Cayman’s Minimum wage – what should it be?
It’s been more than seven years since the government set Cayman’s minimum wage at CI$6.00 per hour. The cost of living has risen significantly since then, and the Government has established a Minimum Wage Advisory Committee to determine if the rate should be raised, and by how much. A major question with any wage increase is what impact it will have on prices that consumers must pay in stores and for services. The Chamber reached out to members through surveys, focus groups plus, recently through phone calls to gather your views on this important matter.
A rise is most of all going to affect those businesses employing a large proportion of low skilled or entry level type positions most, as well as those where the chief component of the price is the cost of labor such grocery stores, security, and janitorial businesses for example. Other businesses using skilled trades people like electrical, building contractors or air conditioning installation and service, are already paying well above the minimum wage and so are unlikely to be directly affected, and larger supermarkets are already paying their workers substantially more than the minimum, but smaller stores will struggle if the increase is too big. The owner of one small supermarket said that although they already pay their workers over the minimum, a rise to between 9 and 10 dollars would be too much and would push prices up. Likewise, a small janitorial business said that, while they believed the minimum should go up by a couple of dollars, any rise above that would mean they would have to put up prices, as well as lose staff.
Another owner of a medium-sized janitorial business was adamant that an increase could only benefit work permit holders, simply because Caymanians are not attracted to these kinds of jobs in the first place. Attracting Caymanians to these positions by offering them more led to very little success. “The only change that will occur is the increase of the already high cost of living,” the business owner said. “We will experience price increases in building services, food & beverage, hospitality and the retail industries.’’
If that’s true, then it means that one of the biggest arguments for raising the minimum – that it will boost the economy by increasing the disposable income – doesn’t work properly. That’s because many guest workers who come here typically send surplus money home to their families.
If an increase does not directly affect Caymanians, could it still help them indirectly?
Possibly. Raising the bottom level of wages might mean the next level up has to rise too, to stay attractive. Also, it might mean school leavers and those with little qualifications or experience may still find entry level jobs – which give them that all important first step up the ladder.
But it might help in other, less tangible ways. By reducing the disparity between the lowest paid guest worker and the kind of jobs that Caymanians may seek, we are reducing our dependence on an unfair, two-tier labour system that fragments our communities and compromises the fabric of our culture.
But the rise cannot be too much. Increased cost of labor coupled with increasing costs from interest rates health and property insurance rental costs, and electricity rates threaten the viability of some businesses – especially in the micro and small business sectors which represent most Chamber members. Based on our research, increasing the minimum wage to between CI$7.50 and CI$ 8.00 per hour was supported by most members contacted.
There are still many questions needing an answer. What about enforcement? It’s hard to be sure all businesses are playing by the rules. If some businesses don’t, they can undercut business from the ones who do, leading to good businesses getting penalized for doing the right thing, while unscrupulous ones thrive.
The Chamber would still like to hear from you. If you have views, or there are minimum wage issues you feel are particularly important to your business, please let us know.