THE REFERENCE HOURLY living wage has risen to €14.80, following a review by  a research group tasked with adjusting the recommended pay to the cost of living.

This represents a 6.9% (€0.95) increase from the 2022/23 rate of €13.85 per hour. 

The living wage is described as the minimum amount required for a full-time worker (without dependents) to afford the goods and services that people have agreed are essential for enabling a life with dignity. There is no statutory requirement for employers to pay the living wage.

The rate is calculated by the Living Wage Technical Group (LWTG) and is based on research undertaken by the Vincentian MESL Research Centre at St Vincent de Paul. It is determined by changes in living costs and income taxes.

A report published by the group states that over the past year living costs have increased for most areas of expenditure included in the calculation. Within this, rising energy costs (+23%) and food costs (+21%) added €23 to the price of the average weekly basket.

“This significant pressure fuelled two-thirds of the required increase in the living wage rate,” it said.

Other areas of weekly expenditure which grew include Personal Care (+9.2%), Social Inclusion (+6.3%), and Clothing (+5.9%). While Transport related costs decreased slightly (-2.0%).

It is believed that the State’s new Rent Tax Credit has stunted the impact of rising rents, but the average cost of rent has still increased by 7%, or almost €13 per week.  Without the Rent Tax Credit the hourly rate would have risen by a further €0.35 to €15.15. 

The group said that while the rate of inflation has reduced over recent months, costs remain “exceptionally high”.

Due a raise?

The new living wage rate will change again come next year to account for changes in the Budget.

It is estimated that approximately one-in-five full-time workers are earning less than the living wage in Ireland.

It differs from the government’s estimation of a living wage, which in 2024 is estimated to be €13.80 per hour.

Lidl Ireland, which has paid its employees the living wage for eight years, has committed to meeting the new rate. 

Maeve McCleane, Chief People Officer at Lidl Ireland & Northern Ireland, said: “Our most important asset is our people and now more than ever before, it is vitally important that we continue to support our employees to overcome the challenges of the cost-of-living crisis as best we can.

“In the current climate the most important thing for us as an employer is that we are playing our part in providing secure and well-paid jobs, that reward employees and provide financial security in a world of ever-increasing financial strain.”

The increase will cost the supermarket chain around €3 million, and will benefit more than 2,000 employees, who will receive their second pay rise in less than 12 months.