Chief Minister Allan Bell has expressed concern that a large number of jobs being created are low paid.
He made the comments as two sets of figures – on employment and earnings – were released, showing the Manx economy was performing well and sectors that had been struggling, such as construction, were seeing a turn around in their fortunes.
Average full-time earnings in the island increased by 0.7 per cent last year, according to statistics in the government’s latest annual earnings survey.
The survey provides a snapshot of earnings between June 2013 and June 2014 based on a random sample of 1,000 full-time employees drawn from income tax records.
It shows average gross weekly pay was £624, taking into account overtime, shift premiums and bonus payments. Average earnings were the same as in the UK.
But 10 per cent of people earned less than £315 per week in gross pay, while 10 per cent earned more than £1,114.
Mr Bell said: ‘My concern is the large number of new jobs tend to be low paid. We need to be aware of that – we need to avoid the Isle of Man being promoted as a low-wage economy.’
In January, the Manx Independent revealed that the bottom quarter of households in the island had an average weekly expenditure of £354 per week. But that their disposable income, after income tax and National Insurance, was just £341.
That means that a huge number of households cannot make ends meet.
The Chief Minister said he was not aware of zero hours contracts being used widely in the island.
Mr Bell added: ‘I recognise that the survey findings will provide little comfort to people earning much less than the average figure.
‘Some areas of the local economy have struggled in recent years and the nature of employment is also changing, with more job growth at lower pay levels.’
He expressed his hope that modest wage rises, together with falls in inflation and unemployment, will start to increase household spending power. Proposals were announced in this year’s Budget to lift more than 10,000 low-paid people out of the tax net.
Mr Bell said: ‘I am conscious of the fact that Manx Utilities has announced an increase in its tariffs that will add about £2 a month to the average consumer’s electricity bill. However, with the recent drop in oil prices and continued low inflation, I am cautiously optimistic the pressure on family incomes will start to ease.
‘This in turn should support spending in the local economy, in particular the retail and catering sectors who have found it difficult in recent years.’
At the end of last month, there were 930 registered as unemployed, the lowest February unemployment figure for four years.
This is a drop of 43 on January and a drop of 216 on this time last year. The unemployment rate is 2.1 per cent.
The biggest drop in unemployment, down 23, is in construction which is a sector that has struggled in recent years.
Mr Bell said the figures showed the resilience and the strength of the Manx economy, adding: ‘It would appear there’s an upturn right across all sectors.’
The average man in the island earns £663 a week. The UK equivalent is £673. Women here earn more – £572 here, compared with £539 there.
But, median wages, which remove the distorting effects at the upper and lower end of the scales, show that men earned £563 (£577 in the UK) and women £528 (£462, UK).
The earnings survey also shows a difference between the average levels of pay and hours worked in the private and public sectors.
Manual: Private £450; public £520. Hours worked: private 42, public 39.
Non manual: Private £596. Hours worked: Private 39; public 37.