Pay attention, for these are dangerous times
As many of us are aware, several town halls are being held on the cost of living here in Bermuda. It is an issue that gets right to the core of what is wrong with our society. Be it the increasing levels of crime, the diminishing opportunities we have to spend with our family, the crushing overheads to run a business, cost and its respective burden is a universal phenomenon that unites Bermudians across the board.
Remember that “little” statistic everyone went nuts about? The one where Bermuda printed a 126.71 in regards to the respective cost of living?
The highest in the world. The midyear update is 141.74.
Indeed, while the initial print is discussed in the first cost-of-living panel, it glosses over the implications of the data. It lacks detail and fails to provide real, crystal-clear information that would help us understand what is really occurring to our island home. The data I am referring to comes from a crowdsourced global database — Numbeo.
This cost-of-living index is a relative indicator of consumer goods prices, including groceries, restaurants, transportation and utilities.
If a city has an index of 120, it means it is 20 per cent more expensive than New York City. In the context of the above, what this means is not only is inflation higher than 4.7 per cent, cost of living has increased by almost 12 per cent since we ranked world No 1 in the initial release. Worse still, as US CPI is an average of the entire country — not New York — this does not even begin to speak to the reality we find ourselves in. That we are 41 per cent more expensive than New York City is shocking. That we have kept pace with inflation — and then some — is deeply disturbing.
Finally, this is a calculation that was done outside of Bermuda using data that is almost certainly several months old at best. Where we run the numbers using statistics from today, the end result is likely even higher still.
Where do we go from here? Like myself, I encourage each and every one of you to start keeping notes on your expenditures. Do the maths. Pen and paper! While you are likely suspicious of the Government’s inflation data, you now have an idea of how bad the problem could really be.
As a business owner who imports items for a living, a citizen who shops locally for goods and services, I have kept meticulous records for every cost I have absorbed for the past five years. As painful of an experience as it has been, I am one of the fortunate few who have been able to tighten his belt and take the licks. Many others, customers who come through my doors, friends and persons I know as acquaintances are not so lucky. They are now having to choose which item at the grocery store they have to put back on the shelves. What extracurricular activity their children must give up on to pinch pennies. How often a week they get to run their dishwasher. If they can take any time off whatsoever.
I feel deeply for these Bermudians. They are my brothers and sisters, and while you will hear of a town hall every now and again, of a politician who makes a lofty election promise or a public-private programme that speaks to making a difference, nothing ever gets done in a way that creates real tangible results.
These panels occur at a time when there is a leadership challenge for the premiership of Bermuda. The decision of such a contest will determine the direction of the next five years. There is much that can be said on this in particular, but I will leave this part of the discussion to persons who wish to voice their political opinions.
What I will do is remind Bermuda that we became world No 1 for our cost of living in an environment of “easy money” and credit. In a time where interest rates were near zero at the US federal level. What becomes of us as base lending rates continue to soar? What happens when we have no ability to roll over existing debt for cheaper borrowing? How will we fund our social safety nets? Provide welfare for those in need?
What if like in 2008 we enter a global recession? What if we are already in one, as I have argued in other venues, and we dig deep into a depression? What becomes of Bermuda?
I implore anyone reading this to take the problem seriously. To put aside your differences and roll up your sleeves and get to work. The implications of a situation that deteriorates any further will bring Bermuda to its knees.
I pray we are not yet too late.
SEAN DAVID WHITING