Pandemic unemployment payment higher than weekly wage of most minimum wage employees
Just under 600,000 people in Ireland received a payment of €350 this week.
The majority of minimum wage employees in Ireland are earning less money than what is distributed to recipients of the Covid-19 Pandemic Unemployment Payment, according to a new study by the ESRI.
The detail is included in an overview of minimum wage policy in Ireland over the last 20 years, which reviews the impact of changes to the minimum wage on the labour market in Ireland.
In the study, Dr. Paul Redmond, author of the report, notes that the lowest-paid workers in Ireland have been most impacted by the impact of Covid-19 due to widespread disruption in the retail, accommodation and food sectors, which employ half of all minimum wage workers.
As minimum wage workers, on average, work relatively few hours, the study notes, the weekly Covid-19 Pandemic Unemployment Payment of €350 per week is higher than the gross weekly wage of minimum wage employees on €10.10 per hour, the minimum wage in Ireland since 1 February.
As of Tuesday (5 May), 598,000 people received the Pandemic Unemployment Payment, including approximately 11,000 first-time recipients.
Approximately 8% of workers in Ireland earn the minimum wage; compared to all employees, minimum wage employees are more likely to be women, work part-time and aged 15-24.
Minimum wage increases in Ireland, the study found, have not led to job losses among minimum wage workers, but have resulted in some reductions in hours worked.
The 2016 increase in the minimum wage led to reductions in wage inequality in Ireland and the minimum wage has been shown to be particularly important in keeping wage inequality low during a recession.
Commenting on the findings of the report, Dr. Paul Redmond said that, in light of the Covid-19 pandemic, the Low Pay Commission and policy makers will have some important decisions to make about the minimum wage in the next 12 months.
“The key policy question over the next 12 months will be whether the minimum wage should be increased, decreased or remain the same,” Reynolds said.
“The evidence shows that minimum wage changes have little effect on employment. We also know that changes to the minimum wage impact wage inequality.
“These are issues that will need to be considered by the Low Pay Commission and policy makers in the coming months.”
The study on minimum wage policy in Ireland can be read in full here.