Isle of Man News - POSTED Thu 26-10-2017

Chamber of Commerce business survey reveals concerns over living wage plans

by LC

Chamber of Commerce business survey reveals concerns over living wage plans

A majority of business leaders support the principle of introducing a living wage on the Island, but many have concerns that it’s not economically viable at the present time, and that it might damage the quality of life here. That’s the general view expressed in a survey conducted by Isle of Man Chamber of Commerce earlier this month (October).

A report by the Economic Affairs Division of the Cabinet Office proposes a living wage of £8.61 per hour, a rate which would be £1.11 more than the Island’s current minimum wage. Tynwald unanimously agreed to receive the report on October 17th.

The Chamber of Commerce, which is the Island’s biggest business network, conducted a survey of 69 businesses from nine sectors of the Island’s economy, and asked questions about the possible impact that a living wage might have. While 72% of companies support the principle of a living wage as a socially responsible policy, businesses in key employment sectors of the economy expressed concerns that it would have a negative impact if it was implemented right now. Only 3% of employers felt that implementing the proposed living wage would be positive for their business and its future prospects.

Some of the largest employers on Island that took part in the survey felt that their business would be negatively impacted if they had to implement an £8.61 per hour living wage without a corresponding increase in demand for their products and services. Businesses also expressed concern about substantial ‘on costs’ which need to be factored in due to erosion of pay differentials.

Chris Allen, President of Isle of Man Chamber of Commerce, said: “While the vast majority of business leaders support a future aspiration of a living wage at the proposed level, they also take the view that without substantial population growth in the short to medium term – and without better control of inflation which seems unlikely with Brexit driving commodity prices – it will not be economically viable to implement an £8.61 per hour living wage in key on-Island service sectors. Chamber feels that this is a very important consideration because these sectors contribute directly to the quality of life of all residents, and provide employment opportunities for many."

Here are some key stats from the survey:

• 70% of respondents employ less than 50 people, 22 employ 50 or more
• 72% of those who responded see a living wage as a socially responsible aspiration for our economy
• 55% of respondents would adopt it, 30% would not adopt it, and 15% answered ‘don’t know’
• Businesses taking part in the survey employ more than 4,000 workers who are currently earning £7.50 per hour (the current minimum wage), and more than 5,000 workers who are earning between £7.50 per hour and £8.61 per hour (the proposed voluntary living wage). Based on the 2016 Census, this represents around 22% of the current Isle of Man workforce
• Less than 3% of respondents across nine sectors of the economy see the introduction of a living wage, at the present time, as being positive for their business prospects.
• Only 6% see it as a positive move to attract trainees and apprentices in the future
• More than one third of respondents have a negative view about the proposed introduction of a living wage, – within the key employment sectors of hospitality, tourism and retail, 100% said that it would be damaging to their businesses  

Photo - Chris Allen.

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