Construction Isle of Man warns that a 10% increase will result in “unavoidable consequences” within the construction industry.
It has sent a letter to Tynwald members expressing concerns of the sector-wide implications the minimum wage increase will have.
In recent months, members of Construction Isle of Man have expressed growing concern regarding the scale and pace of the forthcoming minimum wage increase.
As well as the broader employment cost pressures now facing the industry.
Cost Impacts
It believes the value gap will become harder for employers to justify and risks reducing graduate recruitment and further weakens the island’s professional skills pipeline.
It raised concerns on apprenticeships, highlighting an issue in recent weeks whereby an employer may have to release a third-year apprentice who, on turning 19, became too costly to retain.
The wage cascade is problematic for construction firms, many of which are already grappling with rising material costs, higher utility and shipping costs, ongoing skills shortages, and the constraints of fixed-price or pre-agreed contracts.
For some companies, the combined impact of these pressures risks undermining their financial viability.
Possible Alternatives
Construction Isle of Man has suggested three positive alternatives for government to take into consideration.
It has suggested a reform of the personal allowance, adoption of a tiered wage structure or introduction of a dedicated trainee wage.
Raising the income tax threshold would directly support low-paid workers without creating inflationary wage pressure across the economy.
It urges Tynwald to develop a long-term wage framework that protects workers while sustaining employer viability and supporting the island’s economic resilience.
Construction Isle of Man’s open letter to Tynwald members can be read below:
