Minimum wage rise cost will be passed on to customers – CGi
A rise in minimum wage will inevitably mean that businesses will have to pass on increases to their customers, said Confederation of Guernsey Industry chairman David Newman.
His comments followed the launch of a public consultation by Employment and Social Security asking for people’s views on the idea of increasing the minimum wage to 66% of median earnings by 2030.
From October this year, the minimum wage will be 60% of median earnings – it is currently £10.65 per hour.
Mr Newman said that members had not yet had a chance to consult members for their views but the CGi recognised that people on lower incomes needed to be supported, particularly given the rapidly rising cost of living in the Bailiwick.
‘We have previously outlined that the minimum wage set by the States does not determine the level of pay for staff on-island,’ he said.
‘For a number of employers, these are set more by local market forces due to the extreme shortage of workers available, so they are having to pay higher wages in order to keep and attract staff.’
So any increase in staff costs, together with the rises in utility bills, petrol, raw materials and the introduction of secondary pensions, mean businesses will have no alternative but to increase charges and these will be passed on to customers.
‘When the minimum wage is increased, firms then have to raise their own wage structure to keep parity with the other employees who are paid above the minimum wage,’ said Mr Newman.
Economic Development committee president Neil Inder and vice-president Simon Vermeulen were the only two deputies to vote against the last increases to minimum wage, approved in July last year.
But Deputy Inder said he had not yet had a chance to consider ESS’s proposal to take it up to 66%. 'I don’t have a view on it at the moment,’ he said yesterday.
Last year he claimed that the move towards 60% was part of ‘an ideological drive’ that lacked supporting evidence.
