A new ESRI study finds that workers on low hourly pay are often found in households with incomes close to the average. More than 11 out of 12 low-paid workers live in households above the most commonly used poverty line. Analysis using SWITCH, the ESRI tax benefit model, finds that recent increases in the National Minimum Wage have mainly benefited individuals living in households in the middle of the household income distribution.
In a majority of cases, low paid employees are not the sole earners in the household. Even when low-paid workers are the sole earners, fewer than 1 in 5 of them fall below the EU’s “at risk of poverty” threshold. These findings reflect patterns which are common across countries and persistent over time.
Commenting on the report, Professor Tim Callan said “Minimum wage policies have several goals, but should not be expected to have a major impact on household poverty. Workers with low hourly pay are often found in households with incomes at or even above the average.”
The ESRI works towards a national vision of ‘Informed policy for a better Ireland’. This means producing high-quality analysis to provide robust evidence for policymaking, with the goals of research excellence and policy impact.
The ESRI produces research that contributes to understanding economic and social change in the new international context and that informs public policymaking and civil society in Ireland.
View the ESRI's Terms, Conditions, Privacy and Refunds Policies