LEGISLATION to bring Jersey’s minimum wage into line with the living wage will be brought to the States by the end of next year – but a charity has warned a ‘tsunami of poverty’ could hit Islanders this winter.
The States Assembly unanimously approved the proposition yesterday from Deputy Sam Mézec, which was a Reform Jersey manifesto pledge during the election campaign.
Deputy Mézec had originally called for the necessary legislative changes to be made before the end of this year, but accepted an amendment from Social Security Minister Elaine Millar that that work would require a further 12 months to be completed.
The living wage is currently calculated by the charity Caritas, and is uprated every year after examining the prevailing economic conditions and determining what someone would need to earn on full-time hours to be able to sustain a basic standard of living without having to claim social security. It is currently set at £11.27 per hour.
Yesterday, it was confirmed that the minimum wage would rise to £10.50 an hour from the start of November prior to the living wage coming into force.
Deputy Millar said this would replace the previously announced double rise – to £10 per hour from 1 October, followed by a further increase in January.
But following the States vote, Caritas chief executive Patrick Lynch raised concerns, saying: ‘We understand the view that two moves in three months could negatively impact businesses. One move is sensible, but it is not an excuse to reduce the move from £10.80 to £10.50.’
He said he was ‘afraid a tsunami of poverty was coming in January’.
Outlining his proposition in the States, Deputy Mézec said: ‘I am asking you to endorse a deadline for when we will be talking about the legislation for when this will become a reality.
‘It is not something we can do overnight, but we have to have a pathway towards it. I had initially suggested that that work could be done by December this year. I was, I accept, being ambitious in that timeline.
‘I am happy to say that that deadline could be set for December next year instead, and it is OK to do that because there is a significant raise to the minimum wage in the meantime.’
Discussing the living wage in the Assembly, Deputy Millar said: ‘The technically challenging aspect is how we calculate it. What we would like to see is an approach that works for Jersey which is based on Jersey evidence and Jersey statistics.
‘I can confirm that I am as determined as Deputy Mézec is that this work should not drift and that we bring forward legislation by 2023.’
Deputy Lyndon Farnham said that he supported the proposal but added that certain sectors would need support to meet the change.
‘An important part of the process as we move to the living wage is that there are some businesses that will need help to bridge the gap in the short term and meet the significantly increased costs of their payrolls,’ he said.
Mr Lynch added: ‘For people on the minimum wage, 30p less in their pockets is a significant amount, especially considering the current cost of living situation, the upcoming winter and the first quarter of next year, when heating bills are higher and we have just come off the back of Christmas.
‘In reparation, we would like the government to back the [mini-budget] amendment to extend the 2% social security reduction. It won’t make up for it, but it will help.’
‘If they have backtracked from £10.80 in January, when will we see the next increase happen after November? At the latest, we would ask for it in the second quarter of next year as by then we will have a new living wage for 2023.’
