Minimum Wage Advisory Committee holds Virtual Town Hall meeting
The Minimum Wage Advisory Committee (MWAC) held a Virtual Town Hall meeting in late August to provide an update on their work and to receive public feedback. Committee representatives included Lemuel Hurlston, who is the Chair, Shomari Scott, Immediate Past President and Chamber representative, Catherine Welds, an independent employee representative, Mahreen Nabi, representing the Business and Professional Women’s Club, and Ralston Henry representing the Economics and Statistics Office.
The MWAC has held more than 30 meetings since convening in January this year and has entered the public consultation phase prior to the submitting of their final report and recommendations to Cabinet in October.
The committee has tried to determine if there was sufficient justification in the economy to raise the minimum wage, which was set at six dollars an hour, seven and a half years ago. Each panelist explained their contribution to the MWAC.
“When we first heard there was going to be a minimum wage discussion back in 2022, we started surveying our membership, and having discussions with the members of our Executive Committee and others that represent stakeholders throughout the business community as well as receiving submissions from different focus groups,’’ Mr. Scott said.
Based on the member feedback received, a position paper was produced, which urged the Government to conduct an economic analysis to evaluate the impact of any minimum wage increase on each stakeholder but especially on Caymanians and residents. The analysis should include the likely effect on inflation and other economic indicators and contain a detailed description of enforcement strategies and resources, which Mr. Scott said would be vital in moving forward with any change. The analysis would also include input from the Ministry of Labour & Pensions, WORC, and the Economics and Statistics office which would show beyond reasonable doubt that the long – term benefits of a minimum wage increase would outweigh its associated costs and risks.
“Increasing the level of wages offered for unskilled jobs increases the attractiveness of such jobs to Caymanians who may otherwise continue to search for other categories of employment while remaining unemployed,’” Mr. Scott said, “and that’s an important point because one of the mandates was to see at what point we could incentivize more Caymanians to take up certain jobs at certain levels. Which would help to reduce the need for imported labour.”
“Adjustment of minimum wage will be met with some opposition, especially when you look at Caymanian-owned micro- and small businesses still reeling from the impacts of the pandemic,” he said.
“Since its anticipated that most workers who are likely to benefit for the adjustment of the minimum wage are work permit holders, the policy would disproportionately benefit non-Caymanians, but the likely downsides of increasing prices and goods and services, especially if the increase is significant, would affect all residents equally. This is exacerbated by the common knowledge that many work permit holders regularly repatriate funds overseas, so the additional wages may not benefit the local economy.”
In conclusion, Mr. Scott said, the Chamber of Commerce supported an adjustment of minimum wage while urging the government to evaluate the economic impacts to ensure that the adjustment does not contribute to an increase in the cost of living. Additionally, Mr. Scott said, the Chamber supported concurrent discussions on how we reduce the cost of various items, and what the Government can change to control and reduce its operating expenses, while focusing on improving education to ensure that we prepare Caymanians to move into the higher paying roles and reduce the stigmas which exist for certain jobs which are also well-paid.
Other observations made during the panel presentations and the questions that were emailed from members of the public were that “Many employers would benefit from a staggered approach to increases.” There was also discussion about how payment schemes involving gratuities fitted in, and exactly how gratuities were to be recorded in the employee’s pay stub – an important consideration when applying for a bank loan or mortgage.
Countering the idea that a rise in the minimum wage wouldn’t affect Caymanians, Ms. Welds said statistics showed, of the 3760 people at or below the minimum wage, 25% or between 800 and 900 were Caymanians, “So its not just benefitting work permit holders.”
Mr. Henry also highlighted the “ripple effect,” of increasing the minimum wage, which meant that, to maintain the pay differential between a worker and their supervisor, an increase in the minimum would move up to the supervisor, too – a scenario which would also lead to benefits for Caymanians.