Data suggests Cayman can sustain $10 minimum wage
(CNS): Pressure from the business community led the Minimum Wage Advisory Committee (MWAC) to recommend an increase to the national basic pay of just CI$2.75 per hour, rising from the current meagre CI$6 to $8.75 per hour, even though their research and data from the Economics and Statistics Office indicated that businesses could manage an increase to $10 without undermining the economy. But MWAC Chairperson Lemuel Hurlston said they recommended the lower rate due to the risk of businesses passing on the costs to customers.
According to the report, which the committee finalised in October but was only made public this week, in their submissions, many larger employers, in particular the major supermarkets, said they could absorb as much as $12 an hour without passing the costs on to shoppers.
Speaking at a press briefing this week about the findings, MWAC members and government officials highlighted various parts of the public consultation that indicated the economy could easily absorb a higher rate without serious consequences. Nevertheless, the committee decided that CI$8.75 was a fair number to recommend.
Defending the decision, Hurlston said he did not think the committee had low-balled the recommended rate. “We don’t consider we have gone low,” he said in response to CNS questions, noting that it was very near the upper limit that some had suggested during the public consultation and the model created by the ESO. “We know that inflation is the elephant in the room.”
Hurlston said he was aware that some people would think it was too low. However, he pointed out that the committee’s findings were advisory, and if the government does not think the recommended minimum wage is generous enough, it can make it higher. He noted that Cayman was playing catch-up with its minimum wage and said the jurisdiction had a history of waiting until things were in dire straits before acting.
The International Labour Organization, which the committee consulted during the review process, recommended a new rate of at least $10.50 per hour. The ILO found that “letting the nominal floor rest at the constant rate of $6 per hour” had led to a significant decline in the purchasing power of the minimum wage, which lost 18% of its value between 2016 and 2022, and by 2023 the higher inflation rate increased that loss to 31%. The minimum wage is now slightly less than 28% of the average wage in the economy.
“Compared to regional and international standards, this is a very low percentage,” the ILO found, noting that there are only seven countries in the world with a ratio as low as in the Cayman Islands, and most countries have a ratio of around 50%. Therefore, Cayman’s minimum would need to be around $10.50 per hour to get close to half the nominal hourly mean wage rate.
Having fallen behind inflation, which is still increasing, the decision to increase the rate to just CI$8.75 means the minimum wage here will have almost no chance of catching up to the cost of living and will still be woefully inadequate.
In the survey of over 2,000 households conducted by the MWAC during the review, the average suggested minimum wage was CI$11.09 per hour, with the majority (44.2%) proposing a minimum wage of CI$10. Only around 350 businesses responded to the survey, and the average suggestion from that section of the community was about $8.50; some small service businesses suggested it should remain at $6, while other businesses suggested as much as $12 per hour.
Around 10,000 people and institutions participated in the overall public consultation and some 5,000 submitted answers to the open online survey. The average proposed minimum wage was between CI$10 and CI$11 per hour, and the majority (56%) indicated that it should be increased by at least $4.
The Chamber of Commerce said its members only supported an increase to $8. However, in one survey, fewer than 200 employers said they would increase prices or reduce their workforce if the minimum wage increased by CI$3 or more per hour.
However, most of the data that the committee collected appears to support a $10 minimum wage. This still only translates to a weekly pay packet of $400 for 40 hours of work, compared to $240 at the current minimum wage, or $350 at the basic wage of $8.75 recommended by the MWAC.
Less than 23% of those currently earning less than $8.75 per hour are Caymanian, so this recommended minimum would have little impact on local families. However, an increase to $10 could see more unemployed or under-employed Caymanians take up basic wage jobs.
Many of the employers paying very low wages are small business owners who are exploiting foreign workers from very low-income countries. This importation of poverty for low-paid unskilled work is fuelling many of the socio-economic problems across the country, such as a growing inequality gap and a rise in poverty on the islands. It is also increasing the pressure on local infrastructure, including hospitals, roads, supermarkets and affordable accommodation.
See the full report in the CNS Library here.
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You can raise minimum wage to anything you want. It helps with purchasing power over seas. But if it costs x to do business adding more expenses to the business owner, we have no choice but to carry the cost to the consumer. It’s just economics.
U.K. minimum wage is CI$12.20, much higher than Cayman.
U.K. average monthly salary CI$3107, significantly lower than Cayman.
Cost of living in the U.K. is far lower than Cayman yet they choose a minimum wage far higher than ours.
If Cayman wants a society where we can feel safe and also feel we are fair to those less privileged, then if businesses say they can’t afford a higher minimum wage, we need to look at changing our model. The “Cayman miracle” model of low taxes and everyone for themselves is simply not for for where we are today or want to be in the future.
I constantly seek to have conversations about this but talk is cheap, nobody wants to take brave action.
…and so the pot keeps boiling up the frog.
Don’t forget the taxes that are levied as well. The minimum wage you referred to, works out to be CI$10.25/hr after taxes. So do you agree with a CI$10/hr minimum wage for the Cayman Islands then?
A minimum wage earner in the U.K. pays an effective tax of 12.2% on their earnings. Cost of living savings for the U.K. are far in excess of that,
Instinctively (and the purpose of my post making the comparison), I’d say a starting point is that Cayman needs to have a minimum wage well over the UK one.
Oh, and all laws related to labour must be enforced, as otherwise honest business owners are at an unfair disadvantage.
All USD amounts,
members of parliament and other cabinet members earn approx $375,000 a year, JuJu right there with them with travel expenses etc.
The US president earns $400,000 a year.
The average US senator earns approx $190,000 a year.
The current minimum wage in the Cayman Islands is $7.50hr
The Federal minimum wage in the US is $7.25hr although many Sates have own minimum wage which in most cases is much higher and in 7 states double that.
Any questions ?
Yes – questions!
Since you have added in all the allowances for MPs and Cabinet members in the Cayman Islands, what is the aggregate sum with all allowances provided to the other positions used in your example?
The allowances paid to MPs in Cayman are paid out for staff, office, travel, etc and are not part of the “take home salary”. For example, the President of the United States also receives $50,000 for expenses, $19,000 for entertainment, and given access to a $100,000 non-taxable travel account. This then pushes your own salary calculations to $569,000/year.
The Cayman Islands Premier in 2020 Premier Alden was paid an additional $42,000 annually as an entertainment allowance. As a government minister, he was also paid between $48,000 and $96,000 annually as a ‘constituency allowance’.
https://www.caymancompass.com/2020/08/10/cayman-islands-legislators-salaries-difficult-to-pinpoint/
Add and shuffle all you like 8:58, what I posted were averages available from what appeared to be reputable sources online, – what you seem to missing in the chasm of inequality and being told that’s more than enough, – I will concede however each jurisdiction will of course be subject to its own economic dynamics. Thank you for your note 👍
And half our paycheck goes to taxes.
Questions:
1. Did these so-called advisors establish what a Living Wage is for the Cayman Islands?
[An accepted general definition of Living Wage is: a wage that is sufficient to provide a worker and their family with a basic standard of living. This includes covering the cost of essential needs such as food, housing, healthcare, transportation, and other necessities, as well as some discretionary income for participation in social and cultural activities.]
2. Did they establish what the poverty-level income is for the Cayman Islands?
3. Did they establish a factor to adjust for inflation from the time the current minimum wage sum was established until the present, to arrive at what the wage figure should be now?
Or did they just pull a figure from their nether region, guided by input therein from the avaricious ones in our business sector?
The cost of living in the Cayman Islands is high. For an interesting comparison, let’s look at a high cost of living state in the USA: California.
Starting on Jan 1 this year, California increased their minimum wage to USD$16.00 per hour.
When comparing, bear in mind that the cost of living in Grand Cayman is at least 20% higher than in L.A.
It is a bloody national disgrace how the working person is treated here, in what supposed to be the wealthiest country in the Caribbean.
Now that the Cayman Islands has a National Dish, I propose we name candidates for the title of “Cayman Islands National Disgrace”. Among some the candidates would be: public transport, “promising” politicians, environmental protection, crime control, and the minimum wage.
I should trust that Juile and her government will override the advisors and do what is right for the people.
What source did you use to state that “the cost of living in Grand Cayman is at least 20% higher than in L.A.”? Curious because that is not what my research says…
Simply, if you want a “living wage” upskill yourself and do not remain in a “minimum wage” job for your entire life.
Most of the answers to your questions are in the report from the Committee. Happy reading!
amenn
You mean 125% profit margins now exist!
or even higher.
The Minimum Wage should be Above the NAU monthly payouts..
ie $4700month.
Absurd! Truly, get educated.
Many countries, regionally and internationally, have dual economies and currencies to benefit their own people.
Why not in Caymans?
Why not lease lands vs sell off to inward speculators?
etc
So this Chairman messed us up again?!
That was not his solitary decision to make when the Chamber pressured him to drop it!
Of course the businesses will pass on the costs regardless.
Just give us the $10 as a minimum brudda.
And that’s NOT even a Liveable Wage!
what will happen when some people send that money home, and the exchange rate sets in?
Classic case of Cayman Islands Government never doing ANYTHING right the first time, IF at all!!
Just a few years ago the minimum wage was raised to the current rate of $6 per hour.
Why didn’t the “powers-that-be” do a comprehensive, graduated minimum wage structure then, with allowances for cost-of-living adjustments?? Why, a few years later, are we now trying to re-invent the minimum wage wheel??
Why??? Morons in charge at CIG!!
The national wages were actually DROPPED to $4.50 and $6 then.
I made more working summers in high school in the 70s.
Shameful slave labor system, when they admit that so many are now paid a “Starvation Wage”!
So go back to your own country and earn more money then.
If all the low-wage earners in Cayman left, you would be back carrying cow s..t pots and killing Turtles to survive as you will not take the jobs available. Your attitude of “I was born here – I deserve a job but I have no education, experience, ethics…” Spare me your indulgence.
And so the blanket prejudiced expat ignoramus emerges
Business owners seem to forget they don’t pay 30 percent income tax like the rest of the world. So if your business can’t afford to pay a wage someone can live decently on, it probably shouldn’t be in business.
It is all indirect taxation, but you would know that already with your insightful comment.
Exactly! But the business keep this Indirect Tax for themselves!!!
So many foods are duty free, yet sold at beyond premium prices!!
Not pure greed.. Dirty Greed!
$10 an hour in Cayman is avid poverty.
Why not 50.00 an hour? At least someone could afford a low income house on that.
May be the “experts” can determine whether “Cayman” can “sustain” 50.00 an hour.
Bunch of idiots…
Suggestions like this diminishes the seriousness of the topic. To suggest that low-skill, but necessary employment start at over $100,000/yr is not a serious or educated comment.
My question is who will be monitoring the loss of redundancies, increase in fees, increase in cost of goods?
Like the plastic bags fiasco. Why do you have to pay for either a plastic bag or paper bags at the supermarkets? If we are helping the environment out, then plastic bags should be banned all together and paper bags are provided free. I wouldn’t expect to go to Wendy’s and I don’t get a fork to eat my salad with?
Redundancies should be eliminated whenever feasible. Their presence is a huge problem. (e.g. Four ‘supervisors’ watching a single worker perform a task – which I witnessed 20 minutes ago).
I guess you’re not old enough to remember when we moved from paper bags to plastic in order to save the trees. I guess we’re just going in cycles of whats considered ‘sustainable’!
rich ppl playground.. unless u working for rich at minimum wages…indirect message..”we dont want you here!” lol
The problem is we should scale up not one big bite.
2024 $8.75
2026 $10.00
I would have done it this way if I were doing it.
2023 $6.00
2024 $7.25
2026 $8.75
2028 $10.00
This allows businesses to adapt so as to have the least amount of impact on the local cost of living.
The idea SHOULD BE not to raise the cost of living as it would all but offset for those getting an increase the overall increase in wages.
Maybe the biggest take away from all of this is that Mr Hurlston is willing to schedule and attend a press briefing. ⚖️
But not a real PUBLIC meeting.
why not!!
$10 is a good start. Anything less is rubbish and the powers to be know that.
Says the unemployed basement dweller.
You full of shit! Everyone that is not an owner operator thinks the owner operator is rich.
If a business cannot pay a living wage, then it should cease to operate.
When I was 15 and had my first job I did not expect (or receive) a living wage. It was an entry level job to save for college. After getting education and experience I then had higher expectations.
World is an entirely different place now and the gentrification is much more severe here than even it was 10 years ago.
9:21 here. Yes, I fully agree with your statement.
Amen.
If there is a $10.00 minimum wage, the business owners will simply raise their prices to cover the loss. Expect to see $9 Whoppers, $6/ gallon gas, $11 beer & $7 Patties.
Not at all, they would be quite happy with 30% margins instead of 35%
You mean 125% profit margins now exist!
or even higher.
Fine. Do you want Caymanians employed, or continue to be NAU recipients? If we want Caymanians employed, we have to pay a living wage. Simple as that.
I would like to see a compilation of the total costs — including health care — of those on NAU. Nothing against them. Those that truly cannot work should be cared for. It is the fate of all of us eventually. Those that are capable of work, but cannot live on $6.00 an hour have a better deal with NAU. NAU isn’t the problem. We are the problem, if we don’t want to do our share of paying for a living wage for Caymanians, and perhaps, eventually changing expats for Caymanians in the hospitality, restaurant, bartendering AIRPORT SECURITY industries. This would result in less traffic. Expats aren’t the problem. Not paying our own a living wage is the problem.
i have been here for 24 years and try my hardest to employ locals before any one else.
unfortunatley the relibile kind are few and far between.
whilst employing locals is always my preference there needs to be a shift change in their attitudes towards permanent employment
Exactly!
Almond Milk retails in the US for $4.17USD. In Cayman it is $9.49CI. Of course supermarkets can absorb the minimum wage increase to $10 but I will bet my Almond Milk they won’t.
Almond milk is made in the US. Your almond milk needs to be shipped. Your example is not logical.
You do realize that everything consumed in Cayman is imported? Care to give a more logical example?
Nope. As you said, and I agree most everything is imported into Cayman, you supported my point, thank you!.
That’s insane, almond milk!!!! How long before Cayman collapses due to sky-high prices?
Almond milk? Who cares? You pay ci$150/m for cell service which costs £10/m in the UK…. now that’s the real rip off!
Milk, like rice, chicken and many other items, are DUTY FREE.. where is the savings? The shops keep it!!
Tell us you can’t do basic math without telling us you can’t do basic math.
OK I’ll start you off. The employee gets 3 dollars more an hour, he sells 30 burgers and hour, how much more does each burger need to cost to cover his salary?
salaries have gone nowhere…cist of livingbthrough the roof! lotsa greed taking place…ZZZZZZZZZZZ
Whatever the increase in minimum wage it’s a given that businesses will pass the cost on to customers. Businesses in Cayman are all about making a fast buck, especially on the backs of cheap workers. It’s high time the mindset changed to businesses becoming a more equitable place for their workers and not just a get rich quick scheme.
Equitable place for workers? Put away the drugs Commy.
Because the workers have invested zero capital into the business and if the business fails, they can just move on.
Merchant class villainy!
Then stop importing Jamaican culture!
The last paragraph has some merit but it is not just small business owners that pay minimum wage. There are larger companies doing the same thing and they have more work permit holders on staff. I won’t call out names here.
The problem for small business owners is not only an issue of economies of scale but no protection for their industries.
Larger companies with deep pockets diversify their businesses or help cronies set up shop.
The small business sector is struggling and even if they paid a $10 minimum wage in the hope of hiring a Caymanian it is still paying less than what they can get from NAU.
The revamped NAU is now paying more and assisting with utilities.
We continue to not address the real problems and throw money at the same problems.
Inflation is out of control and the cost of doing business has increased.
Therefore minimum wage is the tip of the iceberg.
Whoever is in charge at NAU need to be fired. A terrible job they are doing over there!
11 @ 12:49pm – All those in charge at CIG – both politically and administratively – should be fired!!
Can anyone name ANY CIG Department which delivers efficiency, no BS red tape, straightforward processes, same answers no matter who you may ask and totally satisfactory services every time??? Can’t even reach a live operator at GOAB (message says “You’ve reached the Cayman Islands Government”)!!!
References to the press button smiley-face customer service gauges do NOT count, Mr. Manderson!!!
The supermarkets have already said they can handle a raise to $12…. let that sink in ladies and gentlemen. They can handle it, they should handle it but they do not and will not unless forced to.
Every single person on these Islands buys groceries and look how much they must be gouging us. This is like the wild west of capitalism and they are just openly saying it. If they can handle a 100% increase in wages without even needing to pass it on to the customers then how much margin must they be making?????? in a lot of places on this planet the way they gouge us would actually be CRIMINAL. As in, ILLEGAL.
Disgusting.
Read the report. What the Supermarkets actually said was CI$8.00-$9.00/hour before it would affect prices. Nowhere in the report does it quote anyone as having said they can handle a raise to $12 without passing it on. XXXX Supermarkets have already absorbed port fee increases of up to 400% this year. Any increase in anything related to food imports will be passed on to the consumer at the end of the day.
So why is Milk so expensive but duty free?
Ask it LOUDER
Shhhh. The propagandist will be hurt because his falsehood is exposed.
Lemuel Hurlstone might have said that, but it’s an irresponsible and inaccurate statement and does not appear anywhere in the report
Bingo. Read the report. It does not say anything about supermarkets going up to $12. Also the $10 mark was the AVERAGE of what company said they could absorb before passing along costs or laying off staff. That means there are a LOT of businesses out there that will raise prices and have layoffs between the 6-10 mark. Not saying it’s right or wrong but the conclusion drawn from the data does not hold water regarding $10/hr.
I think for small businesses, $8.75 should be the minimum, and for larger businesses and companies, $10 should be the minimum if the data shows they can handle it. And this is assuming that the cost of living won’t be severely affected.
How do you define “small business”?
It is already defined in the T&B Licensing at dci.gov.ky.
As defined in regs!
Well, well, well. Great reporting, CNS!