This is an unequal society and, in an attempt to address one of its most glaring inequities, the Government introduced the concept of a minimum wage some five years ago.
The development was opposed by employer organisations, with the Small Firms' Association being particularly trenchant in its criticisms. In spite of that, Ireland joined with the majority of OECD countries in establishing a basic level of pay. And, for the first time, those unscrupulous employers who exploited and underpaid vulnerable workers could be prosecuted.
At the moment, the Minister of State for Labour Affairs, Mr Tony Killeen, is considering a recommendation from the Labour Court that minimum pay levels should be increased by 9 per cent, to €7.65 an hour, later this year. The proposal has satisfied neither the Irish Congress of Trade Unions nor the employer bodies, which regard it as either insufficient or excessive. But, in the context of a Government pay bill which moderated from 18 per cent in 2001 to an estimated 8 per cent this year, it is not extravagant.
The minimum wage was set at €5.59 an hour in 2000 and, in the course of five years, increased to €7.00. During that time, the cost of living - particularly of accommodation - rose sharply, while the Government failed to index tax bands in two successive budgets and facilitated a range of stealth taxes. Today, a 40-hour week will secure workers on the minimum wage the princely sum of €280 and edge them back into the tax net. And one-third of the entire workforce is directly affected.
The Small Firms' Association has suggested that tax concessions made in the Budget should be taken into account when establishing a minimum wage. That is not a tenable position. Employer organisations are on firmer ground when they argue that, in order to maintain competitiveness and keep down costs, pay increases should reflect the level of inflation. But the Government also has a responsibility to protect basic living standards. And, at a time when the economy is growing strongly, with large numbers of migrant workers filling vacancies in the services sector, they must be treated equitably.
The general secretary of the ICTU, Mr David Begg, sought a 25 per cent pay increase on the grounds that it should reflect the original commission recommendation that a minimum wage should amount to two-thirds of median earnings. That did not happen five years ago. And it is even less likely today.
In the circumstances, however, the proposal by the Labour Court for a 9 per cent increase would appear to be reasonable.