Minimum wage: getting the balance right

A virtual town hall meeting was held on Wednesday 30th August to give people a better insight into the issues facing the committee tasked with assessing whether Cayman’s minimum wage of CI$6 was sufficient to meet today’s cost of living.

Lemuel Hurlston, Chairperson of the committee, established earlier this year, said they had met more than 30 times already to further understanding of whether the current CI$6 minimum wage needed to be adjusted.

Mr Hurlston said they had reached out to many different stakeholders and workers and confirmed they had not met anyone so far who had not agreed that it was overdue for a review.

Now involved in the public consultation phase of their investigations, he said this was the public’s opportunity to pass their opinions on to the committee.

Subcommittee Chair Mahreen Nabi, along with colleagues Shomari Scott, Catherine Welds, Phil Jackson, and Taneesha Williams, was responsible for research and methodology and was providing the committee with information and feedback from the surveys and research that have been conducted.

Ms Nabi said they had been working closely with the Economics and Statistics Office so that when they reached out to the public, they would get the most widespread, transparent, and comprehensive data in terms of public opinion as to what the minimum wage should be.

The subcommittee had undertaken five surveys targeting different groups to ensure they received the most widespread information. They have also held in-person town hall meetings and conducted social media campaigns. Ms Nabi said more than 5,000 people had responded to their surveys with 60% of those being Caymanian.

“The vast majority who were surveyed agreed the minimum wage needed to be increased,” she stated.

An organisational stakeholder survey focused on entities such as major employers with the lowest paid workers, while a focus group with young Caymanians looking to train/upskill was also conducted.

Young Caymanians, she said, believed that the minimum wage ought to be increased but worried as to where the burden of paying for them would fall, i.e., on them via increased grocery prices and rent. They expressed they were already finding difficulties getting independent financing and housing options. Young people felt while a minimum wage was important, a clear path to increasing that wage through hard work and consistent performance was just as important.

From the information collated, Ms Nabi revealed the key objectives for the change in minimum wage were an increase pay for lowest paid workers, a decrease in the exploitation of those paid less than a fair value for their efforts and allowing Caymanian workers to meet basic minimum needs. It needed to be determined by contemplating the cost of living, a business/household’s ability to pay without adverse effects, the work load of employees and their skill level and experience.

Committee member Ralston Henry from the ESO said that, according to its research, the absolute minimum that a person needed per hour to live in the Cayman Islands was CI$6.44 so they had proposed to the committee that any minimum wage must be above this.

They also looked at the ceiling that should be considered to protect industry to see what would be a stress point that would detrimentally impact industry.

“The range then gives the committee a quantative idea as to how to balance both spectrum,” he said.

In addition, as a committee they had had to grapple with the understanding of the core difference between a minimum wage and a living wage.

The ESO’s focus would now be on looking at the impact different minimum wage proposals would have on the economy, i.e., how it would impact inflation, lay-offs, output, and the most vulnerable businesses.

“We shall continue to work with the committee to ensure that the fabric of the economy is protected as we come up with the best possible minimum wage,” he said.

Committee member Shomari Scott, the Chamber of Commerce’s President, said they had 525 members with 18,000 employees and they strongly urged the government to conduct an economic analysis to valuate the impact of any increase in minimum wage. They wanted to see the impact on the CPI, inflation and so on, as well as understand how the enforcement of such a minimum wage would happen.

Mr Scott said it was an emotive topic with arguments for and against a minimum wage.

A minimum wage would help provide low paid people with disposable income and an increase in basic wages for unskilled jobs might offer enticement for Caymanians who might otherwise continue to search for other categories of employment while remaining unemployed, he said.

The counter argument to increasing the minimum wage was the Chamber recognised it would be met with some opposition by Caymanian-owned small businesses, particularly as the people most affected by the change would be work permit holders.

Shomari said whatever changes are made should be based upon science and data.