The chair of the Minimum Wage Advisory Committee issued a warning to low paid foreign workers this week, not to expect a life of luxury in the Cayman Islands.
“A minimum wage will prevent you from starving, but it’s not going to give you the quality of life that you’re expecting in the Cayman Islands,” he said.
Lemuel Hurlston was speaking at a town hall meeting at the Aston Rutty Civic Centre in Cayman Brac on Thursday, 7 Sept.
The aim of the public event was to give residents on the sister island an opportunity to learn more about the committee’s work and how a new minimum wage will be determined.
Following presentations from the committee, one audience member asked if the minimum wage should be lower for foreign workers versus Caymanians.
He said when employing staff from abroad, he had extra expenses such as work permit fees to pay for, meaning his overall costs tend to rise.
Hurlston said there are some jobs, particularly in the service industry, that Cayman-born citizens are “not willing to do”, and that is where imported labour comes in.
“When we advertise a job, we got a lot of responses, but there’s a downside to that,” Hurlston said, “and that is, the Cayman Islands is a very expensive place to live.
“We have to be honest with our potential employees and let them know that it’s not going to be all milk and honey, working and living in the Cayman Islands.
“Because the cost of living is going to bring a dose of reality to those families who are dreaming otherwise.”
But Hurlston insisted the committee will not be discriminatory and there will be no difference in minimum wage depending on nationality. “We believe that all labour is worthwhile,” he said.
Being careful
Mahreen Nabi, chair of the subcommittee for research methodologies, added if Caymanians had a higher minimum wage to foreign workers they would be less likely to be selected for jobs.
“All of a sudden, you’re looking at who to hire, and you’re saying well, this person is costing more, even though they’re Caymanian… we just have to be very careful.”
Meanwhile, Hurlston said the foreign workforce is extremely important because Cayman is “generating jobs, at a rate faster than we can produce Caymanians”.
“We’re having about 900 births a year… we’re graduating about 600 students a year from our school system,” he said.
“We’re not producing enough qualified Caymanians to fill the jobs, so we’ll always be diverging and dependent upon imported labour to fill whatever gap remains.”
He said businesses have to make tough decisions about who to employ, and absorb any potential increasing expenses themselves.
Cayman’s minimum wage has been set at $6 per hour since 2016 – 50 cents below ‘starvation wage’, according to Hurlston in an earlier interview with the Compass.
The committee is expected to file its recommendations on a new minimum wage to government at the end of this month.
Related Videos
Let’s hope Government does not sit on the recommendations and procrastinate indefinitely. What is needed is for one individual to have responsibility for this project and be held accountable for any unnecessary delays.
Emotions aside, higher minimum wages will lead to price increase for most products, including hospitality. Higher hospitality costs will reduce attractiveness of the island for holidaymakers and lead to reduced revenues. And on and on… It is a very fragile economic paradigm here and MW is a sledgehammer. The unpredictable repercussions will be felt for years to come and make everyone worse off.
But in the end, it would probably settle around the same buying capacity of MW as we have today: higher wages vs. comparably higher prices = same picture. Such regulations only tend to increase bureaucracy, not solve the declared target issues, therefore IMHO it should not go ahead.
For any given person to effectively increase their buying capacity, the only practical way is to increase the value of their services: work better, or longer, or harder, get training and do a different job, etc. This is how most well-off people got there, not through some magical government edict. And if that value cannot be increased, the employers cannot be forced to pay more, that would be the definition of unfairness.