Employment Minister Rolston Anglin said
Friday that he is not philosophically opposed to adopting a minimum wage in the
However, the minister said careful
consideration of the issue would be needed prior to the implementation of a
basic wage rate.
The Cayman Islands has no set basic
minimum wage for workers, although the Labour Law does allow for Cabinet to
create the base pay rate if it wishes following consultation with a committee
that has studied the issue. No government has ever chosen to set that rate.
“Where do I stand on a minimum wage? I’m
not opposed to a minimum wage,” Mr. Anglin said during an interview at his office
on Friday. “But I do want to ensure that the public is clear about what
a minimum wage means.”
The employment minister said he has done
extensive research on the issue since moving a motion in the Legislative
Assembly in 2001 seeking a wholesale review of the Labour Law.
“If you go to the average person on the
street in any country, what they would want…is for a government to set a wage
that is at such a level that it makes people comfortable,” he said. “I don’t
know of any country that has achieved that [with a minimum wage].”
The current basic wage rate set by the
US federal government is US$7.25 per hour. That wage does not apply to
employees who receive tips as part of their income. Mr. Anglin said the US
minimum wage would not allow every person in Cayman to live comfortably.
“Generally, the basic minimum wage is
set to a level in most countries that, for a person to work below that level,
it would shock the conscience of the average person,” the minister said.
While paying people at a level that is
typically just above the poverty line, Mr. Anglin said there are also other
economic considerations that go with setting a base wage rate.
Stated simply, it can cause inflation.
“We say the minimum wage in Cayman was
going to be X dollars an hour,” Mr. Anglin said. “If the reaction from the
merchants is that they increase their prices to a level that more people in the
economy are made worse off, then, is setting a national minimum wage positive
to the overall economy?”
Moreover, the minister said there are
potentially monstrous problems with policing a set standard wage in a country
that has no income tax rate and that has a large number of service industry
employees who work for tips – and presumably would be exempted from minimum
“The Chamber of Commerce, quite
conveniently, says they’re not opposed to a minimum wage; what they’d be
interested in is how it will be implemented,” he said.
So, if a company provides housing or
food to its workers, Mr. Anglin questions how, or even if, that would be
considered in calculating a minimum wage rate.
“How is that factored into a national
minimum wage?” he said. “Are we going to have carve-outs? And how is that
bureaucracy managed? Is government going to ensure…that we put the administration
in place to manage that, because you know, if we don’t put the infrastructure
in place, then [the system is] open to abuse.
“This has some serious costs and
policing implications. You think [the Department of Employment Relations] gets
a lot of complaints now? Throw this into the mix. I’m not saying that’s a
reason not to do it, I’m just saying…these are some real implications the
public needs to be aware of.” Minister
Anglin said he expects a motion to be brought in the next sitting of the Assembly,
which is scheduled to begin today, that will seek the implementation of a
minimum wage. But he said the Labour Law already gives the government the power
to do that and doesn’t require amendment. Furthermore, he said the issue needs
to be studied fully.
“You can’t expect to rush headlong into
what would be a politically expedient move without doing the real work behind
the scenes,” he said.
Basic wage recommended
There have been numerous studies on the
possibility of a minimum wage in Cayman, and the previous People’s Progressive
Movement government once promised to implement the wage prior to the party’s
loss in the 2009 general elections.
The 2008 National Assessment of Living
Conditions strongly recommended the development of the base wage as well.
“The absence of a minimum wage in an
economy like the Cayman Islands creates conditions for open exploitation,
especially of unskilled guest workers who respond to the complimentary push
factors in their home country and the pull factors of the Caymanian economy,”
the assessment stated.
An economist with the Kairi Group of
consultants that carried out the study noted that both the plight of poor
migrant workers and the need to integrate more Caymanians into the workforce
were compelling reasons for a minimum wage.
“If you establish a floor below which
you will not go, it means that you will force employers to look at other ways
of organising production and not depend on the lowest quality and the lowest
level of labour that can be sourced in the international community and the
regional economy,” Mr. Henry said. “The reservation wage amongst Caymanians is
much higher than is paid by the employers … and clearly some are prepared to
put their pride aside and go to the welfare department … rather than work at
wages they regard as sub-normal.”