Worries over minimum wage war
WRANGLING over proposals for the minimum wage in the island always feels and, indeed, looks awkward. And it’s often pitting States committee against States committee, in this case Economic Development claiming to be doing the bidding of (largely) the retail sector.
But there is a sense that even in what has been an inflationary climate in recent years, the minimum wage is racing ahead quicker than the more vulnerable sector of our economy can keep pace with.
A proposed rise of 12.7%, taking the minimum wage to £12 an hour, is a huge leap for those businesses rather bumbling along the bottom, in some cases barely making much of a living, yet playing a valuable role in the community.
For them, also picking up the tab for increased social security payments and, in some cases, pension payments for the first time, this is a leap too far. It might cost jobs.
It also leaves employers concerned at the reputational blow of being seen as a minimum wage employer. Since 2021, when the rate was £8.70 an hour, it will have risen by 37% if the proposed £12 is accepted. Employers seeking to maintain a differential with the minimum wage would now be looking at £15 an hour.
It’s an awkward conversation. But a debate and a direction that needs an airing.