Red flag: the middle-class predicament
The primary reason why Bermuda is such an outstanding island nation is determined by one undeniable fact: we have a large middle-class population that provides a high overall standard of living.
Many of the island nations in the Caribbean have opulent signs of wealth and luxury contrasted with massive visible poverty, with an almost invisible middle class. However, Bermuda stands among very few islands that have beaten this trend, placing us among the top tier of First World nations. Lower crime rates are another benefit and advantage to a country having a strong middle class.
Bermuda does not have sprawling shantytowns or other scenes of extreme concentrated poverty. Visitors to our island are regularly amazed at the area in the City of Hamilton that we commonly refer to as “back-a-town”. They are often surprised by the absence of the usual signs of the suffering underclass that typifies many island nations. In fact, the lack of these scenes is also an essential part of what makes us attractive to international business, our tourism product as well as our overall quality of life.
I bring this to Bermudians’ attention to highlight an imminent and growing threat to our country as we know it. The value of our homes, which is where most Bermudians’ wealth is accumulated, is much lower than what it used to be. Good jobs are disappearing at an alarming rate. Our taxes are steadily increasing. Our wages and benefits are decreasing. Our children’s future is very uncertain and our national debt is growing.
Bermuda, our middle class is under enormous pressure and continues to steadily decline.
Bermudians, we cannot continue to allow this to happen. We need progressive governmental policies to turn around the economy.
It is one thing to make promises and spin rhetoric to get votes and win elections by a landslide. It is an entirely different matter to successfully deliver on sound economic policies that translate into tangible benefits for our middle-class working people.
It is important to state that focusing on the middle class does not mean that the upper class, especially business owners, and the poor can be ignored. A strong middle class is the result of a profitable and strong business class. In addition, successful businesses are the most likely way that lower-income people will have the best chance of lifting themselves out of poverty by taking advantage of middle-class opportunities.
The One Bermuda Alliance is widely regarded as having a pro-business agenda. However, it is a big mistake to separate business from labour. This is one of the critical mistakes that the Progressive Labour Party consistently promotes in our political culture. Business and labour must go hand in hand. The trademark of being a First World country is to have thriving businesses, highly skilled and highly paid workers, and good benefits.
In Bermuda, we have two primary employers that account for our middle class. They are the international business sector, consisting primarily of reinsurance, insurance and banking. The other major employer is the Government of Bermuda.
Government workers are under extreme pressure under this labour government for one chief reason: there is no growth and quite possibly a major decline of the economy, which presents the constant threat of the workforce being downsized or having wages and benefits slashed or cut.
The most recent reduction of government workers’ benefits attributed to Covid-19 was to suspend pension and social insurance contributions. In essence, this is sacrificing the workers’ future financial security to survive the present economic stresses.
Economics 101 says that this is the first resort of a government when it fails to grow the economy. Government workers should be under no illusion — make no mistake about it, there is more to come.
A pro-economic-growth agenda before Covid-19 would have placed Bermudians in a better position to weather these storms without such sacrifices. Ultimately, the failure to grow our economy threatens not only our middle class but also our Bermudian quality of life. The inability of the Government to improve the economy is realising that threat more and more.
We need a healthy public sector, not only for its necessary functional role, but to maintain the middle class that is so crucial to our overall economic profile and quality of life. I do not know any OBA member who does not understand this.
To achieve the middle-class security so vital and necessary to Bermuda, all sectors of the economy have to be united in this effort. Instead, we have become so divided and polarised that we are moving in the very opposite direction. The PLP has made rivals of the public sector against the private sector, local interests against international business, labour against business, blacks against whites — all for political gain against our economic interests.
It is with this backdrop that there is now talk of the PLP calling for a snap election after three years of a five-year term.
Bermuda, this is a red flag.
When a party with an overwhelming two-thirds majority is contemplating doing this, there is only one plausible explanation: it is expecting things to get much worse and sees no way to make things better. Therefore, rushing to the polls is its best attempt to secure a victory while it still can and to sustain political careers before a pending further economic collapse.
Unfortunately, this is the present state of our political affairs. Bermuda and Bermudians, we need to stop accepting this to our detriment. We need to choose substance over empty and divisive rhetoric. We need a government that will join the forces of local businesses, international businesses and labour to grow our economy towards a more equitable distribution of wealth and to grow a stronger middle class.
I will continue to highlight this significant area of concern and I invite all Bermudians to remind the Government of the importance of successfully growing the middle class.
• Vic Ball was a One Bermuda Alliance senator from November 2014 to July 2017
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