At the launch of the first report of the Low Pay Commission

This is an important report and an important day in a wider battle.

The battle to ensure all workers share in the recovery this Government is building.

When I became Labour Party Leader and Tanaiste, I immediately put the establishment of the Low Pay Commission on the agenda.

It was central to my negotiations with the Taoiseach on the revised policy priorities of the Government.

My reasoning was simple.

I wanted an independent body to ensure the Minimum Wage was reviewed in an evidence-based way on an annual basis.

By so doing, I believed we could take the politics out of low pay, and ensure no more politically motivated attacks on low-paid workers.

Once the proposal was agreed, I appointed Ged Nash to drive the Commission’s establishment, and he has done an excellent job.

I want to thank the Commission chairman, Dr Donal de Buitléir, and the members for their hard work.

I acknowledge that some members feel the €9.15 recommendation is too conservative, and should be higher.

But a 50c increase in the minimum wage would mean an annual pay increase of circa €1,000 for a low-paid worker – a significant amount.

Any potential anomaly in the PRSI system arising from the Commission’s recommendations will be addressed at the appropriate time in the Budget.

Our goal will be to ensure that workers benefit from the increase, not the Exchequer.

In the same vein, we will continue to reform USC to reduce its effects on low-paid workers generally.

I also acknowledge that some businesses are only beginning to recover, and will not welcome any increase.

But the minimum wage has not risen beyond €8.65 in eight years.

In fact, the previous government cut it – something we immediately reversed upon taking office.

This is an evidence-based report and it is a fact that the business environment is significantly improving.

A correlated improvement in workers’ incomes is an essential element of the social contract.

It’s worth nothing in this context that other countries have successfully used an independent body to effectively set their minimum wage.

The minimum wage has increased progressively in the UK, for example, since 1997 with little detrimental effect on the functioning of the economy or labour market.

The Government recognises the need to balance a basic statutory minimum pay rate that is fair, with one that is sustainable and allows employers to continue to grow and create jobs.

Once the budgetary work is done, I look forward to the minimum wage increase taking effect early next year.

I firmly believe that increasing the minimum wage in this solid, evidenced-based way will be a win-win for everybody – employees, employers and the economy as a whole.

Research from both the IMF and the OECD has found that increase in the income share of the bottom 20% fuels higher economic growth.

By contrast, if the income share of the top 20% in a country increases, growth actually declines over the medium term.

Or to put it another way, quoting Henry Ford: “If an employer does not share prosperity with those who make him prosperous, then pretty soon there will be no prosperity to share.”

The minimum wage is a base rate, of course – an essential protection against exploitation, against poverty.

But it is not a guarantee of adequate wages for all workers, which is why I support the wider living wage initiative.

I see today and the Commission’s recommendation as the start of a process, not the end.

The Government knows this.

It’s also why, more generally, it’s crucial that we see a wage-led recovery.

I want to say unambiguously that I want to see wage increases this year and next in all sectors of the economy where employers can afford to pay more.

This has a vital role to play in raising living standards.

So too does the work Ged is driving to improve working conditions – such as restoring wage-setting mechanisms and providing for collective bargaining.

Thanks to the Irish people and the work of the Government, Ireland is now enjoying a strong recovery.

We are well placed to secure that recovery, build on it, and share the benefits.

But the benefits must accrue to all workers, and Labour will be essential to that process.

Just as we drove the establishment of the Low Pay Commission, we intend to drive a decade of strong growth, jobs, opportunity and raised living standards for all our people.