Another view for a more equitable Bermuda
Well, isn’t that rich? No pun intended. Nathan Kowalski, reported financial expert at Anchor Investment Management, has fired the first salvo against minimum wages in stating “a lot of work needs to be done”.
Make no mistake about it, he is in code language and essence attacking paying in Bermuda’s economic climes workers a measly $12.25 to $18.23 per hour from 2018 to 2021. Or, I argue, at all.
At these rates, the “worker’s paycheque”, or income for a 40-hour week, grosses out at $490.00 to $729.20 — or to approximately $25,480.00 to $37,918.40 per calendar year, respectively.
Mr Kowalski doesn’t want workers to be paid these “grand” amounts until the “livable or minimum wage” proponents consult with him and the usual suspects — the hoteliers, retailers and restaurateurs, in particular — and the Chamber of Commerce, generally.
From their inception, all of these entities have opposed corporate income taxes, or taxes of any description. Being taxed to pay for this minimum wage is the real prospect that Mr Kowalski is opposing here. Please bear in mind that these entities also employ in their industry a disproportionate number of non-Bermudians over Bermudians.
The first consultation, and strenuous effort on the part of Mr Kowalski, that should take place is for him to straighten up his own house before he turns his attention elsewhere.
But, wait, think through things a minute: allowing Mr Kowalski the consultation he seeks is rather like putting the fox in guardianship of the henhouse to ensure hens’ safety, right?
Here’s the real deal, Mr Kowalski. The consultation you ask for before the minimum or livable wage is implemented grants you the supreme opportunity to look into, vet and shape the prospective income of thousands of workers.
Why, then, don’t we first broaden this inquiry to also establish a true poverty data line for Bermuda, which I say — arguably, easily and conservatively — lies between $55,000 and $60,000.
Simultaneously, Mr Kowalski, why don’t we additionally look into the “super-profit margins” or mark-ups over costs of your membership and commercial colleagues on a quarterly and annual basis?
Reportedly, 100 per cent to 500 per cent, and in some instances even higher, mark-ups have been placed on the goods and services of your membership.
These figures, if found to be true, would surely spike the cost of living in Bermuda, wouldn’t they?
Further, have you acquainted yourself, Mr Kowalski, with a family of four having to be very lucky to secure the rental of a two-bedroom apartment in Bermuda for $2,500 per month or $30,000 per year?
Factoring in food costs of approximately $600 per month, Mr Kowalski, would practically wipe out the higher-end, minimum-wage rate of $18.23 per hour that you and others oppose or question, wouldn’t you agree?
Let’s say, Mr Kowalski, that we legislate that your colleagues can make only a 100 per cent profit on their goods and services, and plough back into the economy the overage of 200 per cent to 500 per cent to pay workers what they are worth — and, in fact, to ultimately contribute to your profits, bonuses, dividends or income generally, as the multiplier effect kicks in?
At base, Mr Kowalski, it is all about evening or levelling up the pyramidal playing field by redistributing existing wealth, and not so much about creating new wealth, isn’t it?
People generally are well aware, Mr Kowalski, that your colleagues hire approximately three non-Bermudians for the price or wage of one Bermudian and make profits as a result.
People know that saving wages in this manner translates into those saved wages becoming your membership’s profits, dividends, bonuses and income generally.
So, it is only fair, Mr Kowalski, that you and your colleagues be legally mandated to declare what your profit margins or mark-ups are so that the population at large can more precisely judge whether or not such profits, bonuses, dividends and the like are fair.
Whether such sources of income for the corporate sector, domestically and internationally, as opposed to the working-class sector are the real culprits pushing up the cost-of-living index in Bermuda to be the highest in the world remains to be seen.
Let’s go for it, Mr Kowalski. I would love to be at that table when you do the numbers.
In the meantime, while you are totalling the income from those profit margins, please also answer publicly how well you and or your membership would live — without taking food, clothing, healthcare, education or entertainment into account — in Bermuda on $12.23 or $18.25 per hour for a 40-hour week for 52 weeks, paying rent of $2,500 to $3,000 per month or $30,000.00 per year.
Answer, too, why any human being in Bermuda should legitimately, or morally, be expected by any other group of people to eke out a living on such a meagre sum.
Once you have answered these questions, Mr Kowalski, we can then commence in earnest the consultations you seek.
For what it’s worth, my criticism of the Sage Report was then, and remains today, that it was wholly focused on the expenditure side and not balanced with the revenue side, which was conspicuous by its absence.
But not surprisingly, some would say, because with the One Bermuda Alliance focusing on the expenditure side, it was the workers, not the influential entrepreneurs, who directly suffered with wages cut and frozen, and jobs lost, while simultaneously your membership, Mr Kowalski, declared profits quarter over quarter.
Accordingly, we need the other half of the Sage Report to appreciate the true and rounded position of our financial and economic difficulties.
We need a Sage Report addressing the revenue side, whereby in particular your larger members, banks and financial institutions, grocery shops and retailers, and the “sacred cows and papal bulls” of international business need to be appropriately “milked” and taxed — flat or otherwise matters not — to reduce the inhumane cost of living in Bermuda.
Yes, Mr Kowalski, proportionately and progressively taxed on their millions and billions of profits, investments, capital gains and the like, which are earned as a result of doing business in Bermuda.
Google made millions, and even billions, of untaxed dollars from PO Box 666, which, if taxed appropriately, would have operated wonderfully to fund the social programmes we need in alleviating some of the social and economic stresses we experience today in Bermuda.
This taxing exercise can be achieved, in fact, without deploying domestic, personal or corporate income taxes at all — in any guise or form.
Flat taxes across the bottom lines of these companies will suffice. Don’t worry, John, Michael and Grant, you’re safe at least in the first go-round.
The beauty of such an approach to public finances is that with a 1 per cent to 2 per cent flat-rate tax redistribution of the entire existing wealth or revenue of our island, and even only of our international business sector, I confidently predict that our national budget would be wholly underwritten or written off, our cost of living would drastically fall to levels that would amount to better than a 2 per cent rise in wages, salaries, savings accounts and imports would increase, unemployment decrease, Bermudian emigration would halt and reverse, and new business would be ushered in.
Don’t believe the hype usually sown by themselves that these companies will flee.
Common sense, and the prospect of maximising profits, dictates that the sound sacred cows and papal bulls I mentioned earlier will stay put where they are — or face the daunting prospect of 12.5 per cent to 35 per cent taxation or more abroad, or having to shift to less favourable jurisdictions.
This is where the real consultation needs to be focused, Mr Kowalski; not with, about or among the workers of this country.
To finalise matters, Sir, we urge you to encourage your membership to enthusiastically work with the Government, and those of like minds, in crafting a nutritious, affordable, staple basket of goods and services indexed to the livable wage that we are working towards.
This basket is to be priced within the budget of those who cannot afford those high-priced goods and services today.
Yes, Mr Kowalski and others, legally mandated price controls can and do successfully operate in this country, as we experience every day through rent control, taxis and Belco electricity rates, to name a few examples. Breach such rates and be prepared to face the criminal and civil sanctions attached.
Today, Mr Kowalski, it is all about respect for humanity and dignity, fairness and balance — and far, far less, if at all, about the benign arrogance, ignorance, elitism, condescension and paternalism of yesteryear.
• Philip Perinchief is a former attorney-general for the Progressive Labour Party and an independent General Election candidate