The introduction of the minimum wage in an already-tight labour market has had little impact on employment or workers’ pay, according to a new survey published today.
The ESRI survey of employers commissioned by the Department of Enterprise, Trade and Employment found that few employers would employ more people if the minimum wage had not been introduced.
About five per cent of employees received pay increases as a direct result of the minimum wage. About 13 per cent of firms said that they had to increase pay for employees above the minimum wage to restore differentials.
The percentage of workers earning around or below the minimum wage fell sharply between 1999 and 2001 according to the survey. The survey said that five per cent of workers now earn the minimum wage compared to 20 per cent in 1999.
However, most of these firms said that, in the light of the tightness of the labour market and the difficulty of recruiting and keeping staff, they would have had to increase wage rates anyway during this period.
As seen in other countries and in previous surveys for Ireland, younger workers and women were most likely to be at those wage levels, and low pay was most prevalent in sectors such as textiles, retailing, hotels, restaurants and bars, and personal services. The main concentrations of workers paid sub-minimum rates (which is permitted for young or trainee workers) were in sales and personal services.
The national minimum wage was introduced in Ireland in April 2000. The ESRI study re-interviewed firms which had been surveyed before the introduction of the minimum wage. The results are used to assess the impact of the minimum wage on employment, wage levels and other aspects of work organisation among Irish firms.