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Living Wage "overstated" since it was first measured

Government admits rate has been "miscalculated"

Government's admitted it's been miscalculating the Island's Living Wage since it began measuring it five years ago.

It means the hourly rate for 2017, 2019 and 2020 were all overstated by 80 pence, and last year an additional error meant it was overstated by £1.24.

The Living Wage wasn't calculated for 2018.

It's is a voluntary rate that organisations can choose to pay, while the Minimum Wage is legally enforceable.

The error was picked up after a programme of "improved quality assurance procedures" were introduced, and identified miscalculations in previous Manx Living Wage rates. 

The method used to reach the figure has now been corrected and externally validated by the Centre for Social Policy Research at Loughborough University.

The Manx Living Wage for previous years should have been:

• 2021: £9.63, rather than £10.87

• 2020: £9.38, rather than £10.19

• 2019: £8.93, rather than £9.76

• 2017: £7.81, rather than £8.61.

This year's rate has been calculated having fixed the issue, and will rise by 18 pence to £11.05 an hour.

The calculation reflects a weekly wage, before tax, of £414.38 and an annual salary of £21,547.50 based on the assumption of working 37.5 hours per week.

However, the figure was reached using data taken before the cost of living began to rise.

Dr Alex Allinson is the treasury minister and admits theses issues mean this year’s rate has not gone up by as much as people may have expected:

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