FRIDAY, NOV. 23: On December 17, voters must decide. Here are some important facts to help you.
Basic job creation
Foreign investors who set up global businesses and operate from Bermuda create new Level ONE [L1] jobs. These L1 jobs then create a need for new Level TWO [L2] jobs that provide accounting, legal, fund management, etc… services. The combination of L1 and L2 jobs creates a need for L3 and L4 jobs in logistic support, infrastructure, legal system services, hospitality, etc….
L1, L2, L3, L4 jobs create a further demand and need for L5 and L6 jobs. These L5 and L6 jobs provide miscellaneous specific and general services and support and other infrastructure. Government jobs commence around L3. Bermudians can be employed at all six levels – if they have necessary skillsets.
What has happened?
Between 2009 and 2011, in IB, over 684 L1 jobs disappeared. At least 579 jobs went at L2. The loss of those 1,263 L1 and L2 jobs had the knock-on effect of causing job losses at L3 through to L6. Closures of Computer City and Retail generally, the shutdown in Construction, early retirements at Butterfield Bank, downsizing at major law firms, and so on… all represent knock-on job losses at L3 through to L6.
The 2012 Labour Force Survey reported 3,026 unemployed Bermudians in May 2012. With Bermuda’s economy still shrinking and businesses still shutting down, that number has now probably passed 3,500. All are unemployed Bermudians. Business closures and job losses are continuing.
Fix 1: Government can immediately eliminate unemployment by hiring all 3,500 unemployed Bermudians and pay each Bermudian person $50,000 a year. But where will that $175 million base pay come from? Unworkable!
Fix 2: Three hundred new Entrepreneurs can take a Government grant and go into the three EEZ’s. Each can start a new business that needs $200,000 a year turnover. Who will be their customers? Use their services? Buy their products? Can residents suddenly start buying $60,000,000 of ‘new retail services’ and ‘new retail goods’? Unworkable!
Fix 3: Bermuda imports 98% of all that it consumes. This requires foreign exchange. Any primary business operating in Bermuda must sell to the outside world and bring in foreign exchange. Nail technicians doing Bermudian nails don’t have the economic impact of nail technicians doing tourist nails. So a large proportion of any new jobs must bring in foreign exchange.
Who pays for lunch?
IB brings in $5 for every $1 brought in by Tourism. In 2010, IB brought in $1,963 million while Tourism brought in $384 million. The 4,077 Level ONE people working in IB contribute about $90 million in Payroll Tax [At only 11 per cent of the workforce, the 4,077 L1’s in IB contribute a disproportionately high 29% of the total expected Payroll Tax of $312 million.]
The 7,000 Level 4 and 5 people who work in restaurants, hotels, and retail don’t pay Payroll Tax at all — or pay a very low rate. One taxpaying IB worker carries the tax burden for [buys the free lunch for] two non-taxpaying workers in the non-taxpaying restaurant, retail, and hotel sections.
In 2008, Bermuda had about 67,000 residents. 67,000 people residing in Bermuda buy 67,000 people’s worth of ‘leckalight, food, gas, clothes, and so on, About 17,000 of these are non-Bermudian. These needed to rent spaces for accommodation and work.
By mid-2012, fewer than 62,000 people resided in Bermuda. In 2012, there are at least 5,000 fewer residents, which has caused our economy to shrink.
Additionally, the loss of 5,000 residents reduces the requirement for L3, L4, L5 and L6 jobs and workers.
Creating jobs in 2013/14
Regenerating Bermuda’s economy requires the creation of new Level ONE [L1] jobs. This will then create a need for more L2 to L6 jobs. Bermudian investors cannot and do not create L1 jobs. Regeneration requires foreign investors to come to Bermuda, set up businesses in Bermuda, and employ L1 people who will reside in and work in Bermuda.
That is the only way that new and needed L2, L3, L4, L5, and L6 jobs will be created. Every other promise or method is false or unworkable.
On December 17, along with thousands of other Bermudian Voters, you have to make a decision.
Listen to the political parties. See through the camouflage, noise, and spin. Hunt for numbers and facts. Use your intellect. Do your own thinking. Trust your own judgment.
Your vote will be about the economy, your job, and the next 10 — yes 10, not five — years.