Economic Development Minister says minimum wage is 'strangling' Jersey's economy

The government minister responsible for Jersey's economy has signalled his opposition to the minimum wage.

In a letter to the Jersey Evening Post, Deputy Gerald Voisin says the current rate - of £13.59 per hour - is 'strangling the economy'.

The minister has written to the paper's letters page in response to a recent column which advocated scrapping the minimum wage.

Deputy Voisin's opinion piece, published in today's edition of the JEP (17 August), says the basic hourly pay has risen by 63% since 2020 - during which time he says Jersey has seen more people using foodbanks, rising inflation and fewer jobs in many sectors.

"I firmly believe that the level of the minimum wage is strangling our economy, it has turbocharged inflation, denied people second jobs or additional working hours to support their families and is starving businesses of investment."

Deputy Voisin, who owns the St Helier department store Voisins, says businesses facing higher labour costs respond by reducing employment, raising prices or reduced profit - all of which he suggests are bad news for all of us.

"Reducing employment leaves people without jobs or reduces hours worked, it is for this reason that in some cases a higher minimum wage actually reduces people’s earnings.

"Increasing prices further pushes up inflation, which makes the cost-of-living problem worse for everyone and creates a wage/price spiral, which makes our economy less competitive and erodes any increase in earnings that may have been achieved.

Finally, reduced profits for businesses may sound harmless, but remember that 86% of Jersey businesses are very small, a reduction in profit will reduce or remove entirely the capital available to reinvest in the business to improve products, services or efficiency.

"A lack of investment is the death knell for a business and if this continues for too long then it is likely that it will fail, making employees redundant who then become the responsibility of the States to support."

The minister concludes his letter by suggesting Jersey takes inspiration from Austria and Scandinavian countries, where there are no minimum wage laws.

"... all have better performing economies than the UK and better rates of productivity.

Channel 103 approached Deputy Voisin for interview but was told he is currently on annual leave.

The column that prompted his letter to the JEP was written by Douglas Kruger, a member of the Value Jersey movement.  Deputy Voisin, who was elected in St Helier North in June's general election, endorsed the group. As did the now Assistant Social Security Minister Deputy Phil Romeril.

It is for the Social Security Minister - Senator Elaine Millar - to propose changes to Jersey's minimum wage policy, guided by the recommendations of the independent Jersey Employment Forum.

Channel 103 has approached the Social Security Minister for comment.  She is also on leave.