Sitting at a fast-food drive-through window in Cayman, Cordell Riley handed over $18 and change for a burger, fries and a Coke and made a simple calculation in his head.
“It struck me that server handing over my meal, would need to work for at least three hours to afford that for herself. I just couldn’t see how that could work,” he said.
Riley had read with interest the Cayman Compass interview with minimum wage review committee chair Lemuel Hurlston, who described the current $6-an-hour threshold as ‘below starvation wages’.
Now he could see what Hurlston meant.
If a fast-food meal costs the best part of half-a-day’s wages, he wondered, how do workers survive?
Riley is the chairperson of the Bermuda Wage Commission, which just set a threshold of US$16.40-an-hour as its basement salary. That’s equivalent to CI$13.58 – more than double what low-wage staff are currently paid here.
On a recent visit to Cayman, in his other role as a board member of Bermuda’s credit union, Riley was amazed at the differences in the discussion around the minimum wage.
“The cost of living is around the same in Cayman as it is in Bermuda,” he said.
Some things – like fast food – are more expensive here.
“It seems impossible for people to live on those kinds of wages. I couldn’t believe the numbers.”
The Compass is working on a more exact cost-of-living competitive analysis between Cayman and other jurisdictions, including Bermuda.
But a cursory glance at prices for key essentials shows the two islands, with broadly similar population sizes and economies, face similar prices on key items.
At the Ice Queen fast-food restaurant in Paget, for example, a Big Queen double cheeseburger goes for US$6.75. A loaf of wheat bread at Bermuda’s main grocery chain The Market Place goes for $4.29, a half-gallon of milk for $6.29. Rent is harder to quantify and there are fewer options in Bermuda at a slightly higher price than Cayman.
But the cost of living is generally similar, with the two islands often given top-billing in global price index comparisons.
Different islands, same issues
Based on his own research and on spending time in both islands, Riley believes the challenges faced by Cayman and Bermuda are the same.
Unlike in the UK, for example, where the minimum wage is £10.42 (CI$11.17) he said there were no low-budget alternatives for groceries.
“You can get a loaf of bread in the UK for 30p so the challenges are different.
“In Bermuda and in Cayman if you earn the minimum wage you struggle to afford groceries, you struggle to pay rent or childcare.”
He said Bermuda’s minimum wage was considered the absolute baseline below which no one should be paid.
“The committee felt we shouldn’t implement a minimum wage that was below the poverty line – that was the bare minimum.”
Riley and his commission have faced pressure in Bermuda from those who believe the wage is too low, as well as on the other side, from businesses who warn it will cost jobs.
A separate, more complex exercise is in motion to determine a ‘living wage’.
He said that would be an ‘aspirational figure’ that businesses would be encouraged to work towards.
In the UK, for example, the Living Wage Foundation publishes data on employers that sign up to pay a baseline wage – higher than the mandatory minimum – that is directly linked to the cost of living.
Having been through a multi-year exercise to establish Bermuda’s minimum wage, including talks with economists from the International Labour Organization and research on policies in peer jurisdictions, Riley believes Cayman will need to elevate its minimum wage significantly.
“You are surely going to have to go higher. We are talking about the ability to survive here.”
He acknowledges that some employers will resist but believes they can and should adapt, as they are doing in Bermuda.
“The business community will always cry poverty but, at the end of the day, why should you be using a business model that depends on paying staff the least amount possible – less than they need to survive?”
One recommendation of the Bermuda report is that the minimum wage be adjusted each year – as it is in the UK – based on the consumer price index.
The aim is to maintain the purchasing power of the hourly rate as prices go up.
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Shame on ALL governments of the last few years for not increasing this minimum wage!