The hallmark of every first world, or developed country, the golden thread that runs through all of them, is a large and thriving middle class. In Bermuda one of the ways we are going to grow this economic pie of ours and expand the middle class is to encourage the entrepreneurs in our island. After all, entrepreneurs are the ones that are creative, bring in new ideas, new services, better efficiencies, increased productivity, lower costs, make Bermuda more competitive and convert that dollar from tourism and international business into household wealth.

The 2002 CURE Annual Review of the Bermuda Workforce, covering 2001 and 2002 (a document that offers far more penetrating glimpses into employment demographics than does the recently published Bermuda Job Market report by the Department of Statistics) divides the workforce into three levels: people annually earning less than $25,000, those earning between $25,000 and $75,000, and those earning over $75,000. Of all persons earning over $75,000 p.a., 67 percent were white, while of persons earning less than $25,000 only 16 percent were white. On the other hand, blacks made up only 22 percent of all persons earning over $75,000 p.a. but represented 68 percent of those who earned below $25,000.

Moreover this disparity cannot be explained by education alone. There are 33 percent more whites than blacks with advanced degrees but there are 98 percent more whites than blacks with senior management and executive jobs.

This is clear evidence of institutional racism at work.

Between 2002 and 2001, the proportion of whites in the highest earning bracket fell by one percent and their numbers in the lowest bracket also fell, by four percent, implying an increase in the middle class. Year over year, the proportion of blacks in the highest earning bracket rose by two percent but blacks' percentage in the lowest bracket increased by seven percent. This last figure suggests that while some blacks are making progress, the percentage of blacks in the lowest income bracket is increasing at a much greater rate. This implies that the ranks of the black middle class are thinning, and shifting to the lower income class; a very negative trend.

The graphs tell the story over a three-year period.

If these demographics continue, we are in trouble. While Bermuda already has a large middle class, it is not growing. This CURE trend implies that despite the handsome GDP or high average personal income numbers etc., despite these great headline numbers, the black middle class is shrinking, and therefore, the gap between rich and poor is widening. Why has the PLP Government not publicly recognised and addressed this situation?

Economic empowerment is supposed to have the opposite effect. It is supposed to swell the numbers of the middle class at the expense of the low income classes, particularly among blacks. But today that's not happening.

Every successful nation must have a sound macro-economic policy to produce growth, and, over the decades, Bermuda's has worked remarkably well. But top down policy, "trickle down economics," as the Clinton Administration called it, doesn't always work for everyone. That's why we have to have empowerment programs: to help those people in those sectors where the benefit is not trickling down enough.

The widening of the gap between rich and poor has implications for housing, education and crime too. It's no wonder there is unprecedented need for so-called affordable housing. Of course, there is no such thing in Bermuda as low cost housing, but subsidised housing can be made affordable. We have seen over the decades that affordable housing crises have occurred in cycles. However, on this occasion the crisis has not ended, partially because of Government's bungling in meeting the need but also because more people are falling from the middle income class into the lower income class, thus sustaining the pressure for lower income housing. Yes friends, the housing crisis is an element of a broader economic problem.

The widening of the gap between rich and poor has had an effect in education. Public confidence in public education in Bermuda has never been lower. In a recent survey of CEO's of exempted companies they were asked to rate public education today as compared to five years ago. The number of CEO's that gave public education an "F" has almost doubled. (Incidentally their unfavourability rating of the Government during that same period has increased by almost seven times.) Why should we care what these people think? Because they're the ones at the tip of the spear as far as economic growth of Bermuda is concerned. That's why.

There is lots of blame to spread around. I have restricted most of my public comments regarding this subject to the rise in dysfunctional homes and families which produce children who arrive at school without the basic tools with which to properly accept school instruction. Surely this situation is connected to an increase in lower income families, families who are under elevated stress to find adequate housing and other necessities for existence. Thus the crisis in confidence in public education is at least partially the result of a broader economic problem.

Another area of concern is the recent upsurge in crime, particularly gang violence. Many of us wonder why our young people seem to want to imitate all the worst features of American society. Government has recently passed a series of tough measures through the legislature to increase the punishment for violent and gang related activity. I support these measures. But it doesn't take a rocket scientist to figure out that gang activity is most often a byproduct of urban poverty. Not just in the USA or among blacks, but among many races and in many different countries. We should view the rise of violent gang activity in Bermuda as a byproduct of the widening of the gap between rich and poor.

How do we narrow this gap? One of the answers is economic empowerment. Assisting and encouraging small business is an important component of economic empowerment. We Bermudians are very entrepreneurial people. How often do we see a truck or van drive by with something like Joe's Trucking, Smitty's Electrical or perhaps Bob's Construction emblazoned on the side? Very frequently, I reckon. These small businesses are everywhere on this Island.

While today our national focus appears to be on big business, small businesses appear to be existing in a kind of Alice's Wonderland, a world of contradictions: on the one hand they're everywhere but on the other hand, invisible. Small businesses are defined differently in different settings. In the USA almost all Bermuda based businesses would be considered small. So in the Bermudian context small businesses are really, really small businesses. In fact, in my review of statistics on small businesses in Bermuda, no numbers can be found for enterprises with fewer than ten employees. Now we all know there are a multitude of business enterprises in Bermuda that fall into that category. So first of all, someone, either Government, probably in the form of the Small Business Development Corporation, or in conjunction with a private industry group, needs to survey this important but invisible sector to find out its characteristics, needs and principal issues. Being seen everywhere is fine but being invisible is not.

There are many elements of this problem and therefore there are many different actions that can turn it around. One of those actions is to encourage and assist Bermudian entrepreneurs to use their imagination, resources and energy to pull themselves up by their bootstraps and create wealth. I'm not talking about hand outs, but I am talking about removing bureaucratic barriers that hamper business growth, I'm talking about increased business educational programs, I'm talking about different financing solutions to finance growth.

When the PLP became the Government they beefed up the data collecting power of CURE. Now that the data is rolling in, what are they doing about it? We mustn't allow this insightful work to just gather dust. Many Bermudians have observed to me that they sense a tearing of the fabric of our society. Well, here is hard evidence of that. The widening of the gap between rich and poor is real and must be combated with real policies and actions, not this vague undefined thing called the Social Agenda.

@EDITRULE:

Sen. Richards is a United Bermuda Party Senator and the Opposition spokesman for finance in the upper house.