13 May 2015
The Chief Minister has published a report setting out the conclusions of an investigation into living wage campaigns, and into the impact of the introduction of a living wage in Jersey.
Living wage rates are used in the UK and elsewhere. They are calculated by pressure groups who take into account the cost of living, taxes and the value of benefits available to working families on low incomes. The aim of the living wage rate is to make sure that, on average, a worker receiving the living wage rate, topped up by in-work benefits, is able to meet their basic living costs.
Conclusions
The report identifies two main conclusions:
- a voluntary living wage is unlikely to have a significant impact on most low-paid workers
- the minimum wage plus income support in Jersey already satisfies the requirement for a living wage, when compared with existing schemes.
The work was led by the Social Security Department, working closely with the Chief Minister’s department and the Economic Adviser. The report found that voluntary living wage campaigns have been relatively ineffective at addressing in-work poverty – for example, only 2% of low-paid employees in London have benefited from the adoption of the London living wage.
The Chief Minister, Senator Ian Gorst, said "The living wage report identifies the low take-up of the living wage among UK employers and it is unlikely that a local campaign would result in higher wages in sectors like retail and tourism.
"The best way to reduce poverty is to help people into work, to deliver earnings growth that is built on productivity increases and to constrain price rises so people have more money in their pockets. As a government these are the areas where we can make the most difference to hard-working, local families."
Comparisons with living wages
As part of the investigation, the calculations used by the London living wage campaign were applied to local prices and the income support available to working households. These showed that the existing minimum wage in Jersey is high enough to be used as a living wage. Comparisons with living wages used in other schemes produced similar results.
The Social Security Minister, Deputy Susie Pinel, said “The living wage report has highlighted the positive aspects of the Income Support system as it applies to working households. When a family claims the in-work benefits available in Jersey, the review has shown that a combination of the statutory minimum wage and income support meets the living wage requirements used in London.”
Household spending survey
The Statistics Unit has nearly finished gathering data for its Household Spending and Income Survey. This survey will give an accurate and up-to-date picture of the cost of living in Jersey and the range of household incomes.
The results are due to be published at the end of 2015 and will provide information on relative low income across all household groups.
Download Living Wage report (size 454Kb)
Download Living Wage report summary (size 127Kb)
Download Living Wage - economic impact assessment (size 67Kb)
gov.je