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Wage Bargaining6.4.2 The Minimum WageA National Minimum Wage (NMW) was introduced in 2000. Priorto its implementation, an ESRI report prepared for the Inter-Departmental Group on the Implementation of a Minimum Wageestimated that over the short-term a minimum wage of £4.40(€5.59) would reduce employment and increase both unemploymentand inflation (Nolan et al., 1999). In its Strategy document theCouncil (1999) also considered both the benefits and costs ofintroducing this ‘floor’ to wages. The Council highlighted inparticular the predicted impact on women’s labour supply, a rise ofthree percentage points compared to a 1.5 percentage point increasefor men.Within a year of introducing the NMW legislation, a surveyundertaken by Nolan et al. (2002b) indicated that more than 95 percent of firms viewed the NMW as having had no impact on thenumbers they had subsequently employed. Furthermore, 96 per centof all workers were by then earning an hourly rate equal to or abovethe NMW. They conclude that the minimum or sub-minimum wagedid not appear to be a factor influencing the probability of a firmgoing out of business. Rather, 80 per cent of firms reportingincreases in wages at the time of the survey stated that thesereflected trends in the tight labour market. Meanwhile O’Neill et al.(2002) argue that the legislation has had a negative effect onemployment for a small number of firms most severely affected bythe legislation. However, they found that the size of these effects isstill relatively modest.O’Neill et al. (2002) highlight that individuals earning less than theNMW are concentrated in sales and personal services, reflecting awider concern that enforcement of the NMW in Irish workplacesfalls short of total compliance. This also resonates with the findingsof Nolan et al. (2002b) that younger and female workers are mostlikely to experience low pay, the extent of this phenomenon beingproportional to the size of the informal economy (Ioakimoglou andSoumeli, 2002). Identifying the number of low/under-paid workersin the Irish economy might also provide some clarification of thenumber and work conditions of non-nationals in the Irish economy.259