In a significant move to bolster the financial well-being of workers in Ireland, Finance Minister Michael McGrath announced in the Budget 2024 speech that the minimum wage is set to increase by €1.40 per hour. This substantial 12% increase will raise the minimum wage to €12.70 per hour. Starting from January 1st, 2024, the proposed increase will come into effect. Currently set at €11.30 per hour, the minimum wage has seen an 80-cent increase in 2022. This latest adjustment aligns with the recommendations made by the Low Pay Commission, which called for a €1.40 raise back in July.

Impact on Workers:

The increase in the minimum wage is undoubtedly a welcome change for workers, as it translates to higher take-home pay for those earning at or near the minimum wage threshold. It can help individuals and families better cover their essential expenses, improving their financial stability.

Protecting Lower-Paid Workers:

Finance Minister Michael McGrath emphasised that the wage increase ensures that lower-paid workers remain outside higher rates of Universal Social Charge (USC). This provides financial relief for these individuals and contributes to a more equitable tax structure.

Impact on Businesses:

While the minimum wage hike is a positive development for workers, it may pose challenges for businesses, notably smaller enterprises. Some will need to adjust budgets and pricing strategies to accommodate the higher labour costs. 

It's worth noting that the proposed minimum wage increase, while significant, still falls short of the recommended €14.80 National Living Wage. 

The upcoming minimum wage increase to €12.70 per hour in 2024 is a positive step forward in improving the financial circumstances of low-wage workers in Ireland. As it aligns with the recommendations of the Low Pay Commission, it reflects an effort to promote economic fairness.