Business group leader warns of ‘possible distortions’ in figures used to calculate living wage

Vincent Jennings, CEO of the CSNA

Report authors at Maynooth University did "not address the effect that the presence of 230,000 employees of multinational corporations has on the national median earnings,” says CSNA's Vincent Jennings

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24 August 2022 | 0

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“Possible distortions” occur in the data that will be used to calculate the new living wage, Vincent Jennings, CEO of the Convenience Stores and Newsagents Association – and former member of the Low Pay Commission – has cautioned.

Beginning next year, Tánaiste and Enterprise Minister Leo Varadkar plans to replace the national minimum wage of €10.50 an hour with the new living wage, over a period of four years. He has proposed that the living wage should equal 60% of median earnings.

However, the Irish Independent reports that Jennings wrote to Minister of State Damien English, claiming that Maynooth University academics did not follow all terms of reference when carrying out a study on the living wage.

Jennings claims they did not address the effect that the pay of multinational employees has on national median earnings. He subsequently urged the minister “to do something, ask questions, find out why a term of reference was ignored”.

Jennings said he was “most uncomfortable” that the report had “not addressed the effect that the presence of 230,000 employees of multinational corporations has on the national median earnings”.

A spokesperson for the Department of Enterprise, Trade and Employment said the report’s authors found that the calculation of a median wage is not influenced by a relatively small number of very high values in high-paying MNCs, and they therefore decided not to include this issue.

Separately, Minister Varadkar said the Low Pay Commission has recommended a “substantial increase” in the minimum wage, which would place it between €12.50 and €13, to be introduced within the next four years. However, he said introducing the living wage too quickly could be “counterproductive”.

“We’re concerned if we do that too quickly and increase cost on business, and particularly small businesses, it might actually cause them to have to reduce people’s hours or leave people off,” Minister Varadkar told Fine Gael members.

 

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