KEY TAKEAWAYS.
| Key Point | Summary |
|---|---|
| Minimum Wage Increase offers limited real improvement | Wage gains are mostly absorbed by rent. |
| Housing costs, not wages, determine living standards | With supply very low, higher wages do not translate into improved affordability. |
| Apple’s €14bn windfall | Immediate, strategic investment in social housing infrastructure, would have created long-term affordability for everyone. |
| Without reform, future wage rises will remain mostly ineffective | Minimum-wage earners remain locked out of buying or securing stable rental housing. |
Summary of Main Points from the Journal Article.
To read the article that inspired this post, kindly go HERE
- From 1 January 2026, Ireland’s national minimum wage will rise by about 5 % from €13.50 to €14.15 per hour.
- Ireland’s current living wage is just over €15 per hour.
- The main question is whether this increase will drive inflation. The short answer is yes; but research suggests that the impact on general inflation is minimal.
- In Ireland, around 10% of the workforce is paid at or below the minimum wage.
- For individual firms in low-wage sectors (e.g., hospitality, retail), the cost impact may be more noticeable (e.g., fewer hours, higher input costs) but nationally it remains minor.
- The wage increase is part of a long-term goal to introduce a “living wage” (about 60% of median earnings) which is currently just over €15/hour as mentioned above.
As we are all painfully aware, Ireland faces several crises – rising living costs, slow wage growth and a housing system that is unable to meet national needs.
In this context, the Government’s latest minimum-wage increase and my consistent argument about the need to utilise the €14 billion Apple windfall as soon as possible raise an important question: Do minimum wage increases matter if systemic barriers prevent those incomes from truly improving living standards?
What Does This Mean for Irish Housing Policy?
1. Minimum Wage Increases Do Not Mean Housing Gains.
A higher minimum wage means some households will have slightly more money to spend. This could improve their ability to afford rent (or mortgage payments for some in rare situations).
However, given that minimum-wage earners are a minority (~10%), the broad effect on national housing demand will likely be minimal. For housing policy, this suggests that wage growth alone is not enough to overcome shortages in housing supply or major issues with affordability.
EXAMPLE.
- A jump from €13.50 to €14.15 is an increase of €0.65 per hour.
- A full-time minimum-wage worker gains roughly €100–€120/month after tax (depending on hours).
- That is helpful for basic bills such as groceries, utilities or transport. But it’s nowhere near enough to qualify for a mortgage or upgrade rental housing in a significant way.
WHY?
A full-time minimum-wage worker earns roughly:
- €2,200–€2,500 gross per month
- €1,900–€2,000 net per month, depending on tax credits
A one-bed at €1,600 requires:
- €1,600 net income alone (or around €1,200, much further away from larger towns), leaving virtually nothing left after rent and bills are paid.
To summarise, most minimum-wage workers will not move into better rental homes, qualify for mortgages, and their living standards in terms of housing will remain unchanged, except that they will be slightly less stressed about current bills.
So the best decision for most remains a house-share.
Moving to a much cheaper town is another recommendation, but it completely overlooks the current complex political, economic, social and emotional situations that many people in minimum-wage situations face.
2. House Prices are Mostly Driven by Supply, not Wages alone.
The article suggests that wage rises are not a strong driver of general inflation.
For argument’s sake, we can argue that increases in minimum wage have almost zero impact, but high wage increases across major sectors definitely do. In fact, a significant portion of the current housing crisis can be attributed to wage inflation in Irish tech and pharma sectors over the last decade.
- Similarly, increases in housing costs (rents & prices); are more about low supply, land costs, planning delays, and utility infrastructure than wage inflation.
With average rents now exceeding €2,000 per month nationwide and €2,583 in Dublin, a full-time minimum-wage worker earning approximately €2,000 net per month remains priced out of both rental and ownership.
As long as wage increases remain far behind housing inflation, the minimum-wage growth produces only tiny improvements in disposable income and does not unlock access to stable or quality accommodation.
- In short – higher wages cannot compensate for structurally high rents in a market limited by supply.
3. Construction, Hospitality & Rental Costs may Go Up in 2026.
In sectors such as building, property management, maintenance, and hospitality (which have a direct link to housing supply and accommodation), increases in minimum wages will mean an increase in salaries.
- This could push up overall building costs or rental maintenance costs, which may then lead to higher housing prices or rents; especially when supply is tight.
- As a result, construction firms and landlords may pass on this increase in cost to buyers & renters unless prevented by regulation or subsidy.
4. Increase in Various Tax Liabilities.
For those on minimum wage who own a home with a partner, a higher minimum wage may push your household into higher tax/USC bands, and your property valuations may rise too.
This means homeowners may face higher USC & property taxes (as you need your PPSN to use the Revenue platform), unless there is some adjustment in policy.
Why the €14 Billion Apple Windfall Matters for Short & Long-Term Living Standards for Irish Residents.
If you are a regular reader, you know that it is not a MyLittleHome housing post unless we mention the €14bn Apple tax windfall.
From a purely economic perspective, the €14 billion Apple windfall (collected in July 2025) presented a rare opportunity for immediate & impactful transformative investment in social housing.
Unlike general taxation or borrowed funds, this windfall:
- Carries no long-term debt obligations as typical loans do (meaning it does not need to be repaid)
- Did not come from the taxpayer, so it’s essentially ‘free’ government cash
- Provides immediate liquidity
If it was deployed immediately, this fund could put a massive dent in the housing crisis. Instead, it has been absorbed into the long term National Development Plan.
1. Short-Term Impact (0-12 Months)
A. Minimum-wage Workers Could Have Zero/Lower Rent Increases.
Even if the State didn’t build houses immediately, an intentional and believable signal of massive upcoming supply will reduce speculative rent increases. And markets typically respond to expectations – this includes landlords.
A credible announcement that says:
“€8 Billion of the recent Apple Tax Windfall will be used to deliver 30,000 social homes over the next 2 years.”
… can have a chilling effect on rent increases, because landlords know supply is coming in huge numbers. And that it’s coming fast!
So while minimum-wage earners wouldn’t suddenly get new homes, they would at least:
- Face slower rent inflation
- Have more breathing room
- Not see their wage increase swallowed by rent increases
B. Upgrades to Infrastructure can Reduce Housing Cost
If €1–2 billion went to Uisce Eireann’s current Leakage Reduction Programme, we could benefit from:
- Fewer boil notices from Uisce Eireann
- Fewer connection delays for remote homeowners
- Fewer development delays for developers that have already been granted planning approval
This could mean:
- Billions of litres of essential treated water saved per year
- Lower build costs for developers
- Quicker project timelines
- Fewer risk premiums added to housing supply
C. Social Housing Allocations Could Increase in 12 Months.
There are over 80,000 vacant & derelict buildings in Ireland that could be repurposed for social housing. If government used the Apple windfall to identify, purchase and renovate qualifying vacant homes within a certain price:
- 3,000–6,000 units could come online within 12 months
- Thousands of low-income renters, families at risk of homelessness could be moved into secure housing
- Pressure on private rental supply would be instantly reduced
2. Long-Term Impact of Apple Tax Windfall (1-5 Years).
After the first 12 months of use, the Apple windfall becomes truly transformative for low-earners and Irish residents as a whole.
This is because wages do not determine housing affordability in Ireland right now; Supply does!
If supply increases substantially, low-income workers benefit even if their wage rises are modest.
Here’s what would logically happen over the long term:
A. Rent Stabilises & Workers Keep More of Their Income.
When housing supply increases:
- Rent Increase slows down significantly as more homes become available
- Vulnerable workers avoid possible brutal eviction cycles
- Minimum-wage earners no longer have to spend 50–70% of their income on rent
As a result of proper use of the Apple tax windfall for housing, the minimum-wage increase becomes real, not just symbolic.
Workers in Ireland can actually improve their standard of living, instead of feeding a runaway rental market. This is how countries like Austria, Finland, the Netherlands and Denmark maintain affordability even with modest wages.
B. Cost Rental Becomes a Real Option & Not a Lottery
If some of the Apple tax windfall was directly allocated to cost-rental developments under the Land Development Agency, Ireland could create:
- About 15,000 State-Owned cost-rental units in the long term
- Available to ordinary working households & the lowest-income groups
This could allow:
- Minimum-wage earners to live with dignity
- Reduce dependence on private developers for housing
This alone would improve minimum-wage living standards more than any wage policy.
Overall,
A bold, intentional, strategic and immediate investment of around €8 billion over 1-2 years could deliver:
- Thousands of social homes through the acquisition of vacant and/or derelict units
- Large-scale State-owned cost-rental developments
- An expansion of State-owned land for development
- Save more than 100 billion litres of treated water per year, which is currently being lost through old pipe leaks – which could be vital for construction.
- Adoption, acceleration & delivery of social modular housing… and more!
This would not simply improve conditions for the lowest-income workers; it would completely stabilise the entire Irish housing market within 5 Years at most!
But I do not want to sound repetitive, so to read other posts on the numerous benefits of immediate Apple tax implementation, please go HERE.
Conclusion
Minimum-wage increases are crucial for income protection in Ireland, but they cannot improve living standards without the necessary improvements in housing supply, infrastructure, and affordability.
The Apple windfall of 14 billion could have been deployed immediately in ways that would stabilise the housing market and improve long-term living conditions for Irish residents. Instead, it sits idly in the Exchequer (the central account of the Irish gov’t), while the housing crisis remains largely unaddressed, and the burden continues to fall on the average Irish resident.
Real reform in Ireland requires long-term supply, immediate strategic investment, and a revision of its current planning system.
Right now, the Irish government is probably the only government in the world sitting on a literal €14 billion goldmine with ZERO strings attached; and yet it lacks the political willpower to make use of it.
