Inflation undermining economic success
(CNS): The good news that government has been promoting over the last few years, that the economy is growing and the public is benefiting from this improvement in the Cayman Islands’ domestic fortunes, is now being challenged by persistent levels of inflation, which is eating away at the limited disposal income of many people. In the latest figures from the Economics and Statistics Office recording the consumer price index at the end of September 2018, the rate of inflation last year averaged 3.8%, compared to the inflation rate in 2017 of 1.9%.
The increase in inflation throughout last year was fuelled by transport and housing costs, utilities and food. At the end of the third quarter last year inflation was running at 3.5% higher that at the end of the same period in 2017. According to the ESO report, electricity alone accounted for an increase of more than 30%.
All categories of food increased but there were some serious leaps, with fruit increasing by 12% and bread by 8%. Another increase of concern, especially for seniors on fixed incomes, was a 2.6% increase in the cost of medicine. While there was a small decline in the rate of growth in the overall consumer price index between the end of June and the end of September last year, certain categories, such as utilities and food, were higher.
Inflation is now having a significant impact on the cost of living in Cayman and beginning to pose a real threat to the economy because of its impact on pensioners and those on low wages. But so far, the ministry of finance has not commented on the problem or what it plans to do about it.
CNS has contacted the finance minister and the financial secretary to see if government is going through the process of looking for solutions to address the issue, given the limited tools it has to deal with inflation, and we are awaiting a response.
Government does not control interest rates and has no fair trade or consumer protection legislation to control price increases. And in the areas where it does have some minor control, such as approving rate increases for the power providers, it still has no influence on the fuel surcharge, which is largely behind the massive increase in electricity costs.
See the latest Consumer Price Index report on the ESO website
#Freeze non essential Work Permits Now!
#No one seems to see that the recent Law changes will allow 9 month temporary permits ., which means that seasonal expats will RULE the off-season tourism market then,
This is a tragedy!!
Whacky private sector again.
Until we have Consumer Protection legislation in Cayman we will continue paying more for everything because vendors will charge whatever they want. Even KAABOO tickets are higher here than anywhere else. People can charge whatever they want and either run the small guy out of business or pool with a bunch of other like minded business people who all artificially inflate prices.
Your dollar is pegged to the US dollar and most imports come from the US, yet your inflation is running about twice as high. This is hard to explain in a free market. Sure looks like it could be price fixing among the local merchant cartels. BTW, we’re paying $1.95 for gasoline where I live in the US.
A lack competition is a big problem. Grocery stores and gas stations are a cartel and utilities a monopoly.
Not helping is a gold digging and inept OffReg.
Go figure!!
And how many people said if you bring in a minimum wage, inflation would go up? Anyone…….*crickets.
And it was also suggested, once you bring in minimum wage, the only minimum wage goes is up. Guess what happens when you are forced to pay workers more. that’s right, ladies and gentleman, the price of goods goes up and it again raises inflation.
never let government meddle in business. Their business is to keep society running, not what society does, that keeps it running. IE. stay out of business decisions.
If greedy Caymanian business owners didn’t insist on ever higher profits without rewarding their staff appropriately, then a minimum wage wouldn’t be necessary. But when the service industry almost exclusively relies on an outdated and unfair gratuity system that allows employers to pay appalling wages, scam pension and other ‘costs’ from low paid workers, then what did anyone expect.
Monopolies add to the problem, there isn’t any fair competition on Cayman, from CUC to bar and restaurant ownership, no one is forced to compete for their market share so prices continue to rise.
Sooner or later tourism will suffer, because even the affluent middle classes need to watch their pennies.
Prices increase because owners can use wage increases as an excuse to increase prices. Have government freeze prices to get out of this vicious cycle. The only people that lose are the owners who may need to belt tighten the same as their workers have over the past 30 years. If the owners don’t like it, they can sell to more decent owners.
why should a business owner be penalized for owning a successful business. you sound like bitter grapes. And minimum wage DOES cause inflation. See Canada for example is a prime reason why you don’t artificially increase minimum wage.Now their government is realizing they made a huge mistake. too late now.
Freezing consumer prices is not the same as wage increases, but enacting both in tandem would right the ship ever-more so…
6:57, Problem in Cayman is that Caymanian business people will not / not pay a livable wage. Greed runs rampant in this so called Christian country.
Amen
cost of living or doing business has never been tackled by ppm.
just like their uber decision, they prefer the easy option of maintaining local cartels.
So true. Pensioners must now be beggars to survive. No less than $3,000 month is needed to live here any more.
Look at this US article:
“one in four residents live below the federal poverty line, the shutdown adds urgency to a long-standing debate about what a safety net in rural America would look like, and whether there are ways to construct programs that would be more immune to the politics of the moment.
One solution increasingly becoming a part of the mainstream political discourse: Universal Basic Income.”
We really expect parents and those with responsibilities to work in hotels for $4hour??
Only those with no local mortages and with big currency exchange rate benefits can afford to work in that slave labor in Cayman. Shame shame
I’d like to point out that many individuals working for those wages are also willing to live 2 to 4 people in a single room because they can’t afford to rent a room of their own. Let’s be thankful some are willing to live in conditions like those, else the cost here would go up dramatically – business owners couldn’t find cheap labour.
I don’t think “willing” is the appropriate word. If you are promised $6 an hour and you come from a country where that is worth 4 times as much as in Cayman, and then end up with 4 people in a room because you weren’t informed of the living costs, then that that can hardly be described as a choice people make willingly. At $6 an hour in a 40 hour week you make barely 12.5k a year. Even if you wanted to quit that lifestyle, you’d have to save for years to even afford to fly back wherever you come from. That’s exploitation.
“Working Homeless” is the new reality. soon come. http://www.hawaiinewsnow.com/2018/12/18/every-hawaii-residents-are-homeless-thats-highest-rate-nation-new-report-says/
Haven’t you heard from wall-street that it is fashionable to not own a home. Renters are the new hip people…yeah right.
That $4 and $6 Minimum Wage Law must be repealed . Or tripled if we are to live.
Who the hell cares as the fat cats are getting their sweet deals, screw the rest. As for the old timers, might as well let them die off so there is to have to spend on them.
greedy merchants! period??
and no real competition.
I’m not even reading this article. This is the most obvious thing. No one cares about the health of the overall economy because a good income, the kind your parents were supposed to be proud of if you earned, has never bought less. Government does not care about this and for that alone they should all be voted out. Stop pocketing surpluses, give the money back to the people, and that means give businesses breaks and force them to cut prices accordingly. They had years to build up a grudge they weren’t making enough money and got help from the government and they’ve had years more now to make that money back from the lean times. They’ve ALL had their share, you never hear the usual kleptocrat suspects talking about how hard it is to make millions anymore. That is all OVER! Now it is time to PAY YOUR EMPLOYEES!!!
You didn’t read the article, but made assumptions that supported your political views. I didn’t read your response, because I made assumptions that it was meaningless.
Oh boy. That art!! MLAs get coat of living salary increases when civil servants get them.
But do the maby civil service Retirees get increases?
Go figure that one out.
It’s a runaway train killing the average Caymanian.
Please staff the NAU with 50% more employees and 100% more funds as the poor is getting poorer and the rich richer while the middle class is shrinking by the day.
Well done Alden. Your arrogance is actually destroying your people.
How about getting some of the able-bodied up off their asses and into the job market? Wouldn’t that serve all of us better than expanding a broken social service program? You would likely be shocked if you knew just how many working and nonworking folk are exploiting the NAU.
Government has all the control it needs or could ever dream of through the Immigration regime. Ready access to low cost workers keeps wages artificially low and is destroying the ability of most Caymanians to dream of an increased quality of life.
Therein lies most of the problems in Cayman today. It is cheaper for Caymanian people and Caymanian business to hire low cost workers from far far away places.
You cannot blame the low cost worker, as they would not be here unless they were offered a job – in most instances by a Caymanian or Caymanian controlled business – think about it.
I am however glad that I do not have to travel 7,000 or 8,000 or so miles to find decent work to support my family back home – didn’t us Caymanians once go to sea and send money back home?
Successive governments have chosen to continually add foreign low cost workers and give Caymanians a chance to join the ever growing list of becoming reliant upon NAU/Social Services. Am I right or am it right?
And then they give the low cost workers status, making the problem much much worse.
CUC 30%…………and yet the power outages persist.
It kills me how in our bills each month it shows we pay for the fuel to make the electricity and then on top of it we pay for the electricity…
Tough, thats the way it runs in Cayman!
I know and Sun and wind is free!