THE PRICE OF PROGRESS: RE-FRAMING CAYMAN’S EMPLOYMENT AND POPULATION DEBATE

There’s been a flurry of debate surrounding the demographic and dynamics of Cayman’s population based on recent employment statistics, particularly work permits.

 It’s a necessary debate to have but care must be taken that figures are not taken out of context.

In August last year when the 2021 Census of Population and Housing Report was published, the number of persons in the working-age population was recorded at 57,360, of which the labour force was 47,120.

The Census report showed that the labour force participation rate for Caymanians was 73.2 per cent compared to 91.4 per cent for non-Caymanians.

It also detailed that employment among Caymanians totalled 19,494 or 43.9 per cent of the total, while non-Caymanians were counted at 24,947 or 56.1 per cent.

Fast forward six months to January 2023 and it’s now reported that there are over 34,000 foreign workers registered in Cayman by the Department of Work Opportunities and Residency Cayman(WORC).

In absolute numbers that’s an increase of 9,129 - or almost 10,000 - or percentage terms, that’s over 40 per cent.

By all counts, it’s a staggering increase and should be of concern.

But what are these numbers really telling us?

NUMBERS REALLY COUNT

Crucially, Cayman does not have an illegal immigration problem anywhere near the scale of what some other countries and territories are grappling with. In fact, it’s fair to say that our immigration controls are quite robust…and fair. Importantly, foreign workers are here by invitation to fill vacancies in the job market.

And while there will always be scrutiny and questions, rightfully so, about the work permit policies of governments through the years and prioritising Caymanians in the job market, one thing remains crystal clear. That is the law of supply and demand.

By all accounts, Cayman’s economy is rebounding in the aftermath of the COVID-19 pandemic, outperforming many other economies regionally and globally. Given the nature of our service economy, there is a tremendous demand for workers to fill roles in tourism, construction, finance, ancillary services, government and other sectors of the economy.

DEMAND AND SUPPLY

During the economic slowdown much was said and much effort was put into training and upskilling Caymanians for new opportunities in the job market.

We anxiously await the latest updated employment statistics from the Economics and Statistics Office. (The current figure of 5.7% as of Oct 2021 scrolling on its website is woefully out of date).

Commenting on the  2021 Census Report, Hon. Deputy Premier and Minister for Labour and Finance, Chris Saunders, had said: “ Our goal is to get as many of our people trained, developed and moved into the workforce, so the number is trending in the right direction.”

This brings us back to the question “To what degree has the lucrative ‘work permit economy’ distorted the Cayman job market?

There’s no question that work permit fees have been a stable revenue source for Cayman governments down through the years.

One expert quite knowledgeable of business trends and government policies in Cayman, offered us this masterclass perspective:

“The realities are this; we are a service-based economy. 95% tertiary to be exact. Our primary and secondary industries are roughly 5%. We don’t have mining. We don’t have manufacturing. To slow the economy means to slow down job creation.

“I will then ask the question...what area do we want to slow down: Financial services? Tourism? Construction? The reality is that with all the interest rate hikes construction will be slowed down. It will be more difficult to get loans to buy properties thus reducing demand, thus reducing supply, thus reducing jobs in that sector.

“In short,” our expert said, “the market will correct itself.”

Looking at the work permit debate, it was further pointed out that instead, attention needs to be focused not just on the number of foreign workers or work permits, but more importantly on how many of the work permits are temporary and what sectors they are issued for.

“The real question to ask is this: How many of those permits are in the ‘supply sector’ and how many are in the ‘demand sector’? That’s really where the rubber meets the road,” our expert concluded.

It’s indeed a welcome move in the right direction that WORC is now making it a requirement that temporary vacancies must first be advertised for 14 days before a request for a work permit is submitted.

That allows for greater opportunities for Caymanian job seekers and is a further step towards further levelling the playing field which, admittedly, is somewhat uneven in some parts of the economy.

THE PRICE OF PROGRESS

Another aspect that cannot be overlooked is how ‘demand for Cayman’ impacts what’s known in economic circles as a country’s carrying capacity.

It raises the question of the size of the economy, the rate of growth, and Cayman’s own ability to service this growing, in-demand, labour-hungry economic juggernaut.

More people needed to service the demands of the economy in turn means more people to be supported by the economy.

This impacts infrastructure, the road network, traffic congestion, the provision of healthcare, education and social services along with public safety and security.

It also requires an honest debate about Cayman’s population projection and its carrying capacity.