"Living wage in Jersey? We already have one"

Thursday 14 May 2015

There is no need to introduce a living wage in Jersey because the Island's minimum wage combined with Income Support adds up to exactly the same, a new report has concluded.

The study, published by the Chief Minister, not only argues that Jersey's minimum wage - currently £6.78 per hour - plus benefits satisfies the requirements of a living wage but also that introducing one would only benefit a tiny portion of the workforce.

A living wage takes into account the basic living costs faced by an average low income worker and the benefits that they can claim. These factors are used to set a single hourly rate. In London, some employers have signed up to a voluntary rate of £9.15 an hour.

The Chief Minister's report concludes that with Jersey's lower taxes and Social Security contributions, together with the cost of basics such as rent, taxes, childcare and food, the Island's minimum wage + Income Support meets the living wage criteria. Pulling everything together, it finds that the actual average wage is over £9.80 per hour. It also points out that raising the minimum wage - which one in ten workers is on - does not always help families on Income Support as they may lose benefits.

Chief Minister Ian Gorst said: "This report identifies the low take-up of the living wage among UK employers and it is unlikely that a local campaign would result in higher wages in sectors like retail and tourism. The best way to reduce poverty is to help people into work, to deliver earnings growth that is built on productivity increases and to constrain price rises so people have more money in their pockets. As a government these are the areas where we can make the most difference to hard-working, local families.

"The report also raises the question of whether our benefits are, in fact, too generous and we will certainly study this carefully."

Deputy Geoff Southern, who has campaigned for the introduction of a living wage, said the report was "disappointing and politically driven".

"It ignores the fact that the whole point of the living wage is to reduce people's dependency on benefits and transfer responsibility from taxpayers to employers," he said. "It is recognised internationally that a minimum salary should be 60 per cent of the medium wage, which in Jersey equates to £16,500 a year - and many Islanders earn below that.

"The report also fails to recognise the economic and business impact of a living wage - better staff retention, greater loyalty and higher productivity. My campaign is not over."