Minimum wage employees face challenges beyond money

Minimum wage employees tend to work longer, more unsociable hours in jobs that are also more precarious than those that pay more, according to a study by the Economic and Social Research Institute (ESRI).

The study, funded by the Government-appointed Low Pay Commission, examined the quality of minimum wage jobs in the Republic across a range of different measures. The report was published in advance of a decision on a recommendation by the commission to increase the minimum wage by 12 per cent next year, which would be more than twice the predicted rate of inflation for 2023.

Dr Paul Redmond, an author of the report, said the findings show that minimum wage employees face further challenges beyond the obvious financial ones.

“When thinking about the labour market we often talk about the number of jobs available,” he said. “However, as well as the quantity of jobs, an important consideration is the quality of jobs. Our research has shown that minimum wage workers, in addition to being on low pay, also face lower job quality as measured by a range of job characteristics.

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“Low job quality may have negative impacts on a person’s wellbeing. Therefore the combination of low pay and other potentially unfavourable job quality measures is of particular concern for individuals who are long-term minimum wage employees.”

The report found that minimum wage employees work longer shifts (more than 10 hours) that coincide with more unsocial times (Saturdays and Sundays). Yet they are five percentage points more likely than higher paid employees to want more hours.

The report also found they are 10 percentage points more likely than higher paid employees to fear job loss and to hold temporary employment contracts. And in terms of employee protection, they are about 20 percentage points less likely to be members of a trade union.

Minimum wage employees also appear to have less flexibility in their jobs, with the report noting they are 20 percentage points less likely to be able to work from home.

Those on minimum wage reported lower job complexity and lower levels of computer usage, as well as less training. On that basis, the ESRI said they are 13 percentage points more likely to work in jobs in which their skills are underutilised.

While most job quality indicators showed that minimum wage jobs tend to be lower quality, there were three exceptions.

Minimum wage employees are more likely to be in jobs where they have a choice in the colleagues they work with and in the hours that they work. In addition, minimum wage employees are more likely to be in jobs where people work together well.

The Low Pay Commission’s recommendation, which is for an increase of €1.40 an hour on the current rate of €11.30, taking it to €12.70, would mean someone on the minimum wage who works a 39 hour week would earn an additional €54.60 per week from next year.

Business groups have cautioned against the move, and the recommendation will have to be approved by Cabinet in the autumn. However, it is expected to receive Government support.