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Is education level the key?

Photo by Glenn TuckerDozens of young Bermudians attended a video presentation by the Bermuda Foundation for Insurance Studies in 2007 encouraging students to consider careers in the insurance industry.

The figures don't lie that is the claim of those who believe racism is at the heart of the large and lingering gaps in wealth and income separating Bermuda's races.

While few would doubt that the lot of whites is generally better than blacks in 21st century Bermuda, are other factors also at play?

Recent headlines showing blacks earned an average salary of $50,539 while whites earned a median average of $71,607 hit a nerve with blacks sick of second best in a very wealthy island.

But the distorting effect of international business which draws predominantly white employees from all over the world has to be factored in.

CURE's latest stats tell us that 56 percent of white employees are non-Bermudian of which 49 percent are work permit holders.

How can this affect salaries? Here's an example a new company moves to Bermuda and it's headed by three white men paying themselves $1 million apiece per year. They hire ten white employees and ten black employees at $100,000 per annum per person which would seem fair.

But the fact that the three high earners are now in Bermuda will add massively to the salary pool in the white column, despite some rough parity at the lower level.

Bermuda Employers Council (BEC) executive director Martin Law said that as an internationally competitive jurisdiction Bermuda should expect there to be a much higher percentage of white male senior executives in international business.

"This is a high end industry that draws the best of the best from a worldwide pool that is itself made up of predominantly white male skilled and experienced persons," he said.

For some the real question should be how are Bermudians doing between themselves, but the income gap where whites do better than blacks is significant everywhere you look.

Among Bermudians the median annual income for blacks is $49,611 while for whites it is $65,749, and the gap is widening.

Among Bermudians in 2004 the picture was that black Bermudians were earning a median income of $42,771 while whites were on $55,571.

Bermudian whites are ahead in earnings compared to Bermudian blacks in six out of nine occupation categories, according to Government's statistics department. Even among non-Bermudian work permit holders there is again a significant differential and again the gap is widening.

In 2008 blacks expats are on $63,115 while white expats have a median annual income of $78,814. In 2004 black expat workers were on $52,550 while white expats were on $64,165.

It all seems dreadfully unfair unless you take other factors into account.

The BEC argue educational inequality not racism lies at the heart of Bermuda's large wealth gap between the races.

Mr. Law said: "Racial disparity within the Bermuda workforce is related to a legacy of limited opportunities for black Bermudians due to inadequacies in education and subsequent experience.

"From this history of limited opportunity Bermuda has certainly moved to a position that has recently been succinctly articulated by Dr. Brimmer, the Ministry of Finance's economic consultant.

"In a panel discussion this summer, he expressed the view that virtually all the differences in income levels between Bermudians of either race are fully explainable by differences in skills as opposed to race and that once skills are acquired the race difference in incomes disappears."

However, this too has been challenged by Government in the past.

In 2007, at the height of the controversy over the proposed Workforce Equity Act, Government put out figures, based on 2000 census figures, showing blacks had more degrees than whites.

It showed 944 BA degrees were held by black Bermudian females, 718 by black Bermudian males, 586 by white Bermudian males and 447 by white Bermudian females in 2000.

The figures also showed that black Bermudian females recorded the largest number of degree attainment at the Masters level with 479. Black Bermudian males held 201 while white Bermudian males had 105 and females had 108.

But the Census also showed that blacks with college degrees earned median monthly incomes of $4,799 while whites in that category earned $6,329. Uneducated blacks earned $3,346 and uneducated whites $4,012.

But despite the weight of evidence indicating massive unfairness even the Commission for Unity and Racial Equality (CURE) recognises more figures are needed to give the total picture of what is really going on in the workforce.

Asked why whites were earning so much more than blacks CURE Chair Michelle Scott said: "We cannot provide a conclusive answer to this question without an in-depth investigation using qualitative survey techniques.

"Based on initial feedback from employers, the gap may be partly attributed to educational levels and/or skill sets; however, this cannot be substantiated. Additionally, employment data indicates that blacks are the majority at levels of employment where income is at a lower level while the opposite is true for whites."

Ms Scott said ever since CURE had started doing its Annual Review of the Workforce Survey Report (ARWS), starting in 2000, racial disparity has been consistent, despite limited progress toward parity.

The report to date has not been designed to measure the progress of race relations; rather it has only gathered data on race and made assertions based on data. And Ms Scott revealed that CURE has begun researching ways to measure progress in race relations.

"We can then respond with greater certainty on attributions regarding racial disparity for various factors, including salary, promotions and education."

Employers argue that CURE underestimates both the number of black Bermudians in the workforce and also the number of black Bermudians in high positions because only 70 percent of the workforce is included in the ARWS survey.

Businesses with fewer than ten employees are not covered and the BEC argue that it ignores small businesses where black Bermudian entrepreneurs could be thriving. But Ms Scott said CURE's workforce demographics are highly comparable to the Employment Survey's workforce demographics which refer to all jobs on the Island.

"Because our proportional data results are comparable to Employment Survey data results, across a number of variables, it is highly probable that our results for income and level of employment can be considered reliable indicators of what is happening with the entire job market."

Ms Scott said that CURE will commission a research project to get answers from the workforce in companies with less than ten employees. "Alongside quantitative data, qualitative questions will be collected, such as why small business operators decided to venture on their own and also their perceptions as small business owners on race and how it impacts their ability to maximize marketability and growth potential."

CURE's own figures show blacks are the most numerous group at middle management level with a figure of 47 percent, while blacks make up 53 percent of the wider workforce. But at the executive level black representation drops to 27 percent.

Ms Scott said: "The data collected to date suggests that 'the glass ceiling' policy might still exist for identified sectors, levels, and groups; and that race could be a significant factor."

It's clear that within CURE patience it fast running out with the hope that employers will reform themselves. And already some within Government are signalling it's time to re-table the Workforce Equity Act which would fine companies which didn't put plans in place to hire and promote black Bermudians in proportion to their numbers in the wider workforce.

Ms Scott said: "The CURE Code of Practice was adopted in 1997 as a recommended guide to equity policies and practices; it was widely accepted by industry and other organizations in Bermuda as a framework for equity policies and practices in the workforce. The slow progress toward achieving equal access to employment opportunity for blacks, as compared to whites in Bermuda, suggested the need to make the Code of practice mandatory. The proposed Workforce Equity Act (2007) was such an attempt."

At that time industry expressed its opposition to new legislation and re-affirmed its commitment to equality of opportunity practices, said Ms Scott. And so the bill was shelved. While indicating the proposed legislation is not a priority issue, Ms Scott added: "Industry has the occasion to take further action to embrace policies and procedures that demonstrate commitment to fair and equal access to employment opportunity for all Bermudians and all racial and ethnic groups."

* Tomorrow: Why are more black Bermudians not making it in international business? The Royal Gazette talks to Darren Johnston who is scaling the heights of the accountancy world to get some answers.