases feed into the prices consumers actually pay, especially in industries employing large numbers of low-paid workers. 

For seven of the eight increases looked at since 2016, it found no detectable impact on prices at all.

The exception was January 2024, when the rate rose by 12.4% from €11.30 to €12.70 an hour.

It was the largest single increase in the history of the State.

That one was associated with a 2.5% rise in prices across the affected categories: hairdressing, takeaway coffee, takeaway meals and restaurant meals, RTÉ reported.

Set against everything else that has happened to Irish prices this decade, the ESRI reckons that equates to a small beer.

VAT changes in 2019 and 2023, and the Covid-19 pandemic in 2020, were also associated with price increases three to four times larger.

"The 2024 increase, the largest to date, was associated with modest price increases across a small number of goods and services," said Dr Paul Redmond, co-author of the ESRI report.

"By comparison, VAT adjustments and the Covid-19 pandemic had a far greater impact on prices."

The ESRI is better known here for the same institute's work on child poverty in Ireland, as Low Pay Commission chair Ultan Courtney welcomed the research.

The timing is not accidental. With the Budget 2027 negotiations under way, both sides of the wage-floor row now have a study to point at.