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Economy Watch: view from Dublin

By Brendan Keenan

Published 01/09/2015

Backing: Labour’s Ged Nash
Backing: Labour’s Ged Nash

A rose by any other name may smell as sweet, but calling a nettle a rose does not make it so. There can be a lot to a name.

A new name is entering the economic/political lexicon with remarkable speed - the living wage. At the end of next month, there will be one of those grand forums in Dublin Castle without which, nowadays, no serious policy can be launched.

At this one, the usual suspects will discuss "how a living wage can be introduced into more workplaces in Ireland". One cannot help but notice the absence of words like "whether" or "should" in that description of the forum's purpose.

Perhaps that is to be expected. The junior minister in charge, Labour's Ged Nash, has already made clear that he is all for state bodies and agencies paying living wages. But then, who could be against it?

That is the significance of the name. It does not look good for a company to refuse to pay its workers a "living wage." Siptu hopes payment will become the target for "progressive employers". We can see what says about the others.

It would look even worse for a public body not to be equally progressive. Fortunately, even before the forum's deliberations, the evidence has convinced minister Nash that such payments will reduce absenteeism, increase productivity and help staff retention.

This seems a sweet-smelling blossom indeed. Fast-growing too. In Ireland, it has risen without trace from obscurity to a pre-ordained forum in the castle, but the concept has been around for some time.

In Britain, companies can voluntarily agree to pay the living wage, and some 1,500 have done so, although many are in highly-paid sectors where it makes little difference.

Just in case there is any doubt, the living wage is not the same as the minimum wage. The two things are utterly different. At least for now.

The minimum wage - soon to be £6.70 - is the lowest amount per hour which an employer must, by law, pay their workers.

The living wage is, well, that is quite a complicated matter. The idea looks simple, but the details are fiendishly complicated. The concept is that work should pay enough to allow individual employees, with no dependants, to afford a socially acceptable minimum standard of living.

There are more questions begged in that statement than one could shake a stick at. That became clear when it came to calculating such a wage. Focus groups helped decide what the public thinks is the essential minimum standard, but there is no single answer, since it depends on family situation, where somebody lives and their potential working hours.

Belfast Telegraph

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