Jersey should match UK pledge on £9 "living wage" - Deputy

Monday 13 July 2015

Ministers are being challenged to adopt a £9 “living wage” for Jersey and stop spending taxpayers’ money subsidising businesses that don’t pay their staff fairly.

In the States tomorrow, Deputy Andrew Lewis will challenge Chief Minister Ian Gorst to follow the example set by the Conservative budget last week and set a new “living wage” of £9.

Jersey’s current minimum wage is £6.78 per hour, so the £9 target would be a 30% increase.

The current policy is to move to 45% of the median wage by 2026 – on current numbers, that would mean weekly pay of £247.50. Based on a 35-hour week, that works out at roughly £7.07, so Deputy Lewis’s £9 target is a long way from what ministers are currently committed to.

Deputy Lewis – the chairman of the Public Accounts Committee and a former head of the Institute of Directors - said that by moving to a higher “living wage” for companies to pay, the taxpayers would have to spend less on benefits propping up incomes for the low paid.

He said: “Not only does the living wage create a greater incentive for people to take jobs but it stops the ridiculous situation that we currently find ourselves in whereby the government is subsidising the few businesses that do not currently pay a living wage. It does this by topping up workers’ salaries through income support and supplementation.

“Living wage detractors always point to the potential for jobs to be lost but this is a red herring. By paying people a decent amount for their work, you stimulate the economy by putting more money in consumers’ pockets and crucially, you increase the tax take at the same time.

“On the other hand, the current situation creates a perverse incentive for employers to pay their staff less, thereby reducing income tax and paying out more through benefits.

“Jersey has a strong economy, we saw that last week when the finance industry reported excellent profits for 2014. The introduction of a living wage would bolster our economic recovery and create a stronger platform for future economic growth.”