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A highly anticipated report that campaigners hoped would prompt Ministers to “make good” on a post-election pledge to align the minimum wage and Living Wage has advised against introducing a statutory wage rate based on the cost of living in Jersey.
Published yesterday, the wage review was commissioned by the Social Security Minister and did not seek input from the island’s key Living Wage organisation, Caritas Jersey.
It concluded that setting the Living Wage into law would not be “feasible or desirable”, largely due to the methodology used to calculate it, and that the existing way of setting the minimum wage “remains fit for purpose”.
The report’s publication yesterday came just days after Caritas announced that Jersey’s Living Wage – which considers cost of living, taxes and the value of benefits available to working people on low incomes – would be set at £13.41 next year.
The increase was said to be in line with the latest inflation rise (10.1%).
Pleased to announce the #JerseyLivingWage rate for 2024 will be £13.41 p/h.
— Caritas Jersey CEO (@CaritasJsyCeo) December 15, 2023
At a time of unprecedented cost of living challenges & increasing poverty in our island, a #LivingWage has never been so vital for so many. The new rate reflects the most recent inflation figure of 10.1%
CEO Patrick Lynch said paying the Living Wage had “never been as important as it is now”, adding that this was even more important for islanders without five years’ residency “for whom there was very little support” in the Government Plan.
“We have seen over recent weeks and months, along with our charity partners, foodbanks and others, the huge increase in need across our island,” he said.
Pictured: There has been a "huge increase in need" in Jersey recently.
“As we enter into winter there is real concern about the levels of poverty and those people for whom their wages no longer meet their outgoings, such are the increases they have experienced in rent, utilities and other costs.”
Speaking in advance of the publication of the report on Friday, Mr Lynch said that he hoped it would “signal that [Ministers] will make good on their post-election commitment to raise the minimum wage to parity with the Living Wage during the lifetime of the current Assembly”.
Pictured: Caritas CEO Patrick Lynch said the charity was “disappointed” to have not been consulted.
He added that Caritas was “disappointed” to have not been consulted, but went on to invite Ministers “to engage with us after the publication of the report to examine how best to ensure a smooth transition to parity between the two rates”.
But the report suggested that transition to “parity” may be slower than initially anticipated.
The States Assembly agreed in 2021 to set an “objective” to raise the minimum wage to two-thirds of median earnings by the end of 2024, subject to “economic conditions”.
The review said this commitment should be “maintained” – but not written into law. It noted that it “is likely to be difficult” to reach the two-thirds target by the end of 2024.
This is because the current level of minimum wage – £11.64 for 2024 – is about 58.2% of the current median wage. However, under the 2023 median wage of £800 per week, two-thirds target would give a minimum wage rate of £13.33 per hour – just short of what Living Wage campaigners are proposing.
Pictured: The States Assembly agreed in 2021 to set an “objective” to raise the minimum wage to two-thirds of median earnings by the end of 2024, subject to “economic conditions”.
The report argued that sticking to a wage rate linked to median wages – rather than following campaigners’ Living Wage calculations – provided “flexibility to adjust to unforeseen circumstances”.
“Given the inevitable fluctuations in economic activity from year to year, it would be difficult to justify the introduction of a statutory rate which could not be adjusted when circumstances require it,” it said.
“The model of setting the local independent body a target and providing flexibility within that target gives clear direction to employers as to the aspirations of the government without binding the government to a calculated rate that may be economically damaging in a given year.
“This is the current approach in Jersey, where the existing [2021 commitment], takes account of economic conditions, and provides a clear direction to employers without creating an undue restriction on rate setting from year to year.”
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