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Increase in Minimum Wage 9 June 2008

DTI Minister David Cretney will be asking Tynwald to support an increase in the rate of the minimum wage on the Isle of Man at the sitting of the Court on June 17th 2008. The proposed increase will be from £5.60 per hour to £6 per hour, a 7.1% increase, and, if approved, will come into effect on October 1st this year.

The increase proposed by the Minimum Wage Committee was to £5.85 and the Minister is very grateful for their comprehensive report on the issue. At the time the Committee proposed the increase the rate of inflation was 4.1% and by April 2008 had risen to 4.9%.

DTI Minister David Cretney stated that the rising costs of food and energy impact most on those on low incomes and with the increases in inflation since the report this justified his Department’s proposed higher rate which has been agreed by Treasury and Council of Ministers.

The rate for 16 years olds remains at £4.67 per hour and £5.24 per hour for 17 year olds and certain trainees. In the UK the rate for 16 and 17 year olds will increase from £3.40 to £3.53 in October 20008. The UK rate for those aged 18 to 21 will be increased from £4.60 to £4.77 in October.

The June 2007 earnings data analysed by Treasury shows that roughly 4.8% of the Isle of Man workforce earned below £6 per hour, About 1,700 workers of the Island’s employed workforce of approximately 35,000 stand to benefit from the proposals.

The introduction of an adult rate of minimum wage of £6 per hour in October 2008 will mean that the rate will have increased by 46% since 2002, compared with an inflation rate of 26% over that period.

The Minister concluded by stating that this shows that that the minimum wage legislation continues to achieve its objective of substantially improving the real earnings of the lower paid workers on the Island and promoting an inclusive society in which all people benefit form our success, hard work and initiative.

June 2008

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