The report reviewed the impact of raising the minimum wage to £7.90 per hour, based on 45% of mean weekly earnings, or to £8.40 per hour, based on 60% of median earnings, to estimate the potential consequent economic and fiscal impacts. The States' Assembly agreed on a 45% minimum wage level as the target to which Jersey should aspire by 2026 at the latest, subject to economic conditions. 

The conclusion of the report was: "Raising the minimum wage would have the direct impact of increasing wages for a significant number of low-paid employees, which could in turn reduce poverty, improve welfare, and increase spending in the economy. At the same time, raising the minimum wage could impose higher costs on businesses, which could ultimately lead to negative impacts on employment, and higher inflation, as businesses pass these costs on in the form of higher prices."

Pictured: The evolution of the minimum wage since 2005, the figures for 2018 show the two higher rates considered for the report.

While increasing the minimum wage to 45% of mean weekly earnings would see incomes increasing for nearly one quarter of employees, and could create £2.4m customer spending in the economy, the report states there would also be negative effects. Those include "...an increase in firms’ costs, following which we would expect a number of job losses, reduced hours, increased prices for consumers, and lower firm profits." The report estimates the net job losses to be around 60  and says they would be concentrated in the hospitality, agriculture and retail sectors.

Pictured: The Oxera Consulting report warns that one of the effects of the a higher minimum wage could be job losses, primarily in the hospitality, retail and farming

However, Peter Le Maistre, the President of the Farmer's Union, says these figures are "way too low." He told Express: "I know farmers that will lose 60 employees on their estate. We are very concerned by any large increase of the minimum wage and we will be seeking to meet with Lyndon Farnham to see if any extra support would be given to help us cope with a rise of that magnitude."

In considering the report, the Chief Minister, Senator Ian Gorst, said: “It is clear that a significantly higher minimum wage could bring both positive and negative consequences, with many employees benefitting and potentially higher consumer spending, but potential job losses and lower incomes for some. Overall, however, this report shows that the States’ aspiration to achieve a minimum wage of 45% of earnings by 2026 is too slow. I therefore want to accelerate the timetable, delivering this change by 2020. This will benefit many workers, and support our overall objectives for our economy, population and society. I will be bringing a proposal to the States later in the month to deliver this."

“In doing this, I want to work with other Ministers and Members in looking at how we could support the sectors most affected, promoting productivity and offering support to help businesses to adjust to the proposed change.”

Pictured: The Chief Minister wants to increase the minimum wage to 45% of earnings by 2020, instead of the previously agreed deadline of 2026.

However, Reform Jersey declared they were "disappointed" by the government’s new plan which they say "...does not go far enough." In a press release, the party compared the Chief Minister's plans to the UK's, who "...a target of having their National Living Wage (the equivalent of the Minimum Wage for workers over 25 years old) reach 60% of median earnings, or £9ph, by 2020. Their NLW currently stands at £7.50ph, whereas Jersey’s Minimum Wage lags behind at £7.18ph."

 Pictured: Reform have commented on the Chief Minister's plan saying it "...does not go far enough."

Party chairman Deputy Sam Mézec said: “We are extremely disappointed that, once again, the government of Jersey is content to see our Minimum Wage rate fall well behind that of the UK and well below what is considered a living wage. Jersey’s Minimum Wage is currently the lowest in the British Isles, including Guernsey, and is set to fall even further behind the UK under Ian Gorst’s proposals.”

“Of the two options examined in the Oxera report, the Chief Minister has opted to go for the lower amount. Reform Jersey believes this does not go anywhere near far enough and we will look to bring forward alternative proposals to see the higher amount adopted in the short term. In recent weeks and months there has been much political discussion on the effects of poverty in our society. We believe that proposals need to be considered to end poverty wages in Jersey and promote a real living wage which workers can live on without needing to claim benefits.”

The Employment Forum, which is currently consulting on minimum wage, will be taking into about the Oxera report before they release their recommendations on the 2018 minimum wage in September.