Burchall: Falling Wages & Rising Deductions
[Written by Larry Burchall] Yesterday, on a radio talk show, Mr Chris Furbert, President of the Bermuda Industrial Union, pointed out that thousands of members of the BIU have been severely impacted by the state of Bermuda’s slowed-down economy and the government’s decision to cut back on some government expenditure.
In the BIU Hotel division, workers are in the second year of a negotiated wage-freeze. These workers have not had a real pay increase since 2008. By agreement, in 2010, Hotel workers whose pay has been frozen will be exempt any Payroll Tax. This means that they are not affected by the one percent Payroll Tax increase that the Minister for Finance ordered in the 2010/11 Budget.
Other BIU members, including government workers represented by the BIU, are affected by a general government ban on overtime that is known to have been imposed several months ago. This general ban was part of the reason underlying the labour dispute, three weeks ago, between workers and management in the Parks Department.
In addition to the Parks Department, this overtime ban affects blue collar workers in Works & Engineering, Marine & Ports, Public Transportation, and the Post Office, and wherever else government workers are represented by the BIU.
Within the Civil Service, where white collar workers are represented by the Bermuda Public Services Union (BPSU), there is an overtime ban in effect for all those Civil Servants who are normally eligible for payment for overtime or extra time. The same ban applies to those teachers and staff who are represented by the Bermuda Union of Teachers (BUT).
The only group not severely affected is the Bermuda Police Service. But even here there is still a strong effort to limit overtime. However, this financial restriction is always balanced against the need to fight the recent and unprecedented surge in crimes of violence.
Despite these wage freezes and overtime bans, thousands of workers are still finding higher deductions being taken out of their pay. The increased Payroll Tax joining with the increased health insurance premiums mandated by both Government and the private health insurance providers affects all wage-earners.
Government’s basic monthly H.I.P premium went up by 24% as of 1st April 2010; going from $241.15 to $298.93. Private health insurance policies, which can and do vary in the health benefits agreed and paid for, are said to have increased by between 9% and 20% as of 1st May 2010.
On 1st April, Government Payroll Tax increased 21%, going from 4.75% to 5.75% of an employees pay. This Payroll Tax increase meant that a person who was earning the median wage of $55,000 a year went from paying $2,612 payroll tax per year to paying $3,162 tax per year. This is an increase of $550 per year, or an extra $10.58 per week.
