Wage setting tasc sept 11

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Wage setting tasc sept 11

  1. 1. Economic crisis and the restructuring of wage setting mechanisms for vulnerable workers in Ireland Thomas Turner and Michelle O’Sullivan TASC 29 th September 2011 [email_address]
  2. 2. Context <ul><li>Challenges to JLC system: </li></ul><ul><ul><li>from financial crisis & ‘Memorandum of Understanding’ negotiated with the EU/IMF </li></ul></ul><ul><ul><li>Legal challenge on JLC constitutionality from fast food employers </li></ul></ul><ul><li>Triggered by arguments that JLC regulations unduly add to the cost of labour </li></ul><ul><ul><li>“ Need to increase flexibility and facilitate re-adjustment in the labour market” </li></ul></ul><ul><li>Little evidence on extent of payments such as Sunday premiums, shift allowance and over-time payments to workers covered by JLCs. </li></ul>
  3. 3. Paper objectives <ul><li>To examine the structure of earnings & hours of low paid workers </li></ul><ul><ul><li>What groups more likely to earn JLC wages? </li></ul></ul><ul><ul><li>To what extent do low paid workers work overtime hours and shift work? </li></ul></ul><ul><ul><li>To what extent do low paid workers benefit from overtime earnings, shift allowances and bonuses? </li></ul></ul><ul><ul><li>How do low paid and higher paid workers compare regarding overtime, shift allowances and bonuses? </li></ul></ul>
  4. 4. Methodology <ul><li>2007 National Employment Survey (NES) in the private sector </li></ul><ul><li>Dependent measure is average hourly earnings </li></ul><ul><li>Approximately 75 per cent of respondents (44,861) in the private sector </li></ul><ul><li>Grossed up to the employed labour force of approximately 1.7 million employees. </li></ul>
  5. 5. Low pay <ul><li>Median hourly earnings €16.29 </li></ul><ul><li>Low pay work as two thirds of median hourly earnings - €10.86 or less </li></ul><ul><li>25% private sector workers (323,912) are low paid </li></ul><ul><li>JLC range - €8.23 to €9.68 </li></ul><ul><li>52% (168,092) of low pay workers fall within this JLC range </li></ul>
  6. 6. Low pay earnings 25% 323,912 100% 9.5% 123,154 38% € 9.69 – €10.86 13% 168,092 52% JLC: €8.23-€9.68 2.5% 32,666 10% Less than €8.23 % of low pay private sector N Low pay in Private sector
  7. 7. Who are JLC workers ? <ul><li>Female </li></ul><ul><li>Less educated </li></ul><ul><li>Part-time </li></ul><ul><li>Under 25 years of age </li></ul><ul><li>Non-Irish </li></ul><ul><li>Manual or routine service type work </li></ul><ul><li>Non-union </li></ul><ul><li>Low levels of employment service </li></ul><ul><li>Work in the hotels/restaurant and whole/retail sectors </li></ul>
  8. 8. Hours, over-time and shift allowances above and below JLC hourly earnings
  9. 9. Selected characteristics of workers covered by JLC rates by mean hours, over-time and shift allowances (N=168092: means reported for all measures)
  10. 10. Distribution of overtime hours, earnings and shift allowance
  11. 11. Shift work and shift allowances
  12. 12. Working time & earnings <ul><li>Workers who work no overtime and receive no shift allowance or bonuses are more likely to be covered by JLC rates and are twice as likely to work shifts. </li></ul><ul><li>Workers who receive no shift allowance are twice as likely to be in the JLC range although such workers are twice as likely to work shifts. </li></ul>
  13. 13. Working hours <ul><li>Workers in the JLC range </li></ul><ul><ul><li>Work fewer hours per week </li></ul></ul><ul><ul><li>fewer over-time hours </li></ul></ul><ul><ul><li>over-time hours amount to a smaller proportion of hours worked per week </li></ul></ul>
  14. 14. Conclusion <ul><li>Evidence does not support the argument that extra payments such as Sunday premiums, shift allowance and over-time payments to workers covered by JLCs represent a major cost to employers in general. </li></ul><ul><li>Conversely it might be argued that few of those workers covered by JLCs actually benefit from overtime pay. </li></ul>

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