Bríd Smith (Dublin South Central, People Before Profit Alliance)
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6. To ask the Minister for Enterprise, Trade and Employment if he is planning to abolish sub-minimum wage rates in light of recent recommendations by the Low Pay Commission and the ESRI report; and if he will make a statement on the matter. [30466/24]

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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As the Minister and Ministers of State know, People Before Profit tabled a Bill seeking to get rid of the sub-minimum wage which proceeded to Committee Stage. It is absolutely disgraceful discrimination against young workers to pay them less than the minimum wage, which is miserable in and of itself at €12.70. That is far below what a living wage should be. The ESRI, among others, has recommended the sub-minimum wage rates should go. Will that happen? Is the Government going to progress this or will it dance to the tune of employers who want to keep people on low rates of pay?

Emer Higgins (Dublin Mid West, Fine Gael)
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As the Deputy will be aware, the Low Pay Commission was asked in 2022 to examine the issues around retaining or removing the sub-minimum youth rates of the national minimum wage and to make recommendations on the matter. The Low Pay Commission asked the ESRI to conduct background research on the issue under the terms of the Low Pay Commission and ESRI partnership agreement. This ESRI report on sub-minimum wages in Ireland was published in November 2023. The ESRI study examines the incidence and the characteristics of young employees who are paid below the full national minimum wage rate. The Low Pay Commission has conducted an in-depth review of the sub-minimum youth rates and, informed by stakeholder consultation and the ESRI report, developed its recommendations on these rates. I published the Low Pay Commission’s report on sub-minimum youth rates of the national minimum wage just last month.

As the Deputy is aware, the Low Pay Commission has recommended the removal of all sub-minimum youth rates of the national minimum wage. What is really interesting is the commission highlighted in its report that this is a complex issue. It has said the Government will need to give its findings and recommendations detailed consideration and deliberation, and it highlighted the need for the Government to take its own legal advice on the matter. That is what we are now going to do. I have also committed to commissioning an economic impact assessment of the recommendations. The terms of reference for that are being considered. The economic impact assessment will model the impact of making changes to youth rates on firms of different sizes and in different sectors. It will also consider the likely changes to the national minimum wage given the Government’s decision to progress to a living wage set at 60% of the median wage.

This is quite a complex and nuanced issue. For example, the sub-minimum rates varies considerably across different age groups. Some 45% of 15- and 16-year-olds are in receipt of sub-minimum rates, but fewer than 5% of 19-year-olds are paid these rates. In addition, the use of sub-minimum youth rates is largely concentrated in the accommodation, food and retail sectors and these are sectors we know are under pressure.

To answer the Deputy's direct question, we will make a decision on this important issue when the results of the economic impact assessment and the legal advice are available to us.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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It is complicated if the Government wants to make it complicated, but it is simple if one opposes discrimination against young people. It is simply wrong that young people should be exploited because they are young, and paid less for doing the same job as somebody else who happens to be older. It is a simple principle and that discrimination should be removed. The real issue, which the Minister of State alluded to at the end of her remarks, is the pleading of some in certain areas of retail and hospitality who disproportionately depend on very low-paid young people on these sub-minimum wage rates. There are other ways to help them and that is what the Government should be looking at. There should be no faffing around on getting rid of the sub-minimum wage rates, which are extremely low.

Let us add to that the fact that the actual minimum wage is very low, and the Government and everybody else know it should go higher. It is unacceptable that young people should be on these rates.

Emer Higgins (Dublin Mid West, Fine Gael)
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The Deputy alluded in his opening remarks to the fact that he has a Private Members' Bill on this issue. I draw the Deputy's attention to the line in the Low Pay Commission recommendation that states that sub-minimum rates should not be abolished before 1 January 2025. The reason for that is that the Low Pay Commission asked the Government to consider the report and its recommendations to ensure all decisions are evidence-based and to get legal advice on this. They are the recommendations of the Low Pay Commission on this and that is what the Government is doing.

We are looking at all of its recommendations, including abolition of it, but we are also looking at the recommendations that tell us get legal advice and study this in depth. That is why we commissioned an economic impact assessment. It is important to note that only approximately one quarter of those aged under 19 who could legally be paid the sub-minimum youth rates actually are being paid those rates. Therefore, 75% of people under the age of 19 are on the national minimum wage or above, and 80% of those who are not on it are students. As the Deputy said, many of those people do work in industries that are vulnerable. However, one thing I do not want to do is inadvertently create a situation whereby the people working in those industries have their hours reduced.

Catherine Connolly (Galway West, Independent)
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I thank the Minister of State.

Emer Higgins (Dublin Mid West, Fine Gael)
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There is international evidence that this has happened in other countries when decisions like this were taken-----

Catherine Connolly (Galway West, Independent)
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We are over time.

Emer Higgins (Dublin Mid West, Fine Gael)
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-----and that is part of the rationale for further investigation on this.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Workers who are not on the sub-minimum rates - older workers - lose out because employers depend on people who they are paying the lower rates. It is actually the older workers who lose out in some of those industries in terms of what they are paid because of disproportionate dependence on people who are on sub-minimum rates.

I take the point that in many cases there is a very low proportion of people under those ages who are on the sub-minimum rates, but they are heavily concentrated in certain sectors. I do not believe that support in those sectors, which may well deserve support, should be dependent on the exploitation of young people, and that is what is happening. It is exploitation. I do not know why the Minister of State is shaking her head.

Emer Higgins (Dublin Mid West, Fine Gael)
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It is not.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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For somebody who is 18 or 19 to be doing the same job somebody who is 20, 21 or 22, working beside each other, is wrong. It is discrimination and it is exploitation.

Emer Higgins (Dublin Mid West, Fine Gael)
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It is-----

Catherine Connolly (Galway West, Independent)
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Before the Minister of State comes back in, I call Deputy O'Reilly.

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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The Minister of State said this is complicated, but it is not. It is very simple. It is equal pay for work of equal value. Yesterday, representatives from Mandate Trade Union appeared before the committee and I asked whether its members who are paid 70%, 80% or 90% of the rate are, in fact, doing 70%, 80% or 90% of the work. The fact is that they are not; they are doing 100% of the work. I caution the Minister of State against the use of language like she is trying to protect people from having their hours cut. I remind her that was the language that was used by people at the time when women were campaigning for equal pay in advance of equal pay legislation coming via the European Union. At the time, it was said that the people who did not want equal pay for work of equal value were, in fact, the ones who were protecting women from having their hours cut. I do not like to hear that said in this House. We should not use that language. The Minister of State should be honest with people; she is not protecting them from having their hours cut, and I do not believe that is her intention either.

Emer Higgins (Dublin Mid West, Fine Gael)
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To be clear, my intention is to look at the Low Pay Commission recommendations and do exactly what it said in terms of analysing them and looking at consequences, including unintended consequences. As I said, I do not want a situation whereby we have an unintended consequence of a change to people's working hours.

Deputy Boyd Barrett has alleged that some industries are disproportionately dependent on student workers. I do not believe this is the case. If he can show me evidence to the contrary, he should please do so. Student workers may work full-time during their summer breaks, but most of the year they work part-time. Only one quarter of those under the age of 19 who can legally be paid the sub-minimum rates, and I will just clarify that it is legal here in Ireland, are actually paid those rates. That means that 75% of those who are legally able to be paid that rate are not paid it. Rather, they are paid the national minimum wage or above.

Catherine Connolly (Galway West, Independent)
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I thank the Minister of State.

Emer Higgins (Dublin Mid West, Fine Gael)
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That is industry doing the right thing by these people. What we have is a situation where under-18s cannot necessarily work the same hours legally as those aged over 18 and cannot always do the same duty.

Catherine Connolly (Galway West, Independent)
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I thank the Minister of State. We are way over time.

Emer Higgins (Dublin Mid West, Fine Gael)
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We need to take that into account as well. That is why we are doing the economic impact assessment and looking at this further.