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Could the living wage become the new minimum wage?

Could the living wage become the new minimum wage?

Sunday 07 April 2024

Could the living wage become the new minimum wage?

Sunday 07 April 2024

A politician is vying for the minimum wage to be raised to match the living wage before the current government leaves office.

In his proposition, Deputy Max Andrews said workers would gain financial independence if they received the living wage – an amount which rises in line with the latest inflation figures to acknowledge the increased cost of living.

He explained that the alignment would reduce the need for government support to top up low wages and cease to allow unsustainable business models to continue operating.

The minimum wage is currently £11.64, which has increased from £9.22 since 2022.

This is £1.77 an hour less than the £13.41 living wage for 2024.

Jersey's living wage is set by Caritas Jersey – a charity licensed by the UK's Living Wage Foundation to accredit employers with the living wage, aiming to ensure that workers earn enough to be able to live with dignity and thrive. Firms can voluntarily sign up to become living-wage employers.

The living wage rose from £12.19 in 2023, representing an increase of just under 10.1% in line with the latest rate of inflation.

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".

A review published last December said this commitment should be "maintained" but not written into law, noting that it is "likely to be difficult" to reach the two-thirds target by the end of 2024.

In January, Chief Minister Lyndon Farnham made a commitment to the living wage, which Deputy Andrews said demonstrated "a desire to raise the minimum wage to the Caritas living wage".

Deputy Farnham added that he was "realistic" about understanding the "financial pressure" that rise would put on small businesses who might not be able to afford it, including sectors like agriculture, tourism, hospitality and retail.

Deputy Max Andrews is hoping to speed up the Council of Ministers' plans and force the government to enshrine that alignment in law before the end of their term.

If his proposition passes, then the Social Security Minister would have to update the Employment (Jersey) Law 2003 to include this.

Deputy Andrews said: "I believe it is essential that the minimum wage is increased to match the living wage to support workers financial independence before the end of this term of office.

"It was one of my mandated policies to introduce a living wage and the lodging of this proposition seeks to do just that."

He acknowledged the government's "proactive steps to assist baseline wage workers" to date, but added: "Much more work ought to be done though as the minimum wage cannot be maintained."

Deputy Andrews argued that it was "imprudent" to maintain it, saying: "Jersey's low wage economy sectors are indirectly subsidised with employees receiving state support via transfer payments and rental subsidisation".

Caritas Jersey's CEO Patrick Lynch hit out at the government in December after they failed to consult the charity during their investigation into whether the living wage should be statutory in Jersey.

The government report concluded it was "neither feasible nor desirable" to introduce a statutory living wage rate in Jersey, and that "a statutory link to a specific formula or target could be counter-productive".

Mr Lynch said there was "real concern" about levels of poverty in the island and the increasing use of foodbanks.

Deputy Andrews last year received the backing of politicians for a proposition to bring trainee rates in line with the minimum wage.

His latest proposition is due to be debated on 30 April at the earliest.

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