Further details on the Living Wage and on the methodology used to calculate the hourly Living Wage rate can be found on www.livingwage.ie
The 2018 Living Wage rate is €11.90 per hour. The Living Wage is set by the Living Wage Technical Group based on research identifying the Minimum Essential Standard of Living (MESL) in Ireland, conducted by the VPSJ.
The hourly Living Wage rate is the average gross salary required by full-time employed adult (without dependents) to afford a socially acceptable minimum standard of living across Ireland.
Through its budget standards research the VPSJ recognises the inadequacy of the National Minimum Wage for many household types. Earnings below the Living Wage do not allow for a Minimum Essential Standard of Living, and means individuals are faced with having to do without essentials in order to make ends meet.
The ongoing and unsustainable increase in rents has again pushed up living costs, in the last year. The 20c increase in the hourly Living Wage has been mainly driven by the current housing crisis and the associated increases in rent levels.
Aside from housing, the overall cost of the minimum essential needs of a full-time single worker fell in the last year. The cost of food, clothing, health insurance and transport all fell in 2018. While home energy costs increased notably (5.2%), this was not enough to offset the reduction in costs for other areas of need. Additionally, changes to the Universal Social Charge (USC) increased net pay for a person earning the Living Wage, when compared to 2017.
These savings are wiped out by rising rents. The overall cost of a socially acceptable minimum standard of living increased by an average of 2.5% for a single full-time worker without dependents, over the past year.
In Dublin, rent now accounts for effectively half (49.6%) of a single person’s minimum living costs, and increased by over €21 per week since 2017. Rents have continued to increase outside of Dublin also, in the last year housing costs for a Living Wage worker increased by an average of 10.9% across Ireland.
If housing costs had not increased to such a degree the Living Wage rate would not have increased in 2018.
To date, the full impact of rising rents has been counter balanced, somewhat, by falling costs in other areas of essential expenditure, for example food and transport. It is unlikely that such price reductions will continue to act as a break on increases in the Living Wage needed in coming years. Consequently, increases in the cost of a minimum standard of living, driven by rising rents, could necessitate further increases in the Living Wage in order to keep pace.
The Living Wage
The Living Wage is based on the concept that work should provide an adequate income to enable individuals to afford a socially acceptable minimum standard of living.
The Living Wage is the average gross salary which will enable full-time employed adults (without dependents) across Ireland to afford a socially acceptable minimum standard of living.
Unlike the National Minimum Wage, the Living Wage is an evidence based rate of pay which is grounded in social consensus. It is derived from Consensual Budget Standards research, which establishes the cost of a Minimum Essential Standard of Living in Ireland today.
|National Minimum Wage||Living Wage|