A new study from the Economic and Social Research Institute (ESRI) has found that recent increases to the minimum wage did not lead to low-paid workers losing their jobs.
The research also found, however, that employers may be increasingly using sub-minimum youth wage rates to keep labour costs low as the minimum wage gets higher.
The minimum wage in Ireland increased every year from 2016 to 2025.
A key concern for minimum wage policy is whether raising the rate causes low-paid workers to lose their jobs as a result of employers reducing their workforce due to higher labour costs.
The new research, funded by the Low Pay Commission, examined whether minimum wage employees became jobless in the six-month period following a minimum wage increase.
The study found no evidence that recent minimum wage increases in Ireland increased the likelihood of minimum wage employees losing 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 states.
"It is possible that similar policy changes could generate different outcomes if enacted during a period of weaker economic performance," it added.
The study found that while minimum wage employees are generally more likely to become unemployed than higher paid workers, the likelihood of this happening did not increase following increases to the minimum wage.
According to the research, larger minimum wage increases did not coincide with a higher likelihood of minimum wage employees becoming unemployed.
"It is important to monitor whether increases to the minimum wage result in negative employment effects for low-paid workers," said Dr Paul Redmond, an author of the report.
"In this study, we find that 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," Dr Redmond said.
Sub-minimum youth rates
The study also examined the employment of workers in receipt of sub-minimum youth wage rates.
Current legislation allows for lower, or sub-minimum rates for those aged under 20.
The minimum wage for those aged 19 is 90% of the prevailing rate, for those aged 18 it is 80% and for those aged 17 and under it is 70%.
This research found that while youth minimum wage rates were rarely used in the past, there appears to be an increasing reliance on them by employers.
In 2019, less than 20% of employees under 20 years of age were paid a sub-minimum youth wage, however this increased to 30% in 2025.
"It is possible that employers are increasingly using sub-minimum youth wage rates to keep labour costs low as the minimum wage gets higher," the report found.
The research also concluded that overall, young workers that 'age into' a higher minimum wage band did not experience an increased likelihood of job loss following their birthday.
"The Low Pay Commission values the depth of this research and its strong evidence-based approach," said Ultan Courtney, Chairperson of the Low Pay Commission.
"Our work relies on rigorous, data driven research and this research provides valuable insights into the effects of increases in the minimum wage."
"The research will support our discussions as we prepare our recommendation to Government on the 2027 minimum wage," Mr Courtney said.
