(CNS): Lemuel Hurlston, the chair of the minimum wage committee has said the recommendations that will be made to government in relation to the mandatory basic pay will be realistic. He told CNS this week that there is capacity in the business community for a notable increase given how inadequate the current rate is.

Given that this is the first review since the national minimum wage was first implemented seven years ago at just $6, which was meant to be a short-lived introductory rate, the chairman said the new recommendation will be considerably higher.

Speaking to CNS he made it clear however, that even though the rate was never reviewed a minimum wage “is a floor pay should not fall below not a direction.”

With only a tiny percentage of workers earning as little a $6 an hour a salary, which the ESO has said falls below true poverty pay, there is a lot of room for an increase. The current survey which the committee is hoping everyone will take has already indicated where the line is on increasing the basic pay before employers start passing that increase in the wage bill on to customers and it seems that an additional $3 can easily be absorbed.

Hurlston agreed that given bosses are admitting to being able to manage a 50% increase its likely they could in reality manage more.

The chair also indicated that this time around the committee could recommend government roll out slightly different rates for different sectors. While there could be a lower basic minimum rate for people working in a domestic settings to help families dependent on carers, Hurlston hinted that the security sector could be subject to a higher basic rate given the growing numbers of guards in response to the rising crime and their increasing importance in keeping the community safe.

Meanwhile, Wendy Moore the committees CITA representative said the tourism sector broadly believes that taking 25% of a minimum wage from a gratuities system, while leaving tips alone, has worked well. She said this will probably remain the share bosses will be allowed to continue using to cover what will be a larger bast rate in future.

But she said in many cases now even the lowest paid tourist workers are earning more than the basic minimum and they are still getting gratuities on top of their wages. Moore also told CNS that, “We think it works well” and “the committee is keen not to put to much strain on the tourism sector as it continues the post pandemic recovery”. It is unlikely, she said, that the portion that can be made up out of gratuity programmes will be cut.

However both Hurlston and Moore said that they were aware of how the gratuities in the sector can vary widely. Those getting a share of the grats on top of their salary for cleaning dishes at large resorts such as the Ritz are earning far more from the schemes than some waiting staff in small local restaurants.

When the 25% of the wider gratuities are used to subsidized staff wages at much smaller restaurants and bars it may absorb all of those gratuities leaving them at the bottom of the pay scale. Hurlston said the committee is still waiting for the formal submissions from CITA. But that the association’s contribution will be very important given that the lowest paid workers in Cayman tend to be in hospitality.

But Hurlston also pointed out that pay was also now very low for unskilled workers in the construction sector and that was another area where the committee is taking a close look at the lowest wages.

The chairman said working out where to pitch the minimum wage was not an exact science.

“There is no right or wrong answer to find,” he said. Hurlston explained it is about balancing diverse circumstances that result in people earn fair pay and enough to live on while not causing economic upset.

Though most experts agree that increasing the minimum wage has almost no inflationary impact, the issue for Cayman is not that it would fuel more inflation but how it will impact the far more complex issues here of under-employment of Caymanians versus the use of low paid permit holders.

While unemployment is at an historic low, which should have seen the market drive up wages the ability of bosses to import overseas labour continues to keep salaries artificially low, as well as having a detrimental and wider impact on society.

Hurlston said this was a very “touchy” as well as complex subject. But he added there are expectations that the committee’s recommendations will curb bosses from bringing in workers on very low pay and by-passing potential local workers. He said the committees terms of reference are very exacting and this issue is part of the remit.

Hurlstone said in recent months WORC has adapted its processes and is streamlining how it matches local people to local jobs more accurately. But he said the changes are relatively new and will take time to have a noticeable impact on the workforce. The combination however, of a more realistic national minimum wage and efforts by WORC to place Caymanians could have a significant positive impact on the labour market.

The committee is now urging workers and bosses alike to take the quick on-line anonymous survey to ensure full public participation before they finalize their report in September.

Townhall meetings on the subject in all of the districts are also expected to start in July.