Noting that restaurant workers currently earn just half the national average, TASC argues that further reducing their wages would exacerbate Ireland’s already high levels of income inequality while failing to address the problems being experienced by the restaurant sector.

Commenting on the briefing, TASC Director Paula Clancy said:

“Last year, TASC published the ‘H.E.A.P. Report’ which examined earnings inequality in Ireland. Now, in ‘A Square Deal?’, we examine the situation of one group at the bottom of the earnings heap – restaurant workers, many of whom earn too little to put a square meal on their own families’ tables. All the evidence shows that more unequal societies have poorer outcomes across a variety of indicators, ranging from life expectancy via literacy levels to imprisonment rates. This document shows that any measures which further increase inequality will simply compound the problems being faced by the economy in general and the restaurant sector in particular”, Ms. Clancy said.

TASC Head of Policy Sinéad Pentony said:

“In addition to further widening the income gap, TASC believes that reducing restaurant wages would fail to address the real cost issues (such as the high cost of food and commercial rents). By taking more money out of employees’ pockets, wage cuts would further undermine the public finances by depressing consumer demand (which would also affect the restaurant sector), reducing the income tax and VAT take, and increasing direct Exchequer expenditure - in the form of, for example, increased Family Income Supplement expenditure. TASC estimates that the Exchequer would lose approximately €1,143 for every full-time general worker whose wage was reduced to the statutory minimum. An across-the-board 8 percent cut in wages in the hospitality sector will cut consumer spending by approximately €170 million.

“At the same time, wage cuts would do little to reduce the price of a meal out: we have calculated that abolishing JLC pay scales would mean a reduction of just 61 cents per customer for a meal costing €60 for two.

“Rather than counter-productive wage reductions, TASC recommends an alternative strategy. This should focus on boosting consumer demand and addressing those factors (such as commercial rents and input prices) which have a demonstrable impact on profitability in the restaurant sector”, Ms. Pentony concluded.