Minimum wage motion revisited

Independent Member of the Legislative Assembly Ezzard Miller intends to put the issue of minimum wage before the government as one of three motions he hopes to present when the Assembly resumes.

This will be Mr. Miller’s fourth attempt to get the government to vote on introducing a $5 an hour minimum wage to Cayman.

“My first motion is the perennial problem with minimum wage. I’m bringing that back again. Hopefully, I have got it in a sensible form this time and the government will have to vote yea or nay,” said Mr. Miller.

In February, the North Side MLA attempted to bring a committee stage amendment on minimum wage during a debate on changes in the Labour Law relating to a cap on severance pay, but Speaker of the House Mary Lawrence, who had initially allowed the motion, eventually ruled it should be withdrawn. Government members argued that Mr. Miller’s motion was not relevant to the debate.

In a press briefing during a break in that debate in February, Premier McKeeva Bush said the government planned to introduce minimum wage legislation by June.

Mr. Miller also brought similar motions on minimum wage during amendments to the Penal Code and the Immigration Law. Each time, his motion was voted down.

Gas tax

The North Side MLA also intends to bring a motion asking the government to reduce import duty on gasoline and diesel by 50 cents per gallon.

Gas prices at local petrol stations have leaped in recent weeks, edging toward $6 per gallon in some places.

In last year’s budget, the government added an additional 25 cents import duty on petrol and diesel, bringing the duty tax up to 75 cents and 85 cents per gallon, respectively.

“The people in my constituency are the biggest sufferers under that government tax.

We drive the farthest,” said Mr. Miller.

The North Side representative’s third motion requests the government to reduce import duty on medicines and medical supplies to zero.

Under the Customs Tariff Law, a 12 per cent import duty is currently levied on medical and pharmaceutical goods.

Referring to a proposed medical tourism hospital project by Indian cardiologist Dr. Devi Shetty, Mr. Miller said: “If we can give duty concessions to an investor who projects to make $4.5 billion in 10 years, we should be able to do something for Caymanians who are on fixed incomes and who won’t have enough in their retirement packages for medication.

Why shouldn’t they get it at a reduced price?”

The Legislative Assembly is scheduled to resume on 17 May with the state opening and budget meeting of the 2011/12 session.

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9 COMMENTS

  1. minimum wage. Bad idea all around. It wont’ give more Caymanians jobs. It’s going to just put more business’s out of business. And increase the cost of living for everyone.

    Simply put. People work now, for what they are willing to work for. Business must raise thier wages willingly to encourage people to work for them. If it’s too low, no one will work for them. And they have no business.

    If you force business’s to pay more for the same amount of work. That means the price of whatever they are selling must go up. Which means, more expensive products for the consumer. Which then means less goods bought by the consumer due to the increase in price.

    Free market is the only way to go. Let the job hunters decide what is a fair wage, by either working there, or passing it on.

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  2. and to add to this. They think it’s only going to be 5 dollars an hour now. Wait until as years pass. You will be forced to raise minimum wage again and again. Becuase as the cost of living goes up, due to the fact, you are implementing a minimum wage. The minimum wagers will ask for more, eventually. And get it. because the cost of living is too high. And around the circle it goes again.

    So it’s 5 dollars now. Wait till it’s 10 dollars later. Imagine the cost of a cup of coffee then!

    (and if you dont’ think that senario will ever play out. look at Canada).

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  3. I think minimum wage set up is reasonable. Increase in salary means increase of consumption for the laborers, more consumption means increase in sales for the businesses. Increase in labor cost for the businesses is nothing as it offset the breakeven analysis of increase in consumption. Therefore the most important thing here laborers are protected. The domino effect healthy laborers means healthy living, happy family, peaceful society, unity, etc.

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  4. You want to stop employers from paying employees chicken feed?! Then… simply lower duties, government fees, and indirect taxes, and make it easier for locals to start and maintain their own businesses. Lower the cost of living! A minimum wage would not be necessary if this is done.

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  5. Big Berd, Can’t agree with you more.

    It’s not only bad, it’s stupid and will harm the very people it’s supposed to help!

    This is just a feel good _political bill_ not an economical one. anyone with the most basic common sense about the economy knows when you artificially increase the cost of something, in this case labor WHICH IS NOT BASED ON DEMAND, will increase the cost to the consumer of that thing in this case labor and will in turn lower its consumption. i.e. you will get LESS of that thing.

    So cost goes up, demand hasn’t changed, therefore consumption/utilization goes down.

    There the circular analysis you gave big berd is right, for several reasons, one that you mentioned, as cost goes up, so does the need of the minimum wage to keep rising, AND,
    The minimum wage now becomes an election political football, and its all going to be about who’s going to raise it next election. therefore

    Minimum wage, cost of living will perpetually continue to climb, while no one will ever be better off for it! EVER!

    This can be verified in the states. the minimum wage now I believe is almost 8.00 an hour depending on which state you live in.

    Anyone on minimum wage is still POOR. it doesn’t and has never solved anyone’s misery. It’s ONLY A TOOL TO BUY VOTES. Ezzard knows this or he’s a fool.

    His notion that because every other country in the world does this, must be a good thing leads to believe that he is in FACT A FOOL!

    Create OPPORTUNITY! not welfare! create a DEMAND where they will directly benefit from, for crying out loud!!

    This minimum wage will do NOTHING other than a very short term increase in wages then an instantaneous a even higher rising cost of living WHERE it will affect the people getting the minimum wage the hardest.

    This is the kind of damaging politically expedient policies that end up hurting countries and you CAN’T EVER LOWER OR GET RID OF!!

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  6. Bodden …simply lower duties, government fees, and indirect taxes, and make it easier for locals to start and maintain their own businesses. Lower the cost of living! A minimum wage would not be necessary if this is done

    It really isn’t so simple is it. Lowering costs and taxes etc, hmmm, how many business owners are going to put that ‘saved’ money into the wages of their staff?

    Make it easier for locals to start a business? How about making it easier for anyone to start a business here, that doesn’t need a sponging local silent partner.

    Implement a minimum wage, many countries do it successfully. A minimum wage would still be a very small amount. All these poorly paid ex-pats will soon be out of a job anyhow, there are plenty of Caymanians managing to ‘graduate’ with no qualifications, waiting to take these positions…

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  7. Will this motion establish a minimum wage only for Caymanians or for expats as well? As I see it, if it’s only for Caymanians than it’s a colossal waste of time.

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  8. unintended consequences

    A Minority View

    By Walter Williams
    Columnist

    Washington As if more proof were needed about the minimum wage’s devastating effects, yet another study has reached the same conclusion. Last week, two labor economists, Professors William Even (Miami University of Ohio) and David Macpherson (Trinity University), released a study for the Washington, D.C.-based Employment Policies Institute titled Unequal Harm: Racial Disparities in the Employment Consequences of Minimum Wage Increases.

    During the peak of what has been dubbed the Great Recession, the unemployment rate for young adults (16 to 24 years of age) as a whole rose to above 27 percent. The unemployment rate for black young adults was almost 50 percent, but for young black males, it was 55 percent.

    Even and Macpherson say that it would be easy to say this tragedy is an unfortunate byproduct of the recession, but if you said so, you’d be wrong. Their study demonstrates that increases in the minimum wage at both the state and federal level are partially to blame for the crisis in employment for minority young adults.

    Their study focuses on 16-to-24-year-old male high school dropouts, understandably a relatively inexperienced group of labor market participants. Since minimum wage laws discriminate against the employment of the least-skilled worker, it shouldn’t be surprising to find 16-to-24-year-old male high school dropouts its primary victims.

    Among the white males, the authors find that each 10 percent increase in a state or federal minimum wage has decreased employment by 2.5 percent; for Hispanic males, the figure is 1.2 percent.

    But among black males in this group, each 10 percent increase in the minimum wage decreased employment by 6.5 percent.

    The authors go on to say, The effect is similar for hours worked: each 10 percent increase reduces hours worked by 3 percent among white males, 1.7 percent for Hispanic males, and 6.6 percent for black males.

    Even and Macpherson compare the job loss caused by higher minimum wages with that caused by the recession and find between 2007 and 2010, employment for 16-to-24-year-old black males fell by approximately 34,300 as a result of the recession; over the same time period, approximately 26,400 lost their jobs as a result of increases in the minimum wage across the 50 states and at the federal level.

    Why do young black males suffer unequal harm from minimum wage increases? Even and Macpherson say that they’re more likely to be employed in low-skilled jobs in eating and drinking establishments. These are businesses with narrow profit margins and are more adversely affected by increases in minimum wage increases. For 16-to-24-year-old men without a high school diploma, 25 percent of whites and 31 percent of blacks work at an eating and drinking establishment.

    Compounding the discriminatory burden of minimum wages, not discussed by the authors, are the significant educational achievement differences between blacks and whites.

    The best way to sabotage chances for upward mobility of a youngster from a single-parent household, who resides in a violent slum and has attended poor-quality schools is to make it unprofitable for any employer to hire him. The way to accomplish that is to mandate an employer to pay such a person a wage that exceeds his skill level.

    Imagine that a worker’s skill level is such that he can only contribute 5 worth of value per hour to the employer’s output, but the employer must pay him a minimum wage of 7.25 per hour, plus mandated fringes such as Social Security, unemployment compensation and health insurance. To hire such a worker would be a losing economic proposition. If the employer could pay that low-skilled worker the value of his skills, he would at least have a job and a chance to upgrade his skill and earn more in the future.

    Minimum wage laws have massive political support, including that of black politicians. That means that many young black males will remain a part of America’s permanent underclass with crime, drugs and prison as their future.

    Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at http://www.creators.com.

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  9. Very good point Commoner, If it’s only for Caymanians all it will is put more of them out of work..If it’s for all, it will at least make it less lucrative for people to hire Expats if it would cost them just as much as hiring a local, Maybe even more costly with the cost of a work permit to bootHopefully the folks pushing this are intelligent enough to realize that

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