[Isle of Man] Tynwald backs new way to calculate minimum wage

In the Isle of Man, politicians have approved a proposal to base the nation's minimum wage on a percentage of median earnings instead of aligning it with the living wage, BBC News reports.

Tynwald debated a recently published review into the methodology of how the rate is set, and approved basing the figure on 66 per cent of median earnings.

This reportedly means that a previous resolution to align the minimum wage with the living wage will now be overhauled.

Under the change, the current hourly minimum wage rate of £12.25 increased to £13.46 in April, a slightly lower rate than the living wage which stands at £13.74.

At present, the UK’s minimum wage is £12.21 an hour.

Proposals from SHK Juan Watterson to calculate the rate based on minimum income standards instead were reportedly rejected. The rate had previously been set out in regulations made by the Department for Enterprise and Treasury after consulting with the Minimum Wage Committee.

Considerations that had been part of the rate-setting had included the effect on employment, inflation, competitiveness of businesses and the costs of industry. However concerns were raised that the new methodology would not link the rate with the cost of living for workers, and that earnings were more stagnant.

MHK Joney Faragher stated that the new method "risks leaving some people behind".

"It is about real people and whether someone can afford to live independently," she said.

Treasury Minister Alex Allinson said the new methodology would provide a "sense of certainty" for the minimum wage year-on-year for businesses.

SHK Watterson added that a greater proportion of high earners on the island could skew the minimum wage if it were based on a percentage of median wages; however, Enterprise Minister Tim Johnston said it would reflect higher living costs.

The minister stated that the approach would eliminate ongoing subjectivity while maintaining competitiveness for the island's workers and businesses.

The economic impact of previous plans to align the minimum wage with the living wage "could not be ignored," he said, and the change "strikes a balance" by offering a wage aligned with the broader working population while providing businesses with clarity.

Tynwald reportedly stated that a review into the policy would be conducted by the end of December.

Source: BBC News

(Link and quotes via original reporting)

In the Isle of Man, politicians have approved a proposal to base the nation's minimum wage on a percentage of median earnings instead of aligning it with the living wage, BBC News reports.

Tynwald debated a recently published review into the methodology of how the rate is set, and approved basing the figure on 66 per cent of median earnings.

This reportedly means that a previous resolution to align the minimum wage with the living wage will now be overhauled.

Under the change, the current hourly minimum wage rate of £12.25 increased to £13.46 in April, a slightly lower rate than the living wage which stands at £13.74.

At present, the UK’s minimum wage is £12.21 an hour.

Proposals from SHK Juan Watterson to calculate the rate based on minimum income standards instead were reportedly rejected. The rate had previously been set out in regulations made by the Department for Enterprise and Treasury after consulting with the Minimum Wage Committee.

Considerations that had been part of the rate-setting had included the effect on employment, inflation, competitiveness of businesses and the costs of industry. However concerns were raised that the new methodology would not link the rate with the cost of living for workers, and that earnings were more stagnant.

MHK Joney Faragher stated that the new method "risks leaving some people behind".

"It is about real people and whether someone can afford to live independently," she said.

Treasury Minister Alex Allinson said the new methodology would provide a "sense of certainty" for the minimum wage year-on-year for businesses.

SHK Watterson added that a greater proportion of high earners on the island could skew the minimum wage if it were based on a percentage of median wages; however, Enterprise Minister Tim Johnston said it would reflect higher living costs.

The minister stated that the approach would eliminate ongoing subjectivity while maintaining competitiveness for the island's workers and businesses.

The economic impact of previous plans to align the minimum wage with the living wage "could not be ignored," he said, and the change "strikes a balance" by offering a wage aligned with the broader working population while providing businesses with clarity.

Tynwald reportedly stated that a review into the policy would be conducted by the end of December.

Source: BBC News

(Link and quotes via original reporting)