'An important step' - Irish workers to benefit from new national living wage

The Tánaiste has confirmed the introduction of a national living wage for employees. 

Leo Varadkar, who is also the Minister for Enterprise, Trade and Employment, today (November 16) outlined details of the wage, which will be introduced over a four-year period with a view to replacing the national minimum wage by 2026. 

The change includes an 80% increase to the national minimum wage from 1 January 2023 to €11.30 per hour, followed by gradual increases until it reaches 60% of hourly median earnings. 

In 2023, it is estimated that 60% of median earnings would equate to approximately €13.10 per hour. 

Speaking about the news, the Tánaiste said, "Improving terms and conditions for workers must be one of the legacies of the pandemic. Across the country thousands of minimum wage workers, regardless of what job, sector or location they work in, will benefit from this increase. In addition, many more employees will feel the benefits of knock-on increases resulting from the changes.

"The introduction of a living wage is an important step we are taking towards eradicating low-wage employment for all workers and it will be implemented gradually over a four-year period. Once it is successfully in place, the Low Pay Commission will investigate if we can increase the living wage further to reach 66% of hourly median earnings.

Approximately 164,000 people earned the national minimum wage in 2021. These workers can now expect an increase in their pay and it is expected that more will benefit from knock-on increases. 

Research undertaken by Maynooth University on behalf of the Low Pay Commission has provided evidence that a wage floor set at 60% of hourly median wage can raise workers’ wages without adverse effects on hours worked and employment.

Varadkar continued: "Extensive research and consultation took place - including with employer and worker representative groups, unions and the public - in order to ensure we introduce the living wage in a way which will benefit workers whilst also being manageable for businesses. It’s important to get the balance right.” 

Once the national living wage has come into effect in 2026, subject to an assessment of the impact of the change, the Low Pay Commission will advise on the practicalities of gradually increasing the targeted threshold rate towards 66% of the hourly median wage.