The Jersey Chamber of Commerce has published the findings of a significant employer survey, revealing growing concern about the impact of recent minimum wage increases on business sustainability, recruitment and employment opportunities for young people.
Responses were received from employers across a wide range of sectors, including hospitality, retail, construction, professional services, financial services, agriculture, care and transport.
While the survey found broad support for the principle of a minimum wage and fair pay, employers expressed increasing concern about the pace of recent increases and their impact on labour-intensive sectors and smaller businesses.
One of the clearest messages emerging from the survey is the effect on entry-level employment opportunities. Employers reported reducing recruitment of students, school leavers, trainees and apprentices as rising wage costs make it increasingly difficult to justify creating roles for inexperienced workers.
Many respondents highlighted concerns that the current approach may unintentionally reduce opportunities for younger people to gain valuable workplace experience and develop the skills needed to progress into long-term employment.
Employers also raised concerns about the growing issue of pay compression, where the gap between entry-level and experienced employees continues to narrow. Businesses reported significant pressure to increase wages across their entire workforce to maintain appropriate pay differentials, resulting in labour cost increases far beyond the headline minimum wage rate.
The survey identified a range of actions businesses have taken in response to rising employment costs, including increasing prices, reducing profit margins, delaying investment, leaving vacancies unfilled, restructuring staffing arrangements and investing in automation and productivity improvements.
A strong majority of respondents expressed support for an independent review of Jersey’s minimum wage framework to assess both its benefits and potential unintended consequences. Employers indicated that such a review should consider the impact on employment, competitiveness, investment, productivity, living standards and opportunities for young people.
The survey also revealed substantial support for the introduction of specific rates or arrangements for apprentices, trainees and young people in education, with many businesses arguing that greater flexibility would help preserve important pathways into employment.
Chamber President Eliot Lincoln (pictured) said: “Employers support fair pay and recognise the importance of ensuring workers are properly rewarded for the work they do. However, the survey shows growing concern about whether the current approach is achieving the right balance between increasing earnings and sustaining employment opportunities.
“Perhaps the most striking finding is the impact on young people entering the workforce. Businesses are telling us that opportunities for apprenticeships, traineeships, student employment and first jobs are becoming increasingly difficult to maintain.
“We are also hearing that the real cost of minimum wage increases extends beyond the minimum wage itself. Many employers are facing significant pressure throughout their pay structures as they seek to maintain appropriate differentials between new starters and experienced staff.
“Chamber believes there is a strong case for an independent, evidence-based review that examines both the benefits and unintended consequences of the current system. Any future approach should support fair pay whilst also protecting jobs, investment, training opportunities and Jersey’s long-term economic competitiveness.”
