Housing crisis

Why raising wages won’t solve the housing crisis: ‘Politics got us into this mess’

An increase in the minimum wage will not make any dent in the housing crisis.

That’s according to ISME chief executive Neil McDonnell.

It was responding to proposals that Ireland’s national minimum wage could be replaced by a living wage in four years.

This would be set at 60% of the median salary over a year, with plans based on research by the Low Pay Commission.

This means that if you earn a minimum wage of €10.50 per hour, it will increase to €12.17.

But neil said hard shoulder it will not alleviate the housing shortage.

“In May 2012, there were 15,000 properties available for rent on Daft.

“In May just past, there were 851 across the country – that’s a 96% drop in inventory.

“It was because of political decisions to tax the provision of housing by landlords.

“So it’s politics that got us into this mess, and we’re not going to get out of it by just raising wages.”

“Money Transfer from Employers to Landlords”

He says the salary can go up to 30 euros per hour, but everything is relative.

“Don’t worry about your 12.90: you can go to €20 an hour, you can go to €30 an hour.

“Whatever you will do, when you have a situation like you have in the country…when there is a desperate, desperate short [sic] housing is that you will transfer money from employers, who can barely afford to pay it, to landlords and property owners.

“We have to understand that forcing wages by legislative decree is simply doomed to failure.

“And we actually have to start tackling the root cause of rising costs: and the only way to do that is to provide more housing.”

He adds: “As long as we continue, and I have to be critical here, with this illusion that if we just try to drive up the cost of wages, we will attack the cost of living.

“And I’m afraid that just won’t happen.”

Earlier President Michael D Higgins tagged housing policy in Ireland a “great, great failure”.

He said the housing situation “is no longer a crisis. It’s a disaster”.

“I think we really have to think about meeting the basic needs of people in a Republic – whether it’s food, shelter or education.

“Building houses is what’s important. It’s not being a star player for the speculative sector internationally or anything else,” President Higgins added.