Minimum wage: What figures?

According to estimates from the Economic and Statistics Office, somewhere around 8 percent of the Cayman Islands workforce earn less than $4.50 an hour, and about 30 percent earn less than $9 an hour.

Those numbers — which represent, at best, government’s “best guess” — do not provide insight into whether or not Cayman should enact a minimum wage. In this instance, best guesses could well be risky guesses.

In order to arrive at figures for hourly wages, Cayman’s government statisticians are relying on their annual Labour Force Survey, which, unfortunately for this particular purpose, does not include exact information on hourly wages earned. It records only ranges of monthly salaries and the average number of hours worked overall — and so potentially does not distinguish between people who work part-time at relatively high hourly rates, and people who work around-the-clock at relatively low hourly rates.

Additionally, the information does not specifically account for the significant number of people in Cayman who receive gratuities or other bonuses in addition to guaranteed salaries.

The fact that Cayman does not have precise numbers on hourly wages is not surprising — given the country’s lack of an income tax. Unlike the U.S. with its Internal Revenue Service, Cayman lacks the mechanism to collect accurate information on income — and, it follows, to enforce any minimum wage law that legislators enact.

That doesn’t mean Cayman couldn’t create a new enforcement mechanism — although the last thing this country needs is an additional layer of cumbersome and burdensome bureaucracy. A minimum wage law could, in theory, be enforced via a tribunal or commission responding to individuals’ complaints, but judging by the performance of such bodies responsible for pensions, health insurance and gender equality, for example, Cayman rightly should be wary of adopting or adapting those models.

Let’s ask a fundamental question:

What is the purpose, precisely, of instituting a statutory minimum wage in Cayman? Is it expected that such a measure would result in greater employment among Caymanians, who presumably would take over jobs currently occupied by expatriates willing to work for wages deemed “too low” or working in positions somehow considered “beneath them”?

If that is the case, then our officials would be well-advised to halt their march toward a minimum wage and focus their attention (and rhetoric) on personal responsibility and professional ambition.

We do not believe for a moment that anyone refusing to work for, say, $3.50 an hour will be attracted into the labor force for, say, $5 an hour. If a person’s income is zero and a job becomes available at any hourly wage, he or she should take that job. What is the alternative? To wait for a handout from family members or social services?

Nevertheless, we are reminded of Napoleon’s statement of the obvious: “If you start to take Vienna, take Vienna.”

Likewise, if Cayman’s lawmakers wish to establish a national minimum wage, then they should establish a national minimum wage. North Side MLA Ezzard Miller’s suggestion of $5 per hour seems appropriate enough. What is not appropriate is to establish a 19-member committee with a $200,000 budget to commission studies, assemble focus groups and hold town hall meetings.

Let us offer a prediction — and a concern. By their nature, committees compromise and almost always complicate. Expect a recommendation of not one national minimum wage but perhaps many more. Maybe even a separate minimum wage for every business category identifiable in the Cayman Islands.
To us, Ezzard’s proposal is looking better and better.

1 COMMENT

  1. If the purpose of trying to establish a minimum wage, is to result in greater employment for Caymanians over expatriate workers, I do not think it will change a thing. So I would not touch that dial.
    My belief is that employers should exercise some discretion on how they pay an employee. If you can afford it and you know you have a hard working employee who is an asset to your home or business, they should not have to beg you for a few dollars extra to feed their family and live comfortably.
    You should be considerate. Remember this one thing a 50 cents or dollar extra may matter little to an employee, once you treat that person good. Take for instance a good bonus that they can look forward to every year for Christmas, and maybe Easter. Maybe they only receive 3.50 to 5.00 an hour but handing them a 500.00 check at Christmas time will surely put a twinkle in their eyes and presents under a tree. Just a thought.

  2. A statutory minimum wage is important to help prevent the ongoing abuse of expats just as much as it is needed for any other purpose. Some of the things that I hear about from expats within the lower income brackets is disturbing and something needs to be done to help these people that are clearly being exploited.

  3. Minimum wage should not be enacted for a host of reasons. Abuse of ex-pats is not limited to merely working ceaselessly to pay bills. Abuse of ex-pats (and really any citizen in society) takes the form of denied vacation, unpaid pension, inadequate healthcare, a lack of safety in the workplace and employers who withhold permits and make unwanted sexual advances. Minimum wage doesn’t address those issues. So, how exactly, are we improving the lives of lower income brackets?

    Next, any business not wishing to pay minimum wage can skirt having to do so. If you only want to pay an employee 500 a month, you will reduce his hours such that that will be the maximum he earns. I foresee a lot more permit sharing or cases where employers take out permits and send the person off to scrounge what they can. People who don’t want to pay minimum wage and statutory benefits might not object to a fixed daily rental fee for an individual’s service.

    Minimum wage will become a voting weapon, that is used by politicians looking to curry favor, and it will spiral upwards unchecked.

    What we need to do, should minimum wage be enacted is pass legislation that compels government aid recipients, below retirement age to obtain minimum wage jobs to reduce the monthly stipend that they receive. There should be penalties for job hopping and a bar as to how often per calendar year they are allowed to qualify for aid. Aid should be reduced with each successive child they give birth to.

    If we truly want to combat government expenses and a poor quality of life here, then we need to focus not just on minimum wage, but rather on how minimum wage can reduce the burden on government to provide welfare.

  4. The people commenting on minimum wage are apparently not those who are receiving a low wage. One person even said that the employer would pay the better employees a higher wage.Now isnt that a hoot to listen to.

    The purpose of minimum wage is for many reasons and one of them is to stop slavery at its present level.

    Paying a worker 4 an hour and have them try and live on that is tantamount to slavery. Have some of you try it.

    Cayman prides itself on where it stands in relation to the rest of the world in its advancement. It is more than readily apparent this method of determining where we stand is not being applied here. Isnt that convenient.

  5. I’m not entirely sure of the argument made, at 3.5 an hour for a 50 hour work week that still only comes to 175/week, are you really saying people are lazy if they won’t work for that? Annualise that and we are talking about 9k per year.

  6. The vast majority of people working for the wages like 3.50 an hour are Expats, raise that to 5.00 and it won’t change anything. Who it will help the most are the expats working for those wages. They are absolutely right that if you won’t take the job 3.50 you most likely won’t take it for 5. The funny thing about this is that Ezzard who is usually all about help the Caymanian, screw the Expat came up with an idea that will do more for the Expat population than anyone else.
    As for the people screaming foul about making 9K a year, nobody is forcing you to work for that amount. Bottom line is that if you want a higher salary you need to make your services worth more. You always have the option to go to school and take classes to get a different type of job or start your own business, I’d thing you could make more than 175 a week catching and selling Lion Fish. Probably more if you cooked them and sold them on a bed of rice.
    Twyla I like your idea about the bonus, a 10 a week raise seems like nothing but if you save that 10 a week and give them a 520 Christmas bonus they will appreciate the hell out of it. I think I will use that one next year, your suggestion equates to a 25 cent an hour raise and 2.00 a day Instead of a 50 Cent raise give 25 and save 25 if won’t even cost you more. People usually turn their noses up to these types of raises anyway

Comments are closed.