Chamber of Commerce speaks out
Businesses on the Isle of Man are raising concerns about the potential economic impact of proposed changes to the minimum wage.
According to the Isle of Man Chamber of Commerce, the proposed move to harmonise the living wage with the minimum wage by April 2025, could have far-reaching consequences, both in the short and long term.
A recent report commissioned by the Island's Minimum Wage Committee, conducted by the London-based firm Pragmatix Advisory, highlights that raising the minimum wage to £13.73 next year could cost private and third-sector businesses up to £188 million.
The Chamber, while acknowledging there are potential benefits, warns of significant challenges that could threaten the economic stability of many businesses.
The proposed increase represents a 28% rise from the 2023 minimum wage rate of £10.75.
The Chamber believes that such a rapid increase will put the Island's businesses at a competitive disadvantage, potentially leading to layoffs, reduced hours, or even closures.
CEO Rebecca George says "we appreciate the commitment of Tynwald and the Isle of Man Government to support lower-paid workers.
"However, there are widespread concerns about the proposed timeline and its potential economic ramifications."
The Chamber is urging the government to reconsider the April 2025 deadline and explore ways to provide support to businesses facing increased costs.
They suggest a more gradual approach to the wage increase, allowing businesses time to adapt and prevent sudden economic shocks.
In response, government says: 'The Treasury and Department for Enterprise acknowledge the complexity of the topic of the Minimum Wage rate in the Isle of Man, which must balance the needs of employers and employees and take into account the broader economic context. Both Departments are jointly responsible for considering recommendations from the Minimum Wage Committee, an independent body established by law.
'For 2024, the Committee requested an independent report be commissioned to support them to make a recommendation, funding for which was agreed earlier this year. Following receipt of the report, it is now up to the Committee to review the report's findings, along with other inputs from their consultation process, to make a well-rounded recommendation. Given the report’s limitations due to its sample size, it is expected to be considered as one element in a broader assessment.
'Both the Treasury and Department for Enterprise recently met with the Minimum Wage Committee to encourage them to publish their report and bring forward a recommendation to enable the Departments to lay a proposal before Tynwald in October. Ultimately any adjustments to the Island’s Minimum Wage rates will be subject to Tynwald consideration and approval.'
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