National Minimum Wage


The trade union movement, together with community and voluntary organisations, has secured a very important breakthrough with the proposed establishment of a National Minimum Wage. While the rate recommended by the Commission ("around two thirds of median (average) earnings" which "in today's terms (April '98) would represent £4.40 per hour") was considerably short of the ICTU target of £5.00 per hour, it was generally agreed that the recognition of the principle of a National Minimum Wage was to be welcomed.

However, the National Minimum Wage is not targeted for implementation until April 2000, keeping the very low-paid waiting for two years amid the wealth of the Celtic Tiger if the government sticks to the Commission's timetable. Also, if the minimum rate was to be set at £4.40 per hour in April 2000 inflation would have reduced it to a real rate of £4.14 in today's values (and a rate below the recommended two thirds of the average).

Furthermore, the Commission has surrounded the National Minimum Wage with many conditions and loopholes. It recommends a "sub-minimum" rate for under-18s, and for job entrants without experience, regardless of age, for up to three years. In addition the employers are maintaining a heavy lobby against the implementation of even the Commission's recommendations.

The Irish Congress of Trade Unions has impressed upon its affiliated organisations the need for follow-up on the Commission's report. The Dublin Council of Trade Unions is continuing its campaign around the National Minimum Wage to urge: no watering-down of the recommended rate per hour; immediate implementation of the National Minimum Wage; a minimum rate without strings attached.

The Dublin Council of Trade Unions will kick off its programme of activities on the minimum wage with a 'festive parade' through the pedestrianised area of the city centre on Thursday, 9 July, from the Ambassador Cinema, Parnell Street, at 6 p.m.

The ICTU also has a campaign going on the national minimum wage, though you'd be forgiven for not noticing it. It consists mainly of encouraging affiliated organisations to make representations to individual public representatives (TDs, Councillors, etc.) Congress's is for "the implementation of the Commissions recommendations at an early date" (circular, 22 May).

Congress also says, in its circular to unions, trades councils and unemployed centres, that "it is essential to maintain political and public support" for the national minimum wage "to counteract the extensive lobbying campaign against it by employers". So unions and other bodies should get behind this and energise it beyond "seeing your TD".

Congress, while urging an early date, appears to take £4.40 as the rate, even up to April 2000. Indeed, it has been universally reported that the Commission recommends £4.40 per hour in April 2000 and no-one at any level has contradicted that. So it seems safe to interpret the Report as meaning that.

Yet the Report states: "The initial rate for the national minimum wage should be set at around two-thirds of median (average) earnings" and "a target date of 1st April 2000 should be set to implement" the National Minimum Wage.

This would imply that the April 2000 rate should be set at two-thirds of median earnings then. The £4.40 is introduced only in the following sentence: "In today's terms, two thirds of median earnings would represent £4.40 per hour". (Our emphasis) Isn't the £4.40 an illustration in the Report?

Unfortunately other provisions of the Report have been more strictly interpreted, and unfortunately, by Congress - word for word, penny for penny. In a truly shocking move, Congress requested its Network of Unemployed Centres in May to ensure that the minimum rates of the Report - still an advisory document without direct union participation - including the 'sub-minimum' rates are observed in relation to jobs advertised in the Centres!

Congress even provided a table of the Report's sub-minimum rates, codifying the more circumspect language of the Report and allowing ICTU Unemployed Centres to advertise jobs at £3.20 per hour that would reach minimum wage only after three years. Who makes these decisions?

As an officer of the Scheme Workers Alliance pointed out to us, if the above training rate were to apply to a National Minimum Wage introduced in April 2000, the minimum wage would not come in for those who most need it (young and unskilled) for five years!

More gems from the Commission report: the rate should take "overall economic conditions" and "competitiveness" into account (p.79); the introduction date is explicitly related to the end of P2000, allowing bartering and dependence on a fifth Programme; EMU fluctuations can be a factor too.

Some employers have taken comfort from the British £3.60 rate (all employers north of the border), pointing out that the punt equivalent is £4.14. Funnily enough, if the National Minimum Wage is postponed to April 2000 and inflation stays as it is, the £4.40 then will be worth just about £4.14 in today's values. In the meantime, the British rate will apparently have increased by a promised 20p per hour. In sterling.

Des Derwin

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