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Jersey's new Chief Minister officially begins his first week in the role today - and already he is facing strong criticism from business groups over using the minimum wage as a "bargaining chip" to get the top job.
The Chamber of Commerce have slammed what they call an “unresearched promise” between the new Chief Minister and Reform Jersey to increase the minimum wage towards £10 per hour, which they say could cost jobs.
The policy was one of eight agreed in a signed deal between Senator John Le Fondré and Sam Mézec, Chairman of Reform Jersey, in return for his party’s five votes for the Chief Ministerial role.
The policy statement said that, "It is agreed that the minimum wage should we progressively increased towards £10ph, with consideration given to benefits in kind provided by employers in agriculture and hospitality."
While claiming that it was “absolutely right” to regularly review wages, Chamber say that no agreement should have been made on raising the minimum without “full and detailed studies” into the consequences of such a move.
We thank John Le Fondré for his positive and constructive approach to us in wanting to find an inclusive way of working together.
— Reform Jersey (@ReformJersey) June 4, 2018
He opted to support him on the basis in the following agreement. We hope this demonstrates a new way of doing politics in Jersey. #democracy pic.twitter.com/4YBawskiJz
Given the potentially “serious impacts… on employers, employees, consumers and the wellbeing of the Jersey economy”, Chamber stated it was “concerned that such an agreement has been made, without taking the findings of [the Oxera report] report into account, lacking any assurance of consultation with those who will be impacted and without any agreement of a new Council of Ministers.”
An independent review into increasing the minimum wage conducted by Oxera in June 2017 stated that raising minimum wages from £7.88 to £8.40 could result in high costs for firms, which could result in job losses, higher prices for consumers.
Chamber said that these findings should have been taken into consideration, and that it was “concerned” that there had been no assurance of consultation of agreement within the new Council of Ministers over the move.
While stating that they remain “open to dialogue” with the new government, the group issued a rallying call for “restraint in making such unresearched promises, which have raised serious concerns from local businesses.”
Pictured: Eliot Lincoln, President of the Chamber of Commerce.
Eliot Lincoln, President of the Jersey Chamber of Commerce, commented: “Any increase to the minimum wage will have an effect on businesses, especially for small and medium sized organisations within the hospitality, agriculture and retail sectors and a minimum wage that keeps pace with inflation is, of course a reasonable and measured action.
“But to exceed it to a level that could force companies out of business, increase unemployment, reduce hours and raise prices for consumers, must be considered very carefully and in fully light of the consequences over a realistic timeline, rather than utilised as a bargaining chip for block votes of support.”
The comments come just as the Employment Forum launch this year's minimum wage review. Jersey's minimum wage currently sits at £7.50 per hour for all employees over 16 years old, but the Forum want to hear islanders' views on whether this needs to change from 1 April 2019, as well as trainee rates and maximum offsets for food and accommodation.
Pictured; Current rates for 2017 and 2018.
A consultation has now been launched, and can be completed online. All responses should be received by 27 July 2018.
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