Living wage will reach 60% of average earnings by 2026, says Varadkar

The Government is expected to approve increasing the national living wage to a minimum of 60 per cent of average earnings by 2026.

Tánaiste Leo Varadkar is expected to bring a memo to the weekly Cabinet meeting on Wednesday proposing year-on-year increases over the next four years.

It will mean that, if all increases occur, workers in Ireland by the end of 2026 will be guaranteed a wage of €510 per week, or €26,521 per year, based on the average wage of €850 per week, or €44,202 annually.

The change will give effect to the recommendation of the report of the Low Pay Commission.

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Speaking before the Cabinet meeting on Wednesday morning, Mr Varadkar, the Minister for Enterprise, said it would mean higher pay for low-paid workers.

“That’s good for them, obviously, because it helps pay the bills, make ends meet. It’s good for the economy in the round. It means more money available to the local economy being spent on local shops and services,” he said.

Mr Varadkar said that the Government would also bear in mind the impact such a change would have on business and would slow down the pace of increases if the economy was not performing strongly.

“The most important workers’ right is the right to work. I’m not going to do anything that causes people to lose their jobs or be laid off.

“So the mechanism is there to slow down the increase if the economy gets into trouble, but also to speed it up if the economy remains strong.”

He said that 2.55 million people were working in Ireland.

Mr Varadkar was expected to bring three other memos from his department to Cabinet on Wednesday. One was a proposal to update legislation for the co-operative movement in Ireland. There are 900 or so co-ops in existence, most based in rural Ireland.

Mr Varadkar said he was also seeking an update on the action plan for insurance reform. He said some progress had been achieved in terms of actual availability of insurance, but he accepted that, unfortunately, people were not yet seeing fall-offs in premiums, other than in the area of motor insurance.

He said a new €500 million loan scheme would become available for business – low-cost State-backed loans over a 10-year period. The loans would specifically allow the businesses to expand in a way that was environmentally sustainable, he said.