‘A slap in the face’: Shock and dismay among low-income workers over minimum wage decision

Low-income workers reacted with shock and disappointment Monday as government announced it would not be following the recommendations of an expert committee to increase the $6-an-hour wage for most employees.

A proposed increase to $8.75 would have benefited more than 10,000 people, including over 2,000 Caymanians, according to an extensive consultation exercise that concluded the current hourly rate was below the poverty line.

The Compass reported extensively on the challenges faced by domestic helpers, security guards, landscapers and janitors living on baseline wages in a special report last year, at a time when an increase in the base wage was being contemplated.

Following government’s announcement yesterday, many of the people interviewed in that series reacted with dismay.

“This is a slap in the face to all of us,” one nanny told us Monday.

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“I am going to have to leave the island. It doesn’t make sense any more.”

A security guard, who works 72-hour weeks for $6-an-hour, told us, “It just feels very unfair.”

He added that prices had gone up in the grocery stores, on rent and all other necessities. He said the increase to $8.75 would have helped him get “two meals a day, instead of just one”.

“Almost everywhere in the world they are doing a cost-of-living adjustment. Yes, we can leave, but then who is going to do the work?”

Our previous reporting indicates that the $6-an-hour minimum wage introduced in 2016 is now only worth just over $4 an hour in terms of its spending power, because of price inflation over the past eight years.

Extensive and expensive consultation

The Cayman Islands government spent $53,638.15, equivalent to four-and-a-half years wages for a minimum wage worker, on a vast consultation exercise, canvassing the opinions of more than 10,000 people throughout 2023.

The Minimum Wage Advisory Committee produced a 154-page report detailing its discussions with every business group on the island and what it described as a “long and intense” negotiation on the principle that the new wage must be fair to employers as well as staff “irrespective of class, status and gender”.

An appendix to the report indicates that the Chamber of Commerce, which represents businesses on the island, indicated support for a slightly lower increase to between $7.50 and $8 an hour.

Government did not release the report, which was provided to Cabinet in October 2023, until March this year.

It initially made no comment about whether it planned to proceed with the recommended increase, later suggesting more consultation was needed on the figure.

Pressed for more information in Parliament Monday, Labour Minister Dwayne Seymour indicated government had decided not to proceed with the increase to $8.75 for the time being and would leave the minimum wage at $6 an hour.

Instead, he indicated more government funds would be directed to another review by a new committee, which would be specifically asked to investigate the possibility of sector-specific minimum wages.

Opposition leader Roy McTaggart, whose question prompted that update, told the Compass on Monday night that he was disappointed with the response.

“It seems quite clear to me that the government has not accepted the report of the Minimum Wage Advisory Committee,” he said.

“The thousands of Caymanians who are depending on an increase in the minimum wage to help them through the cost of living crisis are no closer to seeing that become a reality than when the whole process began.”

There was an exception for some industries, however.

Minister Seymour indicated that the wage for hospitality workers would be increased to $7, from $4.50 an hour, from next July, closing a loophole that had previously allowed businesses to count gratuities towards their wage calculations.

This announcement appeared to take the industry by surprise. Troy Leacock, president of the Cayman Islands Tourism Association, questioned why the industry had been singled out.

While hospitality workers do have concerns around wages, the ability to buffer salaries with tips and gratuities means there are fewer welfare concerns around people working in that industry.

For domestic helpers and security guards, among others, low wages and the absence of overtime benefits are becoming a bigger concern as the cost of living increases.

‘Impossible to stay’

A nanny who has worked in Cayman for more than a decade for numerous employers said the cost-of-living without any increase in wages meant it was becoming impossible to stay.

She said her employer, who has children in private school, could no longer afford to live in Cayman either, despite earning good wages.

“I will have to pack up and leave and I am not the only one,” she said.

“Maybe that is what people want, but no Caymanian is going to work for that money, so who will look after the children?”

She acknowledged complaints in the community that minimum wage workers often send part of their pay cheque home, despite the low wages.

But, she said, that was the only reason to take the job in the first place.

“We are not here because we hate our own country and want to leave. If you can’t survive and save a little to send home, it doesn’t make sense to be here.

“I am leaving, I’m running and it is not just me. There are people hurting way more than I am.”

Joanna Boxall, publisher of Cayman Parent magazine and Cayman Resident magazine, which compiles advice for parents on recruiting nannies and caregivers, among other things, said she was disappointed to see the minimum wage had been maintained at its current level.

“I am deeply sorry that the Cayman Islands Government has declined to raise the minimum wage, as it is obvious to all that CI$6 an hour is next to impossible to live on in the Cayman Islands,” Boxall said.

She said she trusted that government had examined the issue from every angle and concluded that it was not something that could be done at this time.

In the absence of a mandated increase, she encouraged business owners and people hiring domestic staff to search their hearts and their budgets to provide an increase.

“The hardship of trying to survive on CI$6 cannot be underestimated, and I know this having talked to numerous domestic helpers who have no other choice,” she said.

Sharing rooms becoming more difficult

A prominent member of the Filipino community in Cayman said people were finding ways to survive despite the low wages. He said there had been a clampdown from landlords, however, on more than two people sharing a room. Combined with an increase in rents overall, this was making it difficult to get by.

“That has been a challenge to a lot of Filipinos but they are still here, so they can still find a way to manage.”

He said he had heard from others who had moved to Canada for higher wages and found life easier, particularly if they had children. But there are other challenges.

“It is snowing six months of the year,” he said.

“I can’t speak for all Filipinos, but I think a lot of us like Cayman because it is an easy-going place.”

Charities bridge the gap for low-income workers

For both expatriates and Caymanians, charities like Acts of Random Kindness are bridging the gap between stagnant wages and the high cost of living.

Hany Ramgeet, client relations manager at ARK, said there were 68 new applications for food and electricity support in the last month alone.

ARK spends between $3,000 and $5,000 each month on food vouchers for some of the poorest families in Cayman. Many of those families have someone in the household who is earning money; they are just not being paid enough or getting enough hours.

This month, for example, ARK is paying the grocery bills of a Caymanian mother of two who works in housekeeping and earns $6 an hour. Her job is on hold during slow season and even that small income is no longer coming in.

Another client, also a mother of two, lost her job and now the family relies on her husband’s low-wage income as a barber.

“I think people needed an increase,” she said.

“You go to the grocery store, so you know how it is. It is worse at this time of year because the hospitality business have less customers and less hours.”

Tourism leaders ‘shocked and disappointed’

Tourism chiefs were similarly disappointed, for different reasons.

Government has decided to increase the minimum wage in that sector form $4.50 to $7 while removing the ability for tips to be counted as part of the calculation.

While there are well-documented concerns among hospitality workers about pay and benefits, there are fewer issues with poverty in that sector.

Some workers who spoke to the Compass for a series last year said they were earning upwards of $50,000 annually, once gratuities were factored in. Their concerns were more around the size of pension contributions, health insurance provision and monitoring of how tips were shared among the staff.

Troy Leacock, president of Cayman Islands Tourism Association, said he was surprised that the industry appeared to have been singled out.

“I am shocked and disappointed by what appears to be a decision to target the hospitality sector with a 56% increase in the minimum wage while leaving all other sectors at $6 per hour,” he said, promising a full statement from CITA in “due course”.

Meanwhile members of the Minimum Wage Advisory Committee were putting a positive spin on the news.

“Today’s announcement is progress,” Mahreen Nabi, the Business and Professional Women’s Association of Grand Cayman representative on the Minimum Wage Advisory Committee, told the Compass Monday.

“Any movement forward, towards the implementation of the thoroughly researched and heavily considered recommendations of the committee is a step.”

• Additional reporting by Reshma Ragoonath.