The Poverty Committee has raised concerns about how housing costs are factored into the island’s living wage calculation.
Members questioned whether assumptions based on UK models accurately reflect local realities.
Dr Kelvin Corlett, Head of Statistics Isle of Man, explained that the living wage methodology used on the Isle of Man is adapted from the UK’s approach.
However, the assumption that families with children reside in social housing was met with scrutiny.
He said: “It’s less an assumption and more a case of what has been reported in the UK as desirable for that family type.”
Rental
Members of the committee, chaired by Juan Watterson SHK, highlighted the difference between public sector rents on the Isle of Man being lower, by around 40%, than private rentals and whether this distorts the living wage figure.
Dr Corlett said: “Whether you declare it as a distortion or not is a matter of perspective… The living wage is to be viewed as an ideal rather than a direct measure of what people actually earn and pay.”
He further explained that the model assumes “adequate and near-universal provision of social housing for families,” but admitted that this may not reflect the current housing market.
When asked if local validation of the housing cost model had been carried out, he confirmed and said: “No, we don’t, because it’s not about what is happening but about what should happen according to the methodology.”
Poverty
The committee also heard that the government is working to adopt the Social Metrics Commission’s model for measuring poverty, but significant challenges remain.
Dr Corlett said: “We are starting that work with a review of how close it is possible to match the Social Metrics Commission’s metric measure.
However, he warned of limitations, adding: “We have no analog of that HMRC survey, so we can’t quite do that, which might affect the accuracy of the figure.”
Another major obstacle is survey response rates, which have dropped from 40% to just 4% over the last three decades.
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