The lowest paid are to get a substantial increase in their real earnings.
Tynwald this week unanimously approved significant rises in the minimum wage, taking the rate for those aged 21 and over from £6.65 to £7 an hour from January 1.
The rate for those aged 18 to 20 will also rise from £6.40 to £6.65, while minimum pay for 16 and 17-year-olds, which has not been reviewed since 2007, will go up to £5.40 an hour.
Economic Development Minister Laurence Skelly MHK told Tynwald that the main rate was rising by 5.3 per cent when inflation at the end of October, as measured by the consumer price index, was -0.8 per cent.
Together with last year’s increase of 3.9 per cent, this was a ‘substantial increase in the real earnings of the lowest paid in our community,’ he said.
Mr Skelly said the move, that follows recommendation from the minimum wage committee, struck the right balance between the need to grow the economy and to protect the vulnerable.
He added: ‘Work should pay. There is dignity in work. I believe it is important that people who work hard should be able to maintain a decent standard of living as a result of their labours.’
He said he was satisfied that the new rates while higher than most comparable jurisdictions, were not markedly out of step and so would not harm the economy or jeopardise job creation.
Bishop Robert Paterson urged the government to work towards a living wage, pointing out the increases in the minimum wage amounted to 25p and 35p and the cost of living in the island is high particularly for low paid workers.
The Minister said the introduction of a living wage, following developments the UK, would be a ‘major step’ and one that requires careful consideration including broad consultation.