Column: Thriving Middle Class,Thriving Economy

July 6, 2015

[Opinion column written by BPSU President Jason Hayward]

A thriving middle class generally translates into a thriving economy as the middle class forms a significant portion of both a country’s consumer base and its level of productivity.

The Center for American Progress highlights the importance of a strong middle class as it:

  • promotes the development of human capital and a well-educated population;
  • creates a stable source of demand for goods and services;
  • incubates the next generation of entrepreneurs; and,
  • supports inclusive political and economic institutions, which underpin economic growth

The combination of the growing unemployment and underemployment levels in Bermuda is continuing to cause the middle class to shrink. While there is no official definition of measurement of what constitutes a middle class, some generally accept that a country’s total middle class fall approximately 50 percent above or below the median income.

In the recently released Bermuda Job Market Employment Brief, Bermuda’s median annual gross income for 2014 was $63,897, an increase from the $60,668 that was reported in 2013. I, however, do not believe that this increase occurred because of a 5% rise in wages as purported recently by Nathan Kowalski, the co-chairman of the Chamber of Commerce’s Economics Committee. What is a more logical explanation for this increase is that it is probably primarily the result of a decline in jobs in the lower end of the middle class. This is highlighted in the fact that of the 802 jobs lost in 2014, 336 were clerical occupations and 218 were in construction. As jobs at the bottom fall the median income naturally shifts upwards. The significance of this shift is that as the median income rises, the level of persons that fall within the middle class income range decreases.

The erosion of the middle class slows economic growth and leads to increased Government spending on social welfare. This can be seen in Bermuda as the demand for financial assistance has reached unprecedented levels.

It is imperative that Government put policies and legislation in place to ensure both the protection and development of Bermuda’s middle class. While Government must be focused on creating an environment that stimulates job creation, it is important that these employment opportunities translate into growth in the size of our middle class. In addition, Government must also ensure that our people have access to higher education and training in order for our labour force to be adequately prepared to take advantage of these opportunities.

While worldwide the middle class is extremely vulnerable, the middle class is generally better off when they are supported by strong unions. There are roughly around 9,000 unionized workers in Bermuda the vast majority of which fall within Bermuda’s middle class. The attacks on the wages and the jobs of unionized employees are a direct attack on Bermuda’s middle class and ultimately an attack on the entire Bermuda economy.

All Bermudian should want their fellow countryman to have good jobs, good wages and good opportunities in Bermuda as the wider community benefits when they do; our economic future depends on it.

- Jason P. Hayward 

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Comments (25)

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  1. Well, this is a bit too much to swallow. “It is imperative that Government put policies and legislation in place to ensure both the protection and development of Bermuda’s middle class. While Government must be focused on creating an environment that stimulates job creation, it’s important that these employment opportunities translate into growth in the size of our middle class. In addition, Government must also ensure that our people have access to higher education and training in order for our labour force to be adequately prepared to take advantage of these opportunities.”
    Mr. Jason Hayward all what you’ve suggested is already in place and it is up to the individual/s to grasp hold of the opportunity/ies. We can not continue “blaming Government.” If not mistaken, the vast majority of people that are working jobs on the lower rungs of the status ladder, are foreigner. These jobs should be held down by Bermudians… We can go just about anywhere and see people here taking advantage of an opportunity. For one reason or another, our fellow Bermudians don’t want to accept certain jobs but rather complain, “I can’t find a job.” If a person isn’t earning enough money get a second job or seek Government assistance.
    I get a little pissed-off hearing people complain about the same stuff over and over, week in and week out for years and why is this? Them that are from elsewhere here earning menial wages “make do” with that wage plus are able to send money back home to help their families.It’s U.S.A dollars, and Bermuda Government/Bermudians can and should be earning.

    • Portia says:

      Raymond, the only reason that foreign workers are able to “make do” on menial wages here is because, in many cases, they are single people living 8, 10 or more of them together in a one or two bedroom apartment. This situation is not feasible or practical for most Bermudian families.

      In addition, if you are a single parent, some of these “lower rung” jobs are not always suitable. A pot washer, for example, often works until 1 am in the restaurants, which is not practical if you have a young child at home.

      It is not always a case of Bermudians being lazy or too dumb to do a job. Too many people do not understand (or choose not to understand) what is really going on in this Island.

      • serengeti says:

        Bermudians can’t take jobs because they are single parents?
        Oh right.
        But when anyone suggests educating Bermudians as to the financial responsibilities of raising a child, they’re labeled as ‘racists’.

        What you’re really admitting is that Bermudians will find reasons and excuses to avoid unpleasant and lower paid positions. Nothing wrong with that, as long as we don’t have to listen to whines and excuses about how there are expats employed in those positions. As you indicated, Bermudians are not willing to do them.

        • Portia says:

          “What you’re really admitting is that Bermudians will find reasons and excuses to avoid unpleasant and lower paid positions.”

          No, I outlined reasons why such positions, in many cases, do not benefit or are not feasible for Bermudians with families as opposed to how they benefit foreigners without families living here. There are many Bermudians today who are working those “unpleasant and lower paid positions” simply because jobs are scarce, yet clearly they are not coming out ahead, nor are many of them able to take advantage of the situations I mentioned above, as foreign low-paid workers are.

          And a person can become a single parent through divorce, and is now faced with the challenges of a single income household, so it does not necessarily mean that they are uneducated or were financially unprepared when they were married. Such thinking merely perpetuates the stereotype of Bermudians as lazy and underserving of anything better.

        • PBanks says:

          Now, be fair here. There’s truth in Portia’s statement. There are some jobs in Bermuda that may be difficult or financially impossible to take if you’re raising a child; if the cost of transport and daycare outweighs the wage you’d get from said job, then it doesn’t make sense to take it. It’s doubly true if the job requires (unpaid) training like the waiter/server programme they had a couple years back.

          Your side of the coin also is valid; there are several jobs that some Bermudians will look down upon and see as ‘beneath them’, even if it will provide at least a little bit of income to stay afloat. For that, some of us need to swallow our pride and just do what’s needed.

          • How the Hell someone raising a child, paying $2000.00 for rent and making $15 an hour supposed to survive.

          • Zevon says:

            It’s a weak excuse. At the start of their career, nobody earns enough to pay for a family. Anyone with any sense waits until they are more financially well-established, whether that’s their late 20′s or their 30′s. But Bermudians are “too important” for that aren’t they. They insist on being entitled to have as many kids as they want at any age they want, and if they can’t afford them, whose fault is it? Oh, expats of course, because “how is a single parent supposed to take a job like that”. It’s a pathetic excuse for failing to do the most basic things to organise their lives.

      • TonyC says:

        “Too many people do not understand (or choose not to understand) what is really going on in this Island.

        What is really going on?

        • If an individual requires x amount of dollars per month to live on and are earning less than the x amount required then to fill the void go seek government assistance…Just like others have done.
          Complaining daily is like pissing into the wind. There are options available to all Bermudians…

          • Just One says:

            “The erosion of the middle class slows economic growth and leads to increased Government spending on social welfare. This can be seen in Bermuda as the demand for financial assistance has reached unprecedented levels.”

  2. Reality Check says:

    “…roughly around 9,000 unionized workers in Bermuda …”.

    About 6,300 are employed by Government.

    There were only 33,475 filled jobs in Bermuda in 2014.

    Go figure.

  3. Jeremy Deacon says:

    It is so easy to say “Govt must ….’ and much harder to actually come up with ideas …. which are sorely missing here.
    What he overlooks, IMO, is that there will be no economic growth with a declining population – it is simply, Bermuda needs more people.

    • Mike says:

      You are correct Jeremy. Bermuda does need more people.

      The question is though, “doing what?”.

      We continue to lose jobs. 800 or more since last year. We need another string to our bow other than the business sector and tourism if we are to bring people here.

      And I don’t see that happening.

    • North Rock says:

      There are 2 things going on here. First, Jeremy and others (including Mike Fahy) are correct…Bermuda needs more people. It doesn’t automatically follow that those people will require jobs…we need more people to live here and spend money here which could just as easily come from wealthy individuals who live here or the families of people who work here.

      The job thing is changing…but very slowly. For years the policy or concept of Bermudianisation has moved from ‘if there are 2 equally qualified job seekers, the Bermudian gets the job’ UBP philosophy, 1974. Its become “if a job is available, the Bermudian should get it – no matter what”. Today, that cannot work no matter who you are or what Party is in power…we’ll go broke following that line and I’d say we’re pretty close because we did…

      Some Bermudians are beginning to realize that they better grab what they can and work themselves up the ladder or pray to God that the BIU and the PLP try to protect them hand it to them on a platter ! Greece 2015….

    • clearasmud says:

      @ Jeremy That is a gross over simplification of our issues. Please tell me what these “more” people will do! People won’t come unless there are jobs. Jobs must be created first so where are these jobs coming from!

  4. Chris Famous says:

    Jeremy perhaps you should direct those comments to S. Cooper

    • @ Chris. I may have misunderstood you but in ref. to, (A) S. Coopers, many if not all are/Bermudians spouse…

    • David Henry says:

      Chris, I don’t speak for Jeremy, but I’m pretty sure he does NOT mean, “Bermuda needs more people… on financial assistance”.

      Are you in disagreement with S. Cooper that people should acknowledge that Bermuda is an extremely expensive place to live, and to really think things through before starting/growing their family?

  5. Onion says:

    It’s easy to write empty platitudes about the middle class. In terms of actually implementing policies that create a larger middle class the OBA is doing it through the NTB, tourism revitalisation at the high-end (where there are middle-class wages, and attempting to attract back business).

    Let’s not forget that our middle class was decimated by the combination of bad land policies, hostile anti-business attitudes, and anti-immigration actions by the last government (who ironically allowed working class wages to be eroded by third-world competition).

  6. swing voter says:

    and to think this intelligent innovative young fells used to work for uncle Bob!

  7. Unbelievable says:

    Giving all this kind of fluffy language is all well and good but if you don’t have any solutions to the problems you highlight then it kind of makes this all pointless.

  8. Kangoocar says:

    People like Jason Hayward must live in coo coo land??? How on earth can he with a straight face write an article like this?? It is a well known fact that he is an ardent supporter of the very plp that decimated the middle class!!! More people under the plp became poor and only a select few became rich ( friends and family ) because of the policies of the plp!! The sad thing is, it was mostly the plp supporter that became poor!!! The vast majority of unionized members now work for government and the OBA is to spineless ( for political reasons ) to make the cuts needed to put the overbloated CS to the size in needs to be, therefor protecting Jason Hatwards income!!! But not to worry because the day is coming soon that even he will become poor because the when we become the next Greece and Puerto Rico, it will be out of everyone’s hands locally when the British step in to correct the situation!!! I can see in the future many riots in rebellion of what the British will do, but they are not going to care in the least, and sadly that is what it is going to take to turn the ship of bad around!!!!!

    • Chris Famous says:

      Considering the brits are deep in debt themselves they are no great example to follow

      United Kingdom Government Debt to GDP 1980-2015 | Data | Chart | Calendar
      The United Kingdom recorded a Government Debt to GDP of 89.40 percent of the country’s Gross Domestic Product in 2014. Government Debt to GDP in the United Kingdom averaged 49.48 percent from 1980 until 2014, reaching an all time high of 89.40 percent in 2014 and a record low of 31.30 percent in 1991. Government Debt to GDP in the United Kingdom is reported by the Eurostat.

      http://www.tradingeconomics.com/united-kingdom/government-debt-to-gdp

  9. Kangoocar says:

    Ship of BDA around

  10. Jurist says:

    If the PLP were the govt now, there would be no middle class.