Treasury Minister Dr Alex Allinson told Manx.News that as wages have gone up, it’s important that those on low pay aren’t just left alone.
Dr Allinson said: “I think it’s absolutely right that any worker who’s working hard gets the fruit of their labor, and so we I think it’s absolutely right that as wages increase across our community, those on low pay aren’t just left alone.”
“When the minimum wage was originally brought in the UK, the first minimum wage was £3.60 an hour. It’s gone up quite considerably, but it still hasn’t kept up with the overall increase in wealth and distribution of wealth on our island.”
Dr Allinson added: “I think by twinning it with median earnings, we will do that. I think it’s really important that people see their wages going up to keep track with inflation. In terms of taxation, both in terms of income tax, but also in terms of national insurance, it is very important that we have a balanced budget.”
The Treasury Minister advised those businesses that are struggling to reach out to the Department of Enterprise to discuss support available.
Catching up
The Treasury Minister acknowledged the ongoing challenges in stabilising the minimum wage, particularly due to the lack of increases during the COVID-19 pandemic.
He explained that this hiatus has created a need to “catch up” to bring the minimum wage closer to 66% of median earnings.
Dr Allinson recognised the concerns raised by business groups such as the Chamber of Commerce, noting that the Department for Enterprise is actively considering these viewpoints.
Speaking to Manx.News, he said: “I think we always understood that trying to get to a point where we had some stability in the minimum wage was going to be a struggle, particularly because the minimum wage didn’t increase during the covid period, and so there’s a degree of catching up to do to equate it with the median earnings.
“I think what chamber are doing, obviously, is reflecting some of the concerns of their members, and certainly I know that the department for enterprise are taking that on board. What we need to do is work with those various sectors, as I said, particularly in terms of those people who rely on low paid work.
“And there are, for instance, cleaning firms, certain retail, certain small hospitality sectors where this has a disproportionate effect on so it’s very important that we work with those people over this period, whilst we bring the minimum wage up to 66% of median earnings after that, what we’re probably looking at is a far more sensible and more gradual glide path as the economy grows, then minimum wage will grow, rather than some of the stepwise changes we’ve been seeing recently.”
