But Deputies Neil Inder; President of Economic Development, and Simon Vermeulen; also on the ED committee, want to keep any increases closer to the rate of inflation at the end of 2023, which stood at 5.5%.  

This would see the legal minimum for adult pay set at £11.25 per hour, and £10.15 for young people. 

But they have also offered deputies a second option in the event this fails, instead proposing a slightly higher minimum pay rate of £11.55 and £10.40, which would defer the ambition of aligning wages with 60% of average earnings by one extra year.  

This was the preference of Policy & Resources, which said the economy may benefit from a delay.  

Deputies Inder and Vermeulen said the amendment was warranted as industry has reported concerns with the larger increase, particularly in the retail sector, on top of existing pressures including increasing payments to the States.   

“The combined impact is a significant pressure on those employers with lower wage employees, which may impact the number of employment roles that they are able to offer, noting that increases in wages will amplify the cost of both social insurance contributions and pensions to the employer,” the pair said,. 

“These combined costs risk a continued upward pressure on retail prices, which may slow the transition of our economy back to more typical levels of inflation.” 

Pictured: Deputy Peter Roffey will ask deputies to support a 12% increase to the minimum wage later this week.

Employment & Social Security is likely to stand firm behind its proposed increases, but did acknowledge in its policy letter that there are risks to the economy if its approved.  

“An above-inflation increase in the minimum wage is not without some risk," it said.

"Typically, staff wages represent a significant share of the day-to-day operating costs of businesses. For those businesses which currently pay below the proposed new Adult Minimum Wage Rate, or which would seek to maintain the differential between the minimum wage and the hourly rate paid to their staff, an increase would represent an increase in costs." 

ESS noted that if businesses choose to pass on cost increase to customers it “could slow the fall of inflation rates, keeping RPIX above average levels for longer. This would in turn have an impact on future wage negotiations and, as such, any potential impacts on inflation could then persist”. 

But it said it “does not consider that the proposed rate is unduly burdensome on employers because, among other reasons, current workforce pressures have an impact on wage levels”. 

Policy & Resources wrote to ESS in June to comment on the proposed rises, agreeing with Economic Development that more data is required to inform plans and predict their effect on the economy, particularly the lack of numbers on how many people are paid the minimum wage. 

“It is anticipated that a fuller analysis might suggest the need to adopt a slower approach to increasing the minimum wage,” it said.  

The States will debate minimum wage in their next meeting which starts on 4 September. 

Pictured (top): Deputies Neil Inder and Simon Vermeulen.

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Minimum wage could rise again