Minimum wage rise 'represents a national crisis'

The potential consequences of a forthcoming 9.9% rise in the Isle of Man's minimum wage represent a "national crisis", a business forum has said.

The planned rise, approved by politicians in October and due to take effect in April, would see the hourly rate increase from £12.25 to £13.46.

The Isle of Man Chamber of Commerce, which represents the interests of more than 450 businesses, has penned an open letter to the government and Tynwald calling for an urgent review.

The lobby group said an interim rise in line with the island's inflation would be more sustainable for employers and employees alike, and adopting a more UK-inspired approach in future would be more "stable".

Since being proposed, the 9.9% rise has divided opinion on the island.

Some workers agreed it was needed to combat rising prices, but employers in warned it could lead to reduced staff hours or the increase being passed on to customers in some sectors.

The latest planned rise in the minimum wage on the island follows a previous hike in February 2025 - where the rate was raised to £12.25.

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.

In its letter the business lobby group said the rise would mean job losses and business closures and reducing April's rise to one in line with inflation "would be in the best interests of businesses and the economy".

President Claire Watterson said the chamber recognised "the importance of fair wages and a sustainable labour market" and supported the "long-term principle" of the agreed calculation.

However, she said the basis for calculating the increase could only work if based on the "private sector median" alone.

She warned - if the increase goes ahead as planned in April - lower paid workers could see themselves "losing their jobs".

"The challenge now is to set a wage rate that protects the livelihoods of employees while keeping businesses open," she added.

Last month saw a call to lower the island's minimum wage to that of the UK's and provide tax credits for the lowest paid workers rejected by the treasury minister.

A newly-formed pressure group, the Local Economy Forum, also branded the wage increase "illogical" and argued the government was "crushing our businesses under an unaffordable minimum wage increase".

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