Chamber calls for independent review of Jersey’s minimum wage system

It wants the review to consider greater flexibility between sectors, separate trainee and entry-level rates, and greater use of the tax and benefits system to support household incomes.

The call follows comments from the Minister for Sustainable Economic Development, Deputy Gerald Voisin, who has raised questions about the economic consequences of Jersey’s minimum wage policy.

Jersey’s minimum wage has increased from £8.32 an hour in 2020 to £13.59 today, a rise of more than 63 per cent. Chamber said it wants the review to examine whether the pace and method of these increases have affected employment, working hours, prices, business investment and the Island’s competitiveness.

Eliot Lincoln (pictured), President of the Jersey Chamber of Commerce, said: “Businesses want their employees to be properly rewarded and able to enjoy a good standard of living. However, good intentions must be matched by good economic outcomes.

“The Minister is right to ask whether a single statutory wage, increased rapidly and applied across almost every sector and type of employment, is still the best way to achieve that objective.

“This is not an argument for reducing existing salaries. In most cases, current contractual pay could not simply be cut without the agreement of the employee. It is about creating greater flexibility for future recruitment, additional hours, second jobs, seasonal work, training opportunities and roles which might otherwise never be created.”

Chamber said a more flexible approach could help businesses offer additional hours, support seasonal industries and make it easier for young people and those returning to work to secure employment. It also argued that it could give employers more scope to invest in training, technology and productivity, while reducing pressure to increase prices to absorb higher labour costs.

Mr Lincoln continued: “Jersey businesses compete with companies in the UK, France and further afield. They cannot continually absorb rising employment costs without consequences. Those consequences may appear through higher prices, fewer jobs, reduced hours, less investment or, ultimately, business closures. Our members are experiencing all of these consequences on a regular basis.

“For our smaller businesses, which make up the overwhelming majority of Jersey’s economy, the margin available for investment is often very limited. Every additional cost must come from somewhere.

“A more responsive wage setting system would give businesses greater flexibility and improve Jersey’s competitiveness, without significantly changing the pay received by most existing employees. In Jersey’s tight labour market, employers will still need to offer attractive wages if they want to recruit and retain good people.”

Chamber pointed to Austria, Denmark and Sweden, which do not operate a single national statutory minimum wage, and Norway, where statutory minimum rates apply only in certain sectors. In those countries, pay is largely determined through collective agreements and negotiation between employers and employees.

It acknowledged, however, that those systems are supported by strong collective bargaining arrangements and could not simply be replicated in Jersey without considering how employee protections would be maintained.

Chamber is now calling for an independent, evidence-led review of Jersey’s approach to minimum wage setting.

Mr Lincoln concluded: “Fair pay and a successful economy are not competing ambitions. We need both.

“The Minister has opened an important debate which should not be closed down by slogans or assumptions. Chamber would welcome the opportunity to work with Government, employee representatives and businesses to develop a model which protects Islanders while allowing employers to create jobs, offer more hours, invest and remain competitive.”