Smaller increase of minimum wage ‘expected due to Covid’
CUTTING the rate of increase in the minimum wage is understandable, but pressure will remain for more to be done to tackle in-work poverty in the future, a former deputy has said.
The proposed increases are in line with RPIX of 2.4% rather than the expected 5.9% increase put forward by Employment & Social Security in 2018 as part of annual rises over five years until 60% of median earnings is reached by 2023. This has now been pushed back a year.
Former Scrutiny Management president Chris Green expressed his regret about the limited rise, but appreciated the reason why.
The committee led an in-work poverty review last term.
‘I am disappointed by this decision because it is inconsistent with the direction of travel agreed by the States only in 2018,’ he said.
‘But of course I totally understand why this approach has been suggested, given the ongoing effects of Covid-19 on certain businesses.’
However, he added that the decision would add to the financial issues that certain workers already face in the island.
‘In-work poverty is a real issue,’ he said.
‘The new States needs to do something about it to assist those workers affected by it.
‘I just hope that the agreed direction of travel – to make the statutory minimum wage match the 60% of median earnings by 2023 – can be progressed next year.’
Chamber of Commerce tourism and hospitality lead Charlotte Walker said she thought the smaller rise was more appropriate given the current climate.
‘I was consulted with regards to the proposed increase and felt it was the right decision at this time,’ she said. ‘In hospitality especially it is quite a pressing issue that the rise was less than the 50p intended for us to be able to pay and retain as many staff as possible.
‘Though I agree with the proposed annual increment increases, right now the smaller increase is more suitable to ensure we revive and thrive, rather than revive and survive.’
Labour Force owner Ross Le Brun, who was disappointed to miss out on a seat in the new Assembly, said the minimum wage as it is was was not enough for people to live on and believed both a higher minimum wage or a lower increase than expected would have a knock-on effect.
‘Local hospitality traditionally struggles at this time of year and a high minimum wage would close some down with a loss of custom due to higher prices,’ he said.
‘If the minimum wage was put to a level that people could afford to have a disposable income while paying rents, landlords would just up the rents, so we are then back to square one.’
Under proposals the rate would go up by 20p to £8.70 in January – still less than the UK, which is currently £8.72 for those aged over 25.
Guernsey’s young person’s rate, which applies to 16- and 17-year-olds, will increase from £8.05 to £8.25 per hour if the proposal is accepted by the States.
