Minimum wage rise needed ‘as prices getting high’
Catherine NicollIsle of Man
BBC
Hassan Ali Tipu said a proposed 9.9% minimum wage increase would be welcomed by workers facing rising costs themselves
Workers on the Isle of Man have said they would like to a see a proposed 9.9% increase in the Manx minimum wage “because everything is getting expensive and out of reach”.
Tynwald will be asked to approve the increase from £12.25 an hour to £13.46 when it sits this week, despite the Minimum Wage Committee refusing to back the hike over fears about the impact on businesses.
Fast food restaurant worker Hassan Ali Tipu said it would “help us with our utilities because prices are getting high, it would help us in our daily life to meet our goal”.
But coffeeshop worker Matlide Liso said she worried it was “an excuse to rise everything around it”.
The 9.9% rise is based on 66% of the median earnings recorded in the Isle of Man Earnings Survey Report 2025.
That basis for calculating the rise was agreed by Tynwald members earlier this year as an alternative to a previous pledge to bring the minimum and living wage rates together by 2026.
The Minimum Wage Committee’s decision follows the Isle of Man Chamber of Commerce warning that the proposal posed “a serious risk of more business closures and job losses”.
Matilde Liso said the wage rise could be absorbed by price rises to pay for it
Ms Liso said with property prices as they were on the island, to allow people to afford a mortgage “you need a proper minimum wage”.
Although she said the increase would be beneficial to herself, she said it would “not be ideal” for companies with a higher head count.
“A lot of small environments would have to shut down because of this increase,” she added.
But she said if the rise in the cost of living continued alongside the wage increase it would cancel out the benefit to employees.
“That’s my worry, there’s no point if everything is just going to keep rising, otherwise it’s just a little treat you give to us and we’re still going to struggle anyway,” she said.
“You need to stop the housing market, the living costs, the bills and everything else around wages going up as well.”
Ian (right) and Jonathan Corlett said the percentage rise was too high for many businesses to absorb
Mr Tipu said the proposed rise would be “quite helpful for everybody because everything is getting expensive”.
But he said the increased cost to employers would inevitably have to be passed on in the “cost in the prices on the menu”.
He said: “The costs of the business are increasing every month and the prices haven’t gone up in the past two years.
“But we really appreciate that they [the government] are supporting us because everything is getting expensive, it’s going out of reach.”
‘Stupidly high’
Cafe owners Ian and Jonathan Corlett said the size of the proposed rise was something that would “certainly put people into problems”.
Ian Corlett said: “It’s a stupidly high amount as a percentage, it’s too high for any of us small businesses because we don’t have the ability to absorb that sort of overhead overnight.”
He said it “remains to be seen” what affect it would have on their business “because we can do more hours ourselves theoretically, which reduces the need to pay people”.
Jonathan Corlett said basing the rise on the median earnings “makes no sense” when it included public sector earnings, which were higher than those paid to many in the private sector.
“Government being the largest employer on the island skews that average quite a lot,” he said.
“And if you’re basing it off a median percentage that median is going to go up as the minimum wage goes up, meaning it will just go higher and higher, and it’s going to end up well above inflation and well above the cost of living.”
He said while “that’s not a bad thing in itself”, the government “needs to start reducing the cost of living and not just increasing wages”.
The Minimum Wage Committee said the size of the rise would be “unsustainable for a cross section of low paying employers”, and could lead to fewer hours being available to staff, especially to disabled workers.
Its letter to the enterprise minister said it would also be “likely to have a negative effect upon inflation than a positive effect”.
However, the committee said it welcomed the break away from aligning the minimum wage with the living wage, and recommended “further finessing of the policy application to further help business, and support jobs”.
