Work permits and unemployment: Exposing the myth

The assertion that foreign workers take jobs from Caymanians has been reported and repeated so often that the utterance has attained nearly mythic stature. And that’s where it belongs: in the realm of myth.

The cover story of this month’s Cayman Islands Journal will, we hope, lay to rest that fallacy once and for all. The story’s headline will serve as an appropriate epitaph: “Work permits have no negative impact on Caymanian employment.”

Unlike some who routinely rely on anecdotal evidence to support their narrative of conflict between employed expatriates and unemployed Caymanians, the Journal article is founded on incontrovertible facts.

And here are the facts, which have been operative and discoverable in Cayman for the last 15 years, at minimum: “… the Caymanian unemployment rate is actually lower when there are more people in the country on work permits. Conversely, when work permit numbers drop, Caymanian unemployment increases …”

When work permits go up, Caymanian unemployment goes down.

When work permits go down, Caymanian unemployment goes up.

In other words, it is simply not evidence-based to equate the issuance of a work permit to an expatriate with a lost job opportunity for a Caymanian.

Sorry, Ezzard.

We often find ourselves admiring independent North Side MLA Ezzard Miller for his maverick style of politics, his patent devotion to his district and, most of all, his fearless outspokenness. Many a time has an off-the-cuff remark from Mr. Miller brightened the pages of the Compass on an otherwise “slow news day.”

However, when Mr. Miller or anyone else suggests that the proper public policy position on reducing Caymanian unemployment is to restrict the authorization of work permits, he has no factual foundation or justification to support his specious argument.

As explained in the Journal article (the findings of which are based on the Cayman government’s own figures, the best possible cache of statistics on the topic), there is no demonstrable negative correlation between the number of work permit holders in Cayman and the number of employed Caymanians. There just isn’t.

Actually, a stronger argument can be made for the obverse – that more work permits result in fewer unemployed Caymanians. But we don’t think that’s quite right, either.

What we divine from the data is the lack of a direct link, negative or positive, between the number of work permits and the number of unemployed Caymanians at any given time. Rather, the two series tend to move together because they have a common cause: namely, the prevailing state of the local economy.

Thankfully, as far as the continuing prospects of Cayman’s business environment are concerned, that’s the viewpoint espoused by the majority of Cayman’s leaders, including Premier Alden McLaughlin and Opposition Leader McKeeva Bush.

Simply put, the healthier Cayman’s economy, the more job opportunities are available … for everybody – expatriates and Caymanians alike.

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  1. I agree with you and I believe Ezzard would agree with you also. Population of the Cayman Islands has been going up each year. Work permits basically have been on the rise for a long time . Their has been an up and down with both but hotels ,rest, construction and tourist related jobs are increasing. Plus no minimum wage has still not been passed. Businesses are adamant to passing a bill that will change many people to middle class . Why?
    Lets see if , when a bill is finally passed if work permits will rise.

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  2. Facts often take a back seat to effective hot button political rhetoric. The subject of today’s editorial will no doubt be refuted on the air waves with empirical evidence of an uncertain origin.

    An always effective argument starts with a personal story of someone known to the person making the claims who has been wronged. What makes this so effective is that no one wants to see a Caymanian wronged within their own country but the facts of the case are always elusive and uncertain but the message remains clear.

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  3. I look at the word taken, and try to align it with comments that foreigners take away Caymanian jobs.
    How can I truly agree to that knowing full well that no one come here and take anything from us. It is given to them by Caymanians, what ever stage Caymanian you maybe in, home grown, resident or status holder.
    Every nation looks out for their own accept we ourselves, because we are so mixed up we do not know what nation we belong to, and so in truth and fact what is a true Caymanian? Our generation originally came from The Boddens, Edens, and Solomons who were all Europeans, who then mixed with Africans. Right now that original generation is gone by interbreeding, so who are we? I think we should all just try to get along.

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  4. Why should cayman be different from anywhere else in the world? Each government must ensure their people are first to employment.

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  5. David,

    Passing a minimum wage bill especially for $5 an hour will in no way change a lot, if any, people to middle class. There’s a lot of hurdles to jump in order to get from $5 an hour to middle class. Just being realistic.

    What it will do is put a little more spending money into the hands of people in those income ranges, which as far as I understand, are mostly expats. It will also increase the cost of services because businesses will just pass it on the consumer.

    If a minimum wage is passed it needs to be a more realistic number like $8-$9 an hour. But as far as it helping employ more Caymanians, I don’t believe so and I would really like someone to explain to me why it would.

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  6. I feel most people from here have no problem with anyone coming from abroad. If we did they would go immediately. We benefit in some cases, in others we don’t.
    It doesn’t matter whether Caymanians or foreigners are hired, they still need a living wage. It doesn’t matter whether they are Caymanian or foreigner employers, they should have a training program. This program is for young people who would never qualify without training.
    I worked at the old Holiday Inn and they provided training. They provided for anyone. My late aunt was trained in NYC and became the first housekeeper. She in turn trained other girls and men until she left. She was replaced by another Caymanian. Banks in Cayman always do it, how else would you know? Very few people went to college to learn banking jobs.
    One would think that everyone in this country is stupid. But even those who did not do well in school have common sense.
    How did anyone learn to drive prior to driving instructors? Who teaches how to drive a boat? How about dump trucks and bulldozers? Which school teaches farming and fishing? Someone had to train people who graduated or didn’t graduate.
    There is no diploma for any of these jobs here because there are no schools. But I can assure you they got training. So once training is applied to all jobs in tourism I think life will be better for all.
    Crime is an effect. The cause is no hope for the future.
    So lets try and do the right thing and pay proper wages.

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  7. That belief may have been the smoke screen that prevented an objective review of the problem.

    In the UK there was a review of the definitions of unemployed and they added a category of ‘non-employed’;- to differentiate between those without work versus those not able to work.

    A friend had significant spinal surgery and did not have a job for almost 3 years – with multiple surgeries and recovery time after which he had to retrain for a different career as his previous position involved lifting not compatible with his fused vertebrae. While classed as ‘unemployed’, at no stage in that period could he have actually taken a job.

    It may be that some of Caymans ‘unemployed’ fall into a similar categories, physical and mental conditions (injuries, disabilities, depression), or those in circumstances which prevent it – caregivers for older relatives…
    So the first task is to identify those who would benefit most from assistance.

    There is a technique called data mining and by analyzing the work permits, it is possible to show trends (the forms might need some additional ‘statistical’ fields added)
    e.g. if 2015 shows 300 ‘coded’ welders, up from 207 in 2010 and 132 in 2005… then it might be beneficial to bring an accredited trainer on island – training for ‘growth’ sectors is a great focused for use of government resources.

    It might also show that for financial sector jobs 80% (for example) of work-permits holders had a degree level education or higher – so incentives needed to keep youngsters in school and with an eye on higher education.

    The UK brought in legislation where 16 year olds can only leave school if they have a job/training to go to, otherwise it’s 18!

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  8. Certainly agree that a minimum wage of 10.00 or higher will solve the problem and including room and board for example in the earnings of helpers and waiters who work on tips in restaurants.

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  9. Good points Andy but I’d be careful about trying to take any lessons from ROSLA (Raising of the school Leaving Age) from 16 to 18 in the UK.

    To start off with it only applies to England, the rest of the UK refused to implement it. It also doesn’t fully kick in until September this year and is widely regarded as a fudge to cover up youth unemployment. Right now SLA is 17 and frankly from what I hear that hasn’t made much difference.

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  10. However, when Ezzard Miller or anyone else suggests that the proper public policy position on reducing Caymanian unemployment is to restrict the authorization of work permits, he has no factual foundation or justification to support his specious argument. What he does have, however, is VOTES for his simplistic, small-minded US versus THEM rhetoric. Entitled Caymanians versus driftwood.

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  11. A big problem is education.
    My wife helps part time as a volunteer in the school system.
    There is a significant illiteracy problem. Children are not held back to repeat a year if they do not pass their exams. Nor are they given much remedial help.

    Some children cannot even comprehend what they are being taught, but are pushed upward through the educational mill anyway. So they sit bored and fidgety through their classes because they must.

    And then they are spat out the other end pretty much incapable of holding a decent job.

    The educational budget MUST allow for extra help for these children. And their parents must spend some time every day helping them with their reading. And not just give them a book and sit in front of the TV either.

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  12. Excellent point Norman, however I doubt the will ever be accepted as part of the problem, the expectation is that folks are just given jobs whether they qualify or not because they are entitled to it. If you’re not pushed hard to do what’s needed while in school because you’re are entitled to graduate whether or not you’ve got a good education, you will have the same attitude when looking for work that you or the one doing the employer a favor, like they owe you something.

    One other thing, With a 200 Million Dollar University sized High School, you’d think that the curriculum would be top notch. Just goes to show that breaking the bank to build that shinny new school hasn’t fixed the problems with education.

    Were’s Tara ?

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  13. This is an easy fix:
    1) When a 100% Caymanian owned business/employer needs employees, they must hire 100% Caymanians
    2) When an Expat/Camanian partner owned business/employer needs employees, they must hire 100% expats
    This will promote more Caymanian entrepreneurship, resulting in less Caymanian unemployment.

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  14. Jack, here’s another thought. Anyone who busts their behinds and invests their money into starting a business should be able to make decisions that effect the viability of their business which includes being able to hire the best person for the job no matter what his nationality.

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  15. So, we just returned from a wonderful week on Grand Cayman at one of your dive resorts. I was surprised that 100% of the dive staff were expatriates. I would imagine that finding or training locals to staff at least some of the dive boat type jobs would not be difficult and would be attractive to Cayman young people. Expats work cheaper? Other reasons.

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