Minimum wage rises affecting entry-level roles

Companies say increases to the minimum wage are making it harder to recruit for entry-level jobs as it was becoming "increasingly difficult to justify creating roles for inexperienced workers", a survey has found.

The Jersey Chamber of Commerce employer survey was put to businesses in hospitality, retail, construction, professional services, financial services, agriculture, care and transport.

It revealed a "growing concern" over the impact of the minimum wage increases on business sustainability, recruitment and employment opportunities for young people.

At the start of September, Economic Development Minister Gerald Voisin said the current £13.59 per hour was too high for some sectors.

The Chamber of Commerce said the results showed a "broad support" for the principle of a minimum wage and fair pay - but employers were concerned by the pace of recent increases and the impact on labour-intensive sectors and smaller businesses.

Chamber president Eliot Lincoln said there was "growing concern about whether the current approach is achieving the right balance between increasing earnings and sustaining employment opportunities", and highlighted the impact on "young people entering the workforce".

"Businesses are telling us that opportunities for apprenticeships, traineeships, student employment and first jobs are becoming increasingly difficult to maintain," he said.

The survey found concerns the current set up could "unintentionally reduce opportunities for younger people to gain valuable workplace experience and develop the skills needed to progress into long-term employment".

The chamber said employers were concerned about pay progression issues - where the gap between entry-level and experienced employees continued "to narrow".

Lincoln said the real cost of minimum wage increases were extending "beyond the minimum wage itself".

"Many employers are facing significant pressure throughout their pay structures as they seek to maintain appropriate differentials between new starters and experienced staff," he said.

The chamber said a "strong majority" of respondents expressed support for an independent review of Jersey's minimum wage framework.

It also said a "substantial support" would be given for the introduction of specific rates or arrangements for apprentices, trainees and young people in education.

Lincoln said: "Chamber believes there is a strong case for an independent, evidence-based review that examines both the benefits and unintended consequences of the current system.

"Any future approach should support fair pay whilst also protecting jobs, investment, training opportunities and Jersey's long-term economic competitiveness."

The chamber said following the survey it would work with the government, the Employment Forum, industry representatives and other stakeholders to make sure "the experiences of employers are fully considered as future minimum wage decisions are debated".

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