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IB needs to produce more jobs for Bermudians

In the second of her two part series about the People's Campaign,

Cheryl Pooley calls for low-income workers to be paid $20 an hour

In 2013 1,100 additional Bermudians lost jobs even as the economy showed minor signs of recovery with exempt and local incorporations being the highest reported since 2006. It stands to reason that moderate growth in IB is not growing jobs for Bermudians. Reinsurers, Banks, Accounting, Hedge Fund and Legal Firms have streamlined their work force and the majority of jobs are held by non-Bermudians because only a minority of the Bermudian population can afford overseas college education. Craig Simmons, economist and Bermuda College lecturer, stated Bermuda's economy is at risk of total collapse as long as we remain totally reliant on international business.

He recommends that Government facilitate local business growth by applying the same commitment in terms of listening, courtesy, privileges and tax exemptions that are extended to IB growth. The Minister of Economic Growth, Dr Grant Gibbons, MP, announced Bermuda proved to be the second busiest offshore jurisdiction in the first quarter of 2014; yet the total number of Bermudians out of work or underemployed totalled 1,800. In order to increase profitability banks, hedge funds and Bermuda exempt companies are outsourcing accounting and administrative functions to other developing countries which is why there is no reduction in the jobless rate.

Introduce Progressive

Taxation on Multiple

Property Owners

Wealthy Bermuda landowners should be taxed on multiple property ownership.

Since the first settlers arrived on our shores and the lands were divided by the shareholders of the Somers Company into 8 tribes, land wealth has been concentrated in the hands of a few rich families who sat atop an oligarchy system that ensured their economic dominance. The Bermuda economy has historically been steered by patrimonial capitalism and inherited wealth among this privileged minority was amassed when a large portion of the population was prevented from gaining access to economic opportunities. It's time for these wealthy multiple property owners to pay more taxes.

Increase Minimum Wage in Hospitality and Low

Margin Businesses

With respect to the minimum wage in the hospitality industry, this should not only be increased to $20 per hour, but should also include workers from the other low paid areas such as landscaping, farming, supermarkets, cleaning services and retail. Former US presidential candidate, attorney and political activist Ralph Nader in an interview with the Daily Ticker stated that raising the minimum wage is akin to “a stimulus bill … more sales, more jobs, more purchasing power for workers”.

Some business leaders say raising the minimum wage could curtail hiring especially at low-margin restaurants and retail shops because they can't easily digest an increase in labour cost. In this regard, Government could reduce taxes for goods imported for restaurants and shops.

The European Union has estimated it is losing collectively

$1.3 trillion from tax avoidance schemes such as Google which avoids $2 billion in taxes yearly by shifting profits to a Bermuda subsidiary via Ireland and the Netherlands. The Bermuda Government could introduce a one percent tax on dividends declared by exempt businesses such as Google as a substitute for reducing taxes of imported goods for the low-margin businesses.

The Labour Party leader, Ed Miliband, proposed at the end of 2013 steps to improve the economy such as a price freeze on energy companies, a cap on bank interest rates and support for increasing the minimum wage. Similarly, it's time for Bermuda's labour party to table progressive tax legislation as well as introduce legislation to increase the minimum wage because it is the right thing to do, it will help boost our economic recovery and it is something that the OBA will not do because they represent the high earners, wealthy landowners and business interests. While it takes politicians to introduce legislation to salvage our economy from the brink of despair, the true essence of the issue is a social one that has stripped away the ability of many Bermudians to meet their financial obligations and has many hanging onto the roofs over their heads by fingernails.

A portion of the taxes raised from high earners and wealthy landowners should be split between paying off Bermuda's national debt of

$1.77 billion and setting aside money in a fund to support the entrepreneurial aspirations or redirecting of careers for Civil Servants affected by looming job cuts.

Increasing the minimum wage in low skilled industries will allow for Bermudians to once again enter the hospitality industry because they will be able afford to live off a $20 per hour minimum wage versus the current medium salary of $35,243 that is not sustainable in an economy that is the third most expensive place to live in the world. And according to the People's Manifesto providing post secondary education funding for Bermudians that cannot afford it, will help prepare our future generations to compete in a sophisticated economy.

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Published May 15, 2014 at 9:00 am (Updated May 15, 2014 at 1:28 pm)

IB needs to produce more jobs for Bermudians

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