The minimum wage in the UK is set to increase and drive the gap between it and the Isle of Man even further apart.
UK Chancellor Rishi Sunak announced last week that there would be a rise to £9.50 in minimum wage.
The Isle of Man currently has a minimum wage of £8.25.
This means that those on minimum wage in the UK are £1.25 better off than those in the Isle of Man.
He said: ’One in six workers earn less than the living wage. This guarantees that many people in full time employment remain trapped in poverty.
’Workers who earn nothing cannot spend money they don’t have, a low-wage economic strategy is starving the consumer economy.
’Workers living paycheck-to-paycheck pay fewer taxes which further weakens our social safety net.
’An employer who has employees reliant on the benefit system to make ends meet is essentially reliant on taxpayers to cover the full cost of the labour they receive.
’Workers on insecure, low-value contracts cannot plan for the future, buy homes or start families.
’The thousands of people who earn less than the living wage, many of which are essential workers, are denied the opportunity and dignity they deserve.’
Fellow member of the Manx Labour Party and Douglas South MHK Sarah Maltby will be pushing for the minimum wage to be aligned with the living wage, of £10.87, within the next five years.
This follows Tynwald’s approval of 15 recommendations by the Select Committee on Poverty in July.
As it stands, the living wage for the Isle of Man in 2021 is £10.87 per hour. The Manx living wage is £2.62 an hour more than the island’s current minimum wage for over 18s.
The rate reflects a weekly wage, before tax, of £413.21 and an annual salary of £21,487.
Mrs Maltby explained why she feels this is so important.
She said: ’We are really pleased that Tynwald accepted the recommendations from the Poverty committee in July that the Manx minimum wage should transition to a living wage in the next five years.
’This needs to be a priority and we are keen to work with the government to see if this can be done more quickly.
’This is important to me for at least two reasons - firstly it ultimately increases revenue and also I think it is widely accepted that people living in poverty is morally unacceptable.’
In Jersey, the minimum wage is currently £8.32 per hour as of April 2020, but the social security minister is currently pushing for that to rise to £9.22 an hour.
Due to the pandemic, the employment forum hasn’t been able to carry out its usual consultation exercise to determine a rise for this year.
In Guernsey the current minimum wage is at a rate of £8.70 per hour as of this year, 45p higher than the Isle of Man’s rate.