Bi-Partisan Support For Living Wage Committee

June 27, 2016

A motion by Opposition MP Rolfe Commissiong calling for a Joint Select Committee to be formed to look into the the establishment of a living wage for Bermuda passed with bi-partisan support in the House of Assembly on June 17, with the Committee to be formed and then return to the House with its recommendation.

“Imagine earning $200 or even $320 per week and this, before taxes and benefits if any, are deducted,” Mr Commissiong said.

“If earning $35,360 places you below the poverty level in terms of wages in Bermuda then how does one begin to contextualize $5 or $8 dollars per hour being earned by some workers in Bermuda today?

“How would you characterize the above? And as depressed wages and benefits become common place, poverty will only increase and the horizons of our people will continue to diminish. Is this the new normal?

“Are we at an inflexion point in Bermuda whereby a decent and equitable living wage or wage floor may amount to no less than $20 to $25 dollars per hour or higher? That is for the proposed Joint Select Committee to determine.”

Rolfe Commissiong Bermuda June 26 2016

“Many countries, particularly in Europe and North America, have long established the concept of a minimum wage, even though the actual amount may vary from country to country and, indeed, within countries.

“The concept behind a minimum wage is simply to raise those at the lower end of the economic spectrum out of poverty to a level of dignified living.

Mr Commissiong continued, “But here in Bermuda, a country with one of the highest GDP’s in the world, there is neither a minimum wage nor a living wage.

“It is not unheard of for workers at the lower end of the wage scale to earn under $8 an hour in a full time job, which was recently highlighted in a published statement in support of the adoption of a living wage for Bermuda by the Bermuda Trade Union Congress, this amounts to an annual income of approximately $15,000 dollars.”

“It is estimated that the cost of living in Bermuda is some 40% higher than in the UK. What does that mean in reality? It means this – the low-end worker in the UK is better off.

“Does this explain the migration patterns we have seen since 2010 as more Bermudians increasingly become economic migrants principally to the United Kingdom.

“We have seen in effect a brain drain the likes of which is more characteristic of a developing country than the Bermuda we have known. The loss of human capital in this regard has been significant.”

Mr Commissiong’s full presentation follows below:

Mr. Speaker, on the 19th of February 2016 l gave notice before this Honourable House of Assembly, that I intended to move a motion that called for the establishment of a Joint Select Committee.

With your indulgence I would like once again to reiterate that motion:

Whereas, it is acknowledged that unemployment and the underemployment of Bermudians and in particular Black Bermudians continues to persist;

And Whereas, due to the widespread use of foreign sourced low cost labour over the last two decades or more, real wages, once inflation has been factored in, have seen little or no growth;

And Whereas, incipient poverty, the erosion of the middle class and growing despair has led to charities, Non-Governmental Organizations and assistance programmes olf various types being overwhelmed, as growing numbers of Bermudians, including children go without the economic necessities required to lead productive and fulfilling lives;

And Whereas, growing evidence indicates that along with property related crimes, hundreds of Bermudians have become economic migrants and relocated to the United Kingdom;

Be it resolved, that pursuant to the Parliament Act 1957 part IV that this Honourable House call for a joint select committee to examine the efficacy of establishing a living wage for Bermuda.

Mr. Speaker, with your indulgence I will proceed with the following three quotes:

“No business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By living wages I mean more than a bare subsistence level. I mean the wages of a decent living.” - President Franklin Delano Roosevelt. 1933

“No one should be working 40 hours a week and be living in Poverty.” - Secretary of Labour Thomas E Perez of the United States of America

And lastly Mr. Speaker…

“Bermuda should introduce a living wage law.” - Lord Michael Hastings. Global head of corporate citizenship, KPMG, addressing a business conference in Bermuda

Mr. Speaker as legislators we are often called to address wrongs and correct omissions that undermine and at times damage our social and legal fabric.

Certainly our constitution is a living one. Therefore it is our duty to offer remedies to those threats that constitute a challenge to our cohesion as a community and to our most cherished values as a country.

This debate and subject matter under discussion on whether this Honourable House will affirm my request to form a joint select committee to consider the efficacy and implementation of a living wage regime for Bermuda in my view, is long overdue.

Mr. Speaker, approximately one year ago I commenced debate on a previous motion that called for this Honourable House to examine the various impacts that technological advances and disruptions such as artificial Intelligence, various forms of automation, robotics and the ubiquitous spread of software generated algorithms are having on our labour market, our economy and our society.

Clearly, since that time there has been a growing awareness that these impacts or disruptions particularly as it relates to Western style political economies have had a growing effect and have transformed our societies in ways that could scarcely be imagined even three decades ago.

But the role and growth of technology and outsourcing – while key- has been, but one aspect of the monumental changes that have occurred.

Mr. Speaker, importantly we cannot ignore other profoundly disruptive game changing impacts over the last quarter century that have negatively impacted Bermuda and Bermudians.

Some of which were:

  • The growth of globalization,
  • The increasing financialization of the economies of most developed nations including our own.
  • The decline in collective bargaining and thus organized labour
  • the growth of outsourcing and offshoring
  • and particularly in the Bermuda context the movement of unprecedented numbers of low cost migrant labour between countries across what John Kerry, Secretary of State for the United States of America, only recently described as “a borderless world”.

Mr. Speaker, All of the above has resulted in an ongoing challenge to Western economies such as ourselves. We have witnessed the hollowing out the vaunted middle class that was such a feature of the Western or developed world as wages have stagnated and in real terms declined over the course of the last decade or more.

We have also witnessed levels of income and wealth inequality increase to levels not seen since the late 1920’s.

Mr. Speaker, even now as a sign of perhaps things to come, negotiations are taking place between our largest trade union the Bermuda Industrial Union and the new service provider at the airport Menzies Aviation over issues of pay and benefits for their employees.

They are at an impasse because Menzies Aviation who only recently took over the service contract there is seeking to impose a wage level below the mechanic grade, of 17 dollars per hour. This will represent a significant reduction in pay for the Bermudian employees who work there.

For many of the older workers this will result in a pay cut, back to levels not seen since the 1990’s.

Mr. Speaker one can contend that 17 dollars per hour or $35,360.00 gross, per annum or approximately twenty six to twenty eight thousand dollars per annum [est.] once taxes or benefits have been deducted does not even constitute a living wage in the Bermuda of today. Neither do wages of $5 or $8 per hour but there are employers in Bermuda who for certain occupations will offer no more.

Imagine earning $200 or even $320 per week and this, before taxes and benefits if any, are deducted.

Mr. Speaker, if earning $35,360 places you below the poverty level in terms of wages in Bermuda then how does one begin to contextualize $5 or $8 dollars per hour being earned by some workers in Bermuda today?

How would you characterize the above?

And as depressed wages and benefits become common place, poverty will only increase and the horizons of our people will continue to diminish.

Is this the new normal?

Mr. Speaker are we at an inflexion point in Bermuda whereby a decent and equitable living wage or wage floor may amount to no less than $20 to $25 dollars per hour or higher?

That is for the proposed Joint Select Committee to determine.

Even the IMF has now questioned the rightness of policies that they too once considered sacrosanct.

A recent paper entitled NeoLiberalism Oversold published by the IMF and produced by Fund researchers, Jonathan D.Ostry, Prakesh Lougani and Devide Furceri offers a sobering view of the acute challenges that increasing income inequality has produced.

They write that “the economic damage from inequality suggests that policy makers should be more open to redistribution than they are.”

Mr. Speaker, we shall now turn to the concept of the minimum;or more precisely the living wage?

Many countries, particularly in Europe and North America, have long established the concept of a minimum wage, even though the actual amount may vary from country to country and, indeed, within countries. The concept behind a minimum wage is simply to raise those at the lower end of the economic spectrum out of poverty to a level of dignified living.

But the setting of a minimum wage, in and of itself, while being beneficial, is not sufficient enough to raise people out of poverty. Wages, in a capitalist system, are set by market forces and can assert downward pressure on the incomes of those at the lower end, while those at the higher end reap benefits vastly disproportionate to the workers reporting to them.

In a November 25th, 2014 article in the Wall Street Journal a $15-an-hour employee at a bank wrote to the $19.3 million a year CEO asking for a $10,000 increase across the board for all low paid workers.

The CEO earned more than 700 times what the low-income worker was making. While the $27,300 a year earned by the hourly-paid worker was barely above the then minimum wage, the worker would have had to have been conservative in his spending habits just to keep his head above poverty. He was one of the lucky ones – other workers didn’t fare as well.

Governments in many countries have introduced a minimum wage, to ameliorate this downward pressure on wages. A national minimum wage, according to research on the London living wage conducted by Jane Wills of the University of London, is set at the level the market will bear before jobs are lost or prices will rise. This formula only serves to ensure that many at the lower end of the wage scale will remain there.

Mr. Speaker, in contrast, a living wage is based on the actual cost of living – rent, food, travel, taxes and clothing and /or meets the threshold or represents at least two thirds of the average/medium income of a respective locale. This concept ensures workers remain at least several steps ahead of poverty, providing a level of dignified living.

The voluntary living wage established by the Living Wage Foundation an advocacy group in the UK has achieved a living wage at companies that have agreed to participate of £9.40 [approx..$14.00] in the city of London and £8.25 [approx.. $12.40] outside of London.

Clearly while hundreds of companies now voluntarily comply with the Foundation’s guidelines a mandatory legally imposed increase to the minimum wage as the government has undertaken – at levels that at least come close to a living wage minimum is far preferable for millions of low paid British workers than that provided by voluntary compliance by way of the Living Wage Foundation initiative.

Mr. Speaker in other words the difference between a standalone minimum wage and a living wage, is like the difference between night and day. Between being a member of the working poor or having a decent, basic standard of living.

It can be the difference between despair and hope for the young mother with two children or the young man or women seeking to build a future for himself.

But here in Bermuda, a country with one of the highest GDP’s in the world, there is neither a minimum wage nor a living wage. It is not unheard of for workers at the lower end of the wage scale to earn under $8 an hour in a full time job, which was recently highlighted in a published statement in support of the adoption of a living wage for Bermuda by the Bermuda Trade Union Congress, this amounts to an annual income of approximately $15,000 dollars.

It is estimated that the cost of living in Bermuda is some 40% higher than in the UK. What does that mean in reality? It means this – the low-end worker in the UK is better off.

Does this explain the migration patterns we have seen since 2010 as more Bermudians increasingly become economic migrants principally to the United Kingdom.

Mr. Speaker we should not lose sight of the fact that not only have we seen the migration of growing numbers of the working poor but also the college educated and highly skilled as well.

We have seen in effect a brain drain the likes of which is more characteristic of a developing country than the Bermuda we have known.

The loss of human capital in this regard has been significant

But note that while living in the UK a Bermudian earns the equivalent of $9.75 per hour, however, the purchasing power of their earnings is far greater. What the Bermudian worker gets for their $5, $8 or even $15 per hour, the UK worker, even when taxes are taken into consideration, is better off because they would only need $3.10 to buy the same goods that $5 would buy in Bermuda. For instance, a loaf of bread can be bought in the UK for 50p [75 cents] while in Bermuda it is $5, one-hour of a lower-end worker’s wage.

It should come as no surprise that hundreds of Bermudians in desperate need to support their families have been left with no choice than to take advantage of the right to live in the UK and reluctantly have left the island.

Mr. Speaker in effect these Bermudians have joined the millions globally who can now be classed as economic migrants.

The above graphically illustrates the economic realities that are driving an increase in poverty and creating the types of perverse incentives that are resulting in ever increasing numbers emigrating out of Bermuda.

For too many who have remained, as the BTUC’s statement articulated, and who work as cashiers, air freight/passenger agents, nannies, bar porters, chambermaids, waiters, child care workers, cleaners and pump persons their median income falls within the $20,000 to $30,000 range per annum.

The BTUC stated, “this statistic is particularly concerning as it reveals that half of the workers in these occupational categories make below that range.”

Mr. Speaker, these are the new working poor in Bermuda.

As I said before on the floor of this Honourable House, would any proud Bermudian especially those over forty years of age, imagine that in the 21st century that you would have Bermudians essentially forced by economic conditions to leave their island home to seek greener pastures in the UK?

Or that we would have hundreds of Bermudians who while working full time, literally do not earn enough to support themselves or their families.

But paying more costs businesses more and thus jobs are lost, right?

Mr. Speaker, this has been the biggest concern about a living/minimum wage. Recent evidence now indicates that jobs may not have been lost as indicated by the esteemed British journal, the Financial Times.

Jane Wills is continuing her own work in this area. What we do know is that in the short run costs do rise marginally but so does workers’ pay, standard of living, work ethic, morale and loyalty to their employers.

Absenteeism, staff training and turn over costs are reduced.

What is sometimes lost in this debate is that higher wages equal higher tax revenue for government and in the case of Bermuda less expenditure on financial assistance.

Mr. Speaker, and in this regard the numbers are startling. Since 2011-2012 to the present the client base at the Financial Assistance Department as it relates to the adult able bodied clients who are unemployed and those categorized as “earnings low”, who are those who are working but not earning enough to meet all of their household obligations – the numbers have literally tripled in only five years.

In 2011-12 the total for both categories combined was 310 clients. The figures have increased dramatically since then, in fact, three fold. The yearly average for 2015-2016 for example was 917 clients.

Mr. Speaker, Wills, of the University of London does believe, as do other supporters of a living wage, that when employers see these benefits, more will come on board and support the drive for a living wage as opposed to the minimum wage.

With respect to Immigration and the conundrum it represents.

Mr. Speaker, as the wealth gap between western nations and developing nations increases there has been an increase of movement of lower-skilled workers to those wealthy nations as has been the case in Bermuda.

The question arises as to what impact large numbers of workers, particularly those of low or no skills, have on the wages and mobility, in an economic sense, of similar workers. The vast majority of the work done in this area focuses on larger countries. The general consensus is that while there is some downward pressure on the wages of the lower-skilled, the net impact on the economy is positive, if the economy overall is growing.

A study conducted on the impact of UK immigrants by the Centre for Research and Analysis of Migration, found that the, “…empirical evidence does, in line with where immigrants are in the native wage distribution, illustrate a negative wage effect at the low end of the distribution, but a positive wage effect further up the distribution.”

The study clarified its findings this way: “Who gains and who loses from immigration depends on the skill mix of immigrants relative to native workers. Thus, immigration will lead to a re-distribution, harming some, but leading to gains for others.”

In the Bermuda scenario, a large influx of low- and semi-skilled workers has harmed not only those at the lower-end of skill sets but many in the skilled Blue-collar sectors as well. The compression of wages has led to some Bermudians withdrawing their labour altogether rather than work for the wages offered to immigrant workers. This has only created more of a demand for such workers.

Mr. Speaker, as of April 2016 there are 460 persons receiving financial assistance who are in the “Able-bodied Unemployed” category and 370 persons in the category “Earnings Low”, a total of 830 persons.

The total expenditure in terms of grants paid out to those in the above categories in total is just over $1,000,000 dollars per month and over 12 million dollars per year at current rates.

With regard to race, the ratio is estimated at 13 to 1, black to white.

Mr. Speaker we are starting to see the same trends in Bermuda that have become fairly prevalent in the United States where low earning workers who are making near poverty level wages at the big box mega stores such as Walmart and in some manufacturing jobs or in the fast food industry, are essentially forced to have their employment subsidized by the government in the form of food stamps and other benefits in order to afford to work.

A report from Berkley’s Center for Labour Research and Education stated: “…that over a third of manufacturing workers rely on safety- net programs such as Medicaid, food stamps or household-income assistance. These workers in this sector receive just over 10billion dollars in federal and local public assistance

We are seeing in Bermuda an environment where it is becoming more practical for some Bermudians particularly those with low skill levels to rely on Financial Assistance to a] meet their monthly expenses and b] if they are working to use financial assistance as a means to subsidize their earnings because they cannot earn enough in the private sector of our economy to meet their household obligations?

Mr. Speaker, make no mistake, we are all paying for this with our taxes. The failure of companies to pay a living wage as was pointed out by CURB in a recently published research paper, means that government and the people of Bermuda end up subsidizing these companies one way or the other.

I happen to know a Bermudian who is on financial assistance, a mother with three children. She was kind enough to provide me with the level of financial support that is afforded to her by the department.

The following is paid out on her behalf monthly:

  • Rent: $2800
  • Electricity Bill: $420 [actual FA contribution $250.00]
  • Food: $925
  • Phone: $45
  • HIP: $450
  • Social Insurance: $120
  • Total: $4290.00 per month

Mr. Speaker if we drill down on the numbers the mother – let’s call her Jolene for the purpose of this discussion – would have to make at least $32.40 per hour – although it would actually be more than that as I have not calculated the required pension of 5.5%.

Essentially what this means is that for “Jolene” it will take at least a wage of $34 an hour to sustain even the most basic of needs in the context of her basic household requirements.

Mr. Speaker in the above calculation you will note that there has been no provision made for transport, clothing, or the cost of day care.

Mr. Speaker in discussions with Ms. Sheelagh Cooper of the Coalition for the Protection of Children, she indicates that the above is not uncommon.

The coalition – to its credit – is an organization that has been doing an excellent and necessary job filling the gaps in our fraying social safety net along with other Non-Governmental Organizations and charities.

So at any time we may have anywhere from 800 to 1000 persons who because they have been essentially marginalized in this labour market and economy have to rely or depend on the Financial Assistance Department to one extent or another.

Mr. Speaker, is this the ongoing price of globalization in Bermuda where the widespread adoption of foreign sourced low cost labour has become the norm and has been for some time?

The unprecedented growth of low cost foreign sourced labour in Bermuda and its impact should not be minimized.

It has had the effect of inhibiting the ability of Bermudians, skilled and unskilled, many with less than a college degree to find good paying jobs that would afford them what is in essence a living wage in their own country.

Mr. Speaker, has the viability and profitability of many Bermudian businesses of various sizes been at the expense of a significant number of Bermudian workers during this period?

Returning to the Berkeley Centre’s study on how governments are increasingly subsidizing low wage employees in the private sector, they found that the gains to the economy are “captured by the owners of capital,” – in other words the businesses. It is entirely likely that if such studies were to focus on smaller countries such as ourselves, the harm to the local or host worker would be even more pronounced.

Mr. Speaker, there are clear benefits in implementing the concept of a living wage. The Global Capitalist Economy has resulted in the migration of cheap labour benefiting businesses but, as was stated earlier, driving down local wages, as these workers, some earning as little as $5 a day in their home countries, would be happy to work for $5 to $8 an hour in a host country such as Bermuda.

The implementation of a living wage would obviate the current huge demand for imported workers and result in less foreign sourced low cost labour inundating our labour market. Other possible benefits are outlined as follows.

Benefits for workers
Receive fair compensation
Lifting persons out of poverty
Better quality of life
Improved health
Opportunities for education/skills training

Benefits for the community
Greater consumer spending power
Increased spending in the local economy
Increased civic participation

Benefits for Employers
Reduced absenteeism
Decreased turnover rates
Lower recruitment and training costs
Increases morale, productivity and loyalty
Recognition for responsible employers

Mr. Speaker, we should note that both progressive and conservative governments worldwide such as in the UK are recoiling from the overwhelming evidence of growing income inequality and are now touting the efficacy of the minimum wage or more substantially a living wage, as a necessary wage floor to assist the working poor and to bring people out of poverty.

Mr. Speaker, Even the Prime Minister of the United Kingdom, David Cameron in 2010 pronounced a living wage as an idea “whose time has come.”

Honourable members will also note that six years later the UK government which he heads is seeking to deliver on that promise.

As outlined recently in the Financial Times March 29th 2016 edition under the heading, “World watches Britain’s ‘living wage’ experiment” the British government heretofore committed to austerity policies is now one that has begun the process of implementing what Nick Boles, the Skills Minister characterized as “one of the biggest increases in the legal minimum wage that any government has done in the western world in living memory”.

And what has the British government now legally mandated?

Mr. Speaker the so called new national living wage – and there is some contention as to whether this is truly a living wage and I will get to that presently – is one which was legally established to start at seven pounds twenty pence upon implementation this year and will reach approximately nine pounds [approx.$13]an hour by 2020.

As to the claim that this is a living wage, it is a claim that is open to contention. A living wage ideally should be set at no less than two thirds of a respective jurisdictions median wage to truly be considered a living wage.

The UK proposal, while a vast improvement and good for the working poor and low skilled, does not meet that benchmark, representing as it does about sixty per cent of the British median or average wage.

However, it is a start and instructive for us, as it is an issue that unlike in previous eras now results in bi-partisan buy in.

But the above is not exceptional as Germany and Australia have already established their respective minimum wages at the 60 per cent threshold and at the state level in the U.S the calls to do the same are growing.

As to the British government, the Financial Times article also outlined that the Conservatives are recent converts, as they along with most conservative parties and their business allies were adamantly opposed to the introduction of a minimum wage when it was initially mandated in the UK in 1998.

However, the job losses that were predicted as a consequence of the introduction of that minimum wage in the UK never occurred. In fact, job growth in the UK has been far more robust during this period than it has been in most countries within the European Union.

Most mainstream economists no longer advance the view that the introduction of a minimum or living wage will invariably lead to job losses.

Mr. Speaker, perhaps our Premier and the former Minister of Home Affairs, Michael Fahy who sits in another place are of the same view as David Cameron’s government is now on the subject at hand.

After all, in the March 11 edition of the daily and in the midst of the social and political turmoil unleashed in the aftermath of the introduction of the Pathways to Status legislation in this Honourable House both Premier Dunkley and then Minister of Home Affairs Michael Fahy who sits in another place, appeared to back its consideration.

Holding out hope that the Pathways legislation would be accepted by the House prior to the protest that ensued and engulfed this House, the Premier was quoted as saying that “If the legislation were approved by M.P.s its implementation would be held off until later in the summer to enable a dialogue on matters including the use of low income foreign workers over Bermudian staff.”

Mr. Speaker, then Minister of Home Affairs Fahy, in the same article is quoted as saying that “those talks” in reference to the Premier’s comments “…could include but not be restricted to a living wage.”

And much like the Premier, he too expressed concern over “the use of low paid guest workers over Bermudian workers.”

What was not said by either the Premier of Minister Fahy was that as of February 15, 2016 I had tabled the motion that called for the Honourable House to essentially examine the same issue and affirm the establishment of a joint select committee to return a report to this House with its recommendations.

Mr. Speaker, I’m not here to throw recriminations. Clearly the record speaks for itself. What is vastly more important for those Bermudians who are face growing economic insecurity is that we act to address a demonstrable need on behalf of the common good.

And there is a growing consensus in favour of adopting a living wage regime not just globally but locally as well.

We, in this Honourable House are far from being the first to consider this issue in Bermuda.

In May of 2014 the Bermuda Trade Union Congress [BTUC] and the People’s Campaign joined forces in their campaign for Equality, Jobs, and Justice. Their manifesto made the call for a living wage.

Citizens Uprooting Racism in Bermuda along with the Coalition for the Protection of Children have also similarly publicly endorsed and campaigned for the establishment of a living wage for Bermuda along with statistician and researcher Mr. Cordell Riley.

CURB outlined its support succinctly in a published position paper in favour of the adoption of a living wage for Bermuda. They characterized it as a racial and social justice issue and one that was urgently in need of consideration.

They noted in their widely distributed paper on the subject that “The 2013 Bermuda Employment Survey shows that the bottom 5% of job holders [22,540 jobs] who worked 35 hours or more per week earn $21,000 per annum or less. The bottom10% earn $33,000 or less and the bottom 20% earn $42,000 or less.”

Moreover the same paper put forth a poverty line at the household level for Bermuda by using the simple yet effective methodology of renowned international economist Timothy Smeeding.

Using the Smeeding methodology the CURB report asserted that those households earning 50% or less of the total median household income were effectively below the poverty line in their respective jurisdictions.

Meanwhile, they highlighted the fact that the 2000 Bermuda Census showed that over “…19% of Bermudian households were living below the poverty line and were earning less than $35,831 per annum.”

Eight years later, in the 2008 “Low Income Thresholds Report: A Study of Bermuda Households in Need” cited in the submission by CURB the relative low income threshold or poverty line was $41,132 per annum.”

The CURB report continued by noting that a decade later the 2010 census showed that households “…earning less than $52,000 per annum were below the poverty line, and based on the inflation rate since 2010, these figures translate into a likely poverty line of $56,000 per annum in 2014.”

Based upon the available information and statistics including the Smeeding methodology, CURB advanced the view that approximately 20% of Bermudians are now living in poverty.

It also stated the following which should make us all pause “Rather than one well paying, full time job with benefits, many Bermudians are cobbling together a patchwork of low paying, part time positions, often provided with no benefits, and working themselves into the grave to do it. Three generations of one family living together are becoming commonplace. And often only one individual has work, with families deciding between electricity, food or medicine.”

As we all canvass throughout Bermuda, we know that the above does exist.

Mr. Speaker I would ask the members of this House to listen closely to the following concluding remarks as taken from the CURB position paper which states that “As long as an adult in Bermuda is working a full-time Job, yet can’t eat, pay the rent or utilities and clothe themselves, we are failing as a society and our government is failing us.”

Mr. Speaker, now is the time for us as legislators to send a message to Bermuda that not only is this the politically right thing to do but also the morally right thing to do.

At the conclusion of the protest in March the government agreed to send the living wage issue to its Labour Advisory Council. Unlike the efforts of the Consultative Immigration Reform Working Group, to date we have been provided no updates as to when the examination of the issue will take place nor more importantly, its frame of reference.

I hope that the Labour Advisory Council will begin its work soon and that the government will provide this House and the Bermudian people with regular updates in line with the spirit of that agreement reached in March.

Mr. Speaker, clearly I am not deterred. I believe this Honourable House can and should in consideration of this issue affirm the establishment of a joint select committee as called for by the motion.

On a complex and critical issue such as this the more minds and shoulders to the wheel the better.

As occurs in the United States Congress between the Senate and the House of Representatives both reports can be viewed in tandem and eventually reconciled so as to serve and inform the deliberations of the Cabinet, this Honourable House and the Bermudian people in due course.

Mr. Speaker, you will also recall that in my presentation before this Honourable House in 2015, I noted that even during the greatest economic expansion or boom in Bermuda’s history under the prior Progressive Labour Party government, jobs were being lost.

Between 2000 and 2008 with the onset of the so called “Great Recession” over three thousand jobs in our economy disappeared largely to technological disruption and by way of outsourcing.

We lost literally hundreds of jobs in the banking sector alone during this period going from around 3,000 persons in that sector to approximately 1200-1300 today.

Mr. Speaker, the so called great recession has only exacerbated these trends and much like the proverbial retreating tide, exposed the great decades long erosion of what was once the foundation of Bermuda’s and even American prosperity, which was the broad based prevalence of good well-paying jobs and economic opportunity no matter ones level of education.

Mr. Speaker, in other words between 1960 and virtually to the late 1990’s even those without a college education in Bermuda and despite that structural racism that so characterized the society -could obtain work that would afford them a middle income standard of living and provide for their families if they were willing to work hard.

For many that may have required working at two jobs or more but it was achievable.

Many of those jobs were tied to Bermuda’s burgeoning hotel sector during its post WWII golden period along with jobs and other opportunities associated with the construction sector. It was also reflective of the strength of Bermuda’s trade union movement that secured solid wages and benefits through collective bargaining for generations of Bermudian workers who had less than a college education.

But all of that began to unravel with the financialization of our economy as mentioned, with the growth of Bermuda as an offshore centre.

The concomitant decline in the tourism industry beginning in the mid to late 1980’s completed the picture

Professor Ronald L. Mincy’s, Columbia University final report on our young black males in 2009 characterized this trend, as I previously mentioned in 2015, as representing a major change to the industrial composition of our labour market and therefore our economy.

I believe that the pendulum must now swing the other way.

Mr. Speaker, there is a growing angst that is now gripping our community as job and wage growth remains stagnant and in real terms, has declined.

Mr. Speaker, too many within our non-unionized private sector have not had pay rises for over a decade. Government workers, all of whom are unionized have gone a full five years without any wage or salary increases.

Look to our West, as the United States of America has also experienced the same disruptions. Note the impact that it is having on their politics and the rise of disquiet amongst largely white, blue collar workers without college degrees who in their desperation have flocked to the siren song offered, by the now presumptive nominee of the Republican Party, Donald Trump.

The British campaign to leave the European Union is also fueled in part by the same factors such as gross levels of income inequality in the era of globalization, driven by massive waves of low cost labour into Britain.

The decision as to whether to stay or leave the Union will be ultimately decided by a referendum shortly after this presentation is made with implications for us all.

Mr. Speaker, globalization has certainly had its successes as millions have climbed out of abject poverty around the world. We cannot be blind to that fact.

For the last thirty odd years global elites have celebrated those successes and all of us have to one degree or another have bought into this narrative and its key assumptions.

However, we now live in a world whereby the one percent of the global population have now captured more wealth than the remaining 99 per cent combined.

Mr. Speaker is Bermuda any different in the context of these trends over the last few decades?

Joseph Stiglitz the noted economist and former member of the Clinton Administration and World Bank had this to say about growing inequality and the value in addressing it, “Reducing inequality on the other hand has clear economic as well as social benefits. It strengthens people’s sense that society is fair: improves social cohesion and mobility, making it more likely that more citizens live up to their potential; and broadens support for growth initiatives. Policies that aim for growth but ignore inequality may ultimately be self-defeating”

Stiglitz also asserted that gaps between the rich and the poor “are partly the result of economic forces but equally or even more they are the result of public policy choices, such as taxation, the level of the minimum wage, and the amount invested in health care and education.”

Mr. Speaker extreme levels of income inequality diminish social cohesion and political stability.

Mr. Speaker, much like Joseph Stiglitz, Lord Michael Hastings, the global head of corporate citizenship at professional services firm KPMG said only recently in the May 20th 2016 edition of the Royal Gazette that: “A living wage is not transfer of wealth from the rich to the poor, it’s an investment every community needs to empower dignity and the poor will benefit – it will raise their opportunity and raise their potential.”

Make no mistake about it the dirty little secret of Bermuda is that poverty is on the rise along with widening income and wealth inequality. And make no mistake that poverty is concentrated predominately in Bermuda’s black community, which was disproportionately impacted by the so called great recession.

Mr. Speaker, look at the stats on black unemployment in Bermuda as of 2015 it stood at 9 per cent in Bermuda as opposed to 4 per cent within our white community. The overall unemployment rate currently stands at 7 per cent.

That figure in turn may be an understatement of the real level of unemployment in the country. The labour force participation rate when last published by the department of statistics seemed to indicate that many able bodied Bermudians in addition to those who have retired such as in the public sector – have stopped looking for work – or as indicated migrated mostly to the UK.

As to the migration or emigration issue it is estimated that thousands have left Bermuda over the last few years and disproportionately many of those were black Bermudians.

Anecdotally, a colleague who sits on these benches reports that in her daytime canvassing over the last two years she finds more and more people home – and not just seniors – during the working day.

Does that mean that there are no whites living in poverty or struggling with low wages or incomes?

Mr. Speaker, the answer to that question is no. It only means that black unemployment and poverty is far more prevalent in this community in line with historic norms and out of all proportion to their percentage of the population of approx. 60 per cent [resident pop.].

The recent “great recession” has only exacerbated this trend.

93% percent of the clients of the Financial Assistance Department that were cited above are black Bermudians.

Mr. Speaker, the reality however is that this fix will benefit all of us.

And I do not buy the sky is falling view that with the imposition of a living wage jobs losses will occur or that this will not benefit businesses of various types and our economy more broadly.

Mr. Speaker in 1914 the pioneering auto manufacturer Henry Ford introduced an innovation that up ended the world of business in American and globally.

Ford introduced in affect a living wage in his automotive plants by announcing that he would implement a five dollar per day wage for most of his workers. This increase essentially doubled the rate of pay at Ford.

In today’s dollars that meant Ford workers would be earning what is equivalent to $120 dollars for an eight hour shift.

Ford was a savvy industrial titan but he was no saint. He vehemently opposed trade unions and collective bargaining in extreme.

Ford’s anti-Semitism was also pronounced and deep seated to such an extent that an ambitious politician in 1930’s Germany by the name of Adolph Hitler, openly expressed his admiration for Henry Ford.

But Ford in his flawed brilliance knew one thing and that was if he paid his workers what we now call a living wage, or in reality established profit sharing, it would accomplish the following objectives some of which were outlined previously.

One, it assisted him in retaining his best workers in a very competitive labour market. The constant turnover of lowly paid workers that had bedeviled his plants declined significantly. Moreover, the best talent available now beat a path to Fords door.

Additionally it raised wages and the welfare of workers then throughout the Detroit concentrated industry.

Secondly, and more importantly for Ford it enabled thousands more to afford his cars. In other words it was one of the smartest business decisions he ever made.

Mr. Speaker, Ford created a virtuous cycle, as opposed to the negative cycle that had existed at his company which was hurting its competitiveness on a number of fronts. And he did this through one simple act and that was by implementing a profit sharing plan and paying his workers at the very least a living wage or better.

By doing so it fueled what every economy needs to engender broad based prosperity and that is demand.

Ford’s actions led to his competitors doing the same thing. They had to in order to remain competitive. That is the definition of the multiplier effect.

Mr. Speaker, only recently in this Honourable House without indulging in too much reflection the issue of the Hotel Industry was discussed and the fact that there has been a dearth of Bermudians working throughout the industry.

The former Minister for Tourism and Transport agreed with me that if we wish to see Bermudians return to the industry then the respective properties must offer a living wage to its employees.

Certainly that is the key reason Bermudians do not choose the industry below the management level. Wages are simply too low.

Notwithstanding the above most of the major properties are having their operations subsidized by significant amounts of tax concessions granted by the Bermuda government.

And these tax concessions are getting more elaborate by the day.

Mr. Speaker, it is Bermudian tax dollars that underwrite those tax concessions but the industry itself is not an industry that Bermudians for the most part can afford to work in because of the poverty level wages on offer.

Consumer demand is key in a consumer based economy such as ours. No segment of the population spends a greater proportion of its disposable income then those at the lower and middle income strata.

It stands to reason then we can at the very least buoy demand and contribute to economic growth by supporting a living wage.

Let us put more money in the hands of those who will go and spend it in our economy. Their impact on demand should be just as appreciated as is the five million purchase of a local home by a foreign buyer.

It would also have the intangible benefit of enhancing our social cohesion as opposed to what is happening now by creating our own virtuous cycle.

If we want to give people a hand up – to borrow an old yet reliable cliché -as opposed to a hand out…then this is it. Or at least one important part of it.

Mr. Speaker, the best crime reduction strategy is not just a booming economy and with lots of jobs; but rather a robust and sustainable economy with jobs that provide a living wage for Bermudians.

Mr. Speaker will the establishment of a legally mandated living wage regime for growing numbers of those who now constitute the working poor in Bermuda be the solution to the challenges that are now endemic to our labour market?

No it would not. But it would represent an important first step by creating a wage floor that is equitable and fair. And that wage floor must be one perforce tied to the consumer price index or CPI.

We all know every journey on the path to social and economic justice must begin with that first step.

Mr. Speaker I contend that this is that first step.

But others steps will be needed as well, such as an amendment to the 2000 Employment Act Section Two clause [2] b that provides an opt out clause for too many employers in the private non-unionized sector who require at times through coercion straight time for work over and above the 40 hours per week threshold.

Oftentimes the acquiescence of foreign workers in relinquishing their right to overtime pay has placed Bermudian workers at a severe disadvantage as a recent Supreme Court ruling illustrated.

However, neither the tribunal not the Chief Justice could affirm the overtime claim due to the clause in the Employment Act highlighted above.

Perhaps even more egregiously in the matter of Grant vs. Apex Construction, Chief Justice Ian Kawaley did affirm the Human Rights Tribunal finding that Mr. Grant had been discriminated against on the grounds of his nationality and more specifically due to the fact that he was a black Bermudian.

The ruling by the tribunal found that Grant and other black Bermudians, “Were hired as a low grade employment class with no promotion prospects and with a view to obtaining work permits for foreign workers to do the ‘real work’”.

What happened to Mr. Grant has been happening in Bermuda in one shape or form since emancipation. It is these practices which has led to the multi-generational marginalization and the demoralization of the our black Bermudians in the workforce of this country.

However, it is ironic that Mr. Grant could not achieve justice on the “overtime” issue as that clause from the 2000 Emloyment Act in effect places the veneer of legality upon a practice that robs workers in this country every day.

Mr. Speaker let this House affirm today that overtime pay in Bermuda and a living wage should be a right and not a privilege for every worker in this country.

Let us join hands across this aisle and amend the Employment Act to remove that clause as a statement of our commitment to Bermudian and other workers who give an honest day’s work and deserve better.

Let us fix this injustice.

Mr. Speaker, we should continue to expand our tax base and more importantly make it more progressive. Our Finance Minister has made a small commitment to that by way of the imposition and expansion of our service taxes on some professional service providers, but more is needed including a sharp reduction in payroll tax upon those whose earnings are near or below the poverty line.

Mr. Speaker, as a recent report has confirmed, Bermuda’s international insurance and related industries exported $24 billion in services to the EU alone, yet as noted, school children in this country are going hungry without proper lunches.

Poverty in Bermuda has grown right along with Bermuda’s role as a global giant in the broader risk management industry.

This should not go un-noticed.

Why should the top one to ten percent of earners –corporate and individually – in Bermuda carry too little of our tax burden while the working poor and middle income earners proportionately carry too much.

Mr. Speaker, This is nothing new. Ms.Lynne Winfield recently participated in a public forum hosted by the Chamber of Commerce on the issue of immigration.

Ms. Winfield reminded us that in 1941, the American Vice Counsel in Berrmuda who was here during the building of the U.S bases during the war wrote a thoroughly astute observation concerning the then white oligarchy here and their position on taxation: “For a hundred years a small group has made Bermuda its own paradise by controlling legislation and by seeing that tax policy kept all but themselves in strict economic subjugation. While they accumulated fortunes subject to no taxes whatsoever.”

So we have a long history of this type of behavior. The question before us now is whether we have the courage to break the cycle.

Let us also address our immigration policies by a root and branch reform of our Bermuda Immigration and Protection act 1956 as has been recommended by this side of the political aisle and by MP Walton Brown, CURB and the Peoples Campaign.

At the same time let us open up our economy further and liberalize our 60/40 regime to address those companies that essentially are in the business of rent seeking as opposed to expanding the economic pie in banking, and in the provision of health insurance being but two.

Mr. Speaker, competition can be the antidote to host of economic ills. Let us redouble our efforts as advocated by the Progressive Labour Party by way of our 2016 response to the Throne Speech and establish a technology incubator that would also serve as a host for Fin Tech [financial technology] companies.

We envision Bermuda as a fin tec hub in the Mid-Atlantic and have been its strongest champions to date.

Mr. Speaker let us also consider the adoption of race based affirmative action or empowerment programmes that can be designed specifically to address the chasm caused by the historic legacy of the past and the growing wealth and income disparities between blacks and whites in Bermuda today.

There are so many that wish this conversation to end. To simply go away but it will not Mr. Speaker.

Looking at the above suite of recommendations including affirmative action and more importantly implementing them in a way consistent with our values and our historic and present realities we can begin the process of genuinely making the divisions that confront us along racial lines truly seem minor and inconsequential.

That is my hope and the aspiration of many.

Mr. Speaker, this challenge is a profound one. I cannot put it any other way. It literally breaks my heart to see how growing numbers of my people are living now.

When I go into some homes the evidence is all too real for me.

In June of 2016, young man was shot in my constituency. I then spent the next two days touching base with the residents to see how they were coping.

However, one resident in his 50’s had said that he has had enough of Bermuda and was leaving his home and moving to the UK with his family.

He made the decision some months ago but the recent shooting only confirmed in him that his decision was the right one.

He, his wife and his children have so much to offer this country. It will be our loss as they take so much with them that we cannot replace.

Mr. Speaker to paraphrase former U.S. presidents, Franklin Delano Roosevelt and Lyndon Baines Johnson, let us declare a war on the growth of incipient poverty in Bermuda and by doing so establish a new deal for Bermudians.

Let us break free of the thinking that is no longer relevant to what Bermuda has become. Nostalgia can bring warm memories but ill prepare us to accept the challenges of the future.

Yes, many have benefited from their exalted professional perches within the precincts of the global economy and have done very well with their six figure or more salaries in Bermuda much like in many other parts of the world; but I shall not be an uncritical cheerleader.

We see around us every day those to whom this model has not extended its golden benefits and those whom this economy is leaving behind.

Let us therefore re-imagine what Bermuda is, and more importantly what it can be, and let us start now with this first step of establishing a new compact between us based on the principles of economic and yes, racial justice.

Mr. Speaker the time for the living wage is now.

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Comments (21)

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  1. Say Whaat? says:

    $8/hour is appalling! In Bermuda? Where a box of cereal is easily $7? How can the employer justify paying such a low wage? You shouldn’t have to work an hour to earn a box of cereal. You would have to work another hour just to buy milk! So think about rent and Belco.

    Let’s do the minimum wage thing. All the Fox News supporters can be quiet on this. A minimum wage will not hurt the business if they know how to manage money.

    • WarwickBoy says:

      Spoken like someone who’s likely never owned or run a business.

      • The Original Truth™ says:

        Spoken like someone who’s likely never really learned how to run a business or their finances properly.

        It’s too bad that immigration supports the Trans-Pacific slave route instead of getting employers to hire locals at proper wages.

        If you have to pay slave wages to run a business where there isn’t any competition just a bunch of businesses charging the same astronomical prices then you really have no business running one.

        • Kangoocar says:

          And you are definetly speaking like someone that has NEVER owned a business!! You are absolutely clueless about owning a business if you seriously believe what you just wrote!

          • The Original Truth™ says:

            No not true. I’m speaking AS someone who owns a business and knows how to run it properly to make a return without paying slave wages or gouging. You’re just an ignorant racist who will make any excuse no matter how asinine it sounds to keep Bermudians from getting ahead.

            • innna says:

              u people really think there is some conspiracy out there and people are actively trying to keep Bermudians from getting ahead don’t you…. guess that’s the power of Igrance combined with propoganda

  2. watching says:

    Interesting that during the debate, the Home Affairs Minister Pat Gordon Pamplin initially was distancing herself from this motion until Shawn Crockwell stood in support and then she backtracked.

  3. Mike says:

    Doubt Bermuda can do anything about it, but seems obvious to me that if Rents and Belco in particular were lower, the pressure on low wage earners would be significantly less.

    How the hell you achieve that is the question.

    • Toodle-oo says:

      Completely agree.

      It’s a question of which came first , the chicken or the egg ?

      Is there a problem with the wages or is there a problem with the price structure ?

      A person who earns $4000 per month and has to pay rent on a $2500 a month unit is already broke .

      • rightt says:

        I know someone who earns $1550 a month.. $4,000 is good money.

        • Toodle-oo says:

          I wish I was earning $1500 a month right now .
          $4000 would be grand !

          The point is it’s all relative based on what one’s expenses are. If that person earning $4000 a month has inescapable monthly bills which are nothing more than the basics that amount to more than his monthly earnings he has no chance of getting ahead at all . No saving power whatsoever.

  4. Faith in our future says:

    Wow can we please …

  5. Kangoocar says:

    This all sounds very nice but, the problem is, it will lead to higher costs for everyone, simply put, it will lead to hyper inflation! The $BDA is worth nothing anywhere else in the world, we need to EARN $US, and we can only do that by encouraging more Foreighners and IB businesses here, along with trying to boost the tourist numbers, but everytime this has been tried under the OBA, the combined opposition which is made up of all the unions, plp, certain preacher and curb, do ALL they can to derail it, and incase anyone needs to be reminded, Rolfe is part of that group!!! The xenophobes of this island lead by the fore mentioned, are the REAL cause of why so many are struggling today, but until they stop listening and voting for the very people that put them in the mess they find themselves in, I have trouble feeling sorry for them!!!

    • innna says:

      but unfortunately they don’t understand how economies work… and that is why democracy with a majority uneducated populous is doomed to follow the paths of other countries who have experienced hyperinflation and economic collapse

  6. M.C. Beauchamp says:

    Lovely speech. Noble. Not going to win any friends in IB with the terms like “rent seeking”. Not going to win any friends in hospitality who cannot meet costs across the industry. But Noble, and lovely.

  7. uiq says:

    “There are so many that wish this conversation to end.”

    Unfortunately this is more of a lecture than a conversation, and the likely consequences of imposing minimum wage by legislative fiat are ignored entirely (e.g. fewer entry-level jobs for new workers, increased financial constriction of small businesses, passing of costs from wage increases on to customers, etc.).

    Sadder still, it is a lecture underpinned by accusations of racial collective guilt (oligarch bingo) and specious economic history.

    To clarify just a couple of assertions made about Ford:

    Ford didn’t pay his workers twice the daily rate, it was half pay and half bonus. The bonus came with stringent terms that modern Bermudians would not tolerate (among other things, accepting regular inspection of employees’ homes to make sure they were behaving themselves, avoidance of boozing and gambling, and this bonus wasn’t available to men whose wives were part of the paid workforce).

    The wage hike wasn’t to enable his workers to buy cars off the floor – Model Ts were still too expensive for skilled workers to afford on a year’s salary (imagine a world where Porsche workers are paid enough to buy a new 911 every year). It was to retain men on the assembly line, which was physically demanding work that wore men out – this is why Ford plants had very high turnover, which the writer ascribes to poor pay.

  8. robert says:

    Mr C is all about letting everyone know that he cares about injustice, real or imagined, and economic truth be damned. What he proposes is nonsensical.

  9. Average Bermudian says:

    fey ?