A recent study by the Economic and Social Research Institute (ESRI) has found that increases to Ireland’s minimum wage between 2016 and 2025 did not lead to low-paid workers losing their jobs. The research also highlighted a rising trend among employers to use sub-minimum youth wage rates as a way to manage labour costs.
The study, funded by the Low Pay Commission, examined the employment outcomes of minimum wage workers in the six months following each annual increase. It found no evidence that raising the minimum wage made employees more likely to lose their jobs.
“It is important to acknowledge that the minimum wage increases that we focus on in this study coincided with a period of strong economic growth and low unemployment,” the report said. “It is possible that similar policy changes could generate different outcomes if enacted during a period of weaker economic performance.”
The research noted that minimum wage employees are generally more likely to experience job turnover than higher-paid workers, but this risk did not rise in response to wage increases. Larger increases in the minimum wage were not associated with higher unemployment among low-paid employees.
Dr Paul Redmond, one of the study’s authors, said, “Recent minimum wage increases, which occurred during a period of strong economic growth and low unemployment, did not increase the likelihood of minimum wage employees losing their jobs. It is still important to monitor whether future increases might have negative employment effects.”
The report also examined the use of sub-minimum youth wage rates, which are allowed under Irish law for workers under 20. Employees aged 19 earn 90 percent of the prevailing rate, those aged 18 earn 80 percent, and those 17 or younger earn 70 percent.
The study found that while sub-minimum youth rates were rarely applied in the past, their use has grown. In 2019, fewer than 20 percent of employees under 20 received a youth rate, but by 2025 that share had risen to 30 percent. Researchers suggested this may reflect employers’ efforts to limit labour costs as the overall minimum wage rises.
Despite this, the study found that young workers moving into a higher minimum wage band did not face an increased likelihood of job loss after reaching the new rate.
Ultan Courtney, Chairperson of the Low Pay Commission, said the research provides “valuable insights into the effects of increases in the minimum wage” and will inform the commission’s recommendation to the government on the 2027 minimum wage. “Our work relies on rigorous, data-driven research, and this study strengthens our understanding of how minimum wage policy impacts low-paid workers,” he said.
The ESRI study suggests that Ireland’s strategy of gradually increasing the minimum wage has supported low-paid workers without triggering the job losses that are often a concern in debates over wage policy.
