Workers ‘weren’t sacked’ after minimum wage hike

EMPLOYERS did not sack workers or cut their hours due to a 50-cent an-hour hike in the minimum wage, a study finds.

The report reveals that the substantial increase given two years ago had “little immediate negative impact” on the 124,000 people on the minimum wage.

Employer groups are often up in arms over the slightest upward shift in the minimum wage, claiming it will push up their costs and result in job losses. But a new report by the Economic and Social Research Institute (ESRI) concludes the increase in the rate to €9.15 an hour in 2016 did not affect employment.

The report shows minimum wage workers’ average hours did fall somewhat after the hike. They dropped by roughly one hour a week, while part-timers’ hours were reduced by three and a half hours a week.

However, Seamus McGuinness, research professor at the ESRI, who co-wrote the report, said this did not mean employers slashed workers’ hours. He said an influx of parttimers to the labour market, who were attracted by the higher minimum wage, dragged down the average hours worked.

Mr McGuinness said the analysis revealed there was no negative effect on employment due to the increase.

“There is little evidence that the 2016 increase in the national minimum wage rate had any immediate adverse impacts on low-paid Irish workers,” he said.

He said the portion of the workforce on the minimum wage almost doubled following the increase, from 5.5pc to 10pc.

The study looked at the impact of a 50-cent-an-hour increase that came into effect in January 2016 and was recommended by the Low Pay Commission. It was the second increase by a Fine Gael and Labour coalition that came into office in 2011.

The Government also reversed a €1 cut in the hourly rate that was brought in by the previous Fianna Fáil government, which had reduced the minimum wage to €7.65 an hour. The minimum wage has since increased twice to €9.55 an hour, with rises this year and last year.