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With the global layoff and downsizing wave roaring, tsunami like, onto our shores, I've looked at how this tsunami will impact our unique economy.

With proper national management, us lot are unlikely to suffer any significant long-term unemployment; certainly not as economists and statisticians define unemployment. These 'axperts' define an unemployed person as someone who meets all four of these criteria: One - must be currently available for paid work. Two - must be without a paying job. Three - must want a paying job. Four - must be actively seeking a paying job. All four factors must be present.

      So if a Bermudian is laid-off or made redundant, that Bermudian must then be available for work, wanting to work and looking for work. As long as he (she) stays with all these factors, she (he) is unemployed. As soon as that Bermudian finds a paid job, he (she) becomes an employed person again and exits the unemployed group.  

So if a Bermudian bartender gets laid-off, looks around and, within five days of being laid-off, finds new employment as a painter, he won't even get counted as being unemployed. If he takes a month to find a new job, he'll only count as unemployed for that month.

Same for a downsized insurance underwriter or banker. If she takes her redundancy, takes a two month holiday, but finds new employment that starts at the beginning of the third month; she won't get counted as unemployed either.

     So I've just shown you how two Bermudians can actually 'lose their jobs' and yet not be counted as unemployed.  Strange maybe, but true.

     Overall then, many Bermudians can lose their current jobs, can then look for work, find new work, and be back at work so fast that they do not even make it into the ranks of the people who are counted as being unemployed.

     We Bermudians have the flexibility - combined with the pressing need - to always have an income. So Bermudians (though we all know someone who won't) will scramble and find a new job.  We'll turn our hands to almost anything.  We've done it before.  We'll do it again. It's how we've survived 400 years.

    Different story with our guest workers. If a guest worker becomes jobless, he (she) doesn't have the right to scramble and seek and find new work in Bermuda. A laid-off guest worker has to pack and go.

      That means that he doesn't become a Bermuda statistic. Instead, Bermuda exports its unemployment. That guest worker goes home and becomes a statistic in his (her) home country.

Economy will contract

Reacting to the global economic tsunami, Bermuda's national economy can, and probably will, contract and discard jobs. In 2007, Bermuda counted 39,851 filled jobs. Assuming that the count reached 40,000 in 2008, and assuming that in 2009 Bermuda 'loses' as many as 2,000 jobs; then Bermuda's 2009 economy might be one in which we find that there are only 38,000 filled jobs.

      In 2007, there were 27,272 Bermudians filling jobs. If, when we count in this year (2009), we find that there are still 27,272 Bermudians filling jobs, we'll have shown that there was no overall national job loss for Bermudians.  27,272 Bermudians filling jobs in 2007... 27,272 Bermudians filling jobs in 2008 ..... about 27,272 Bermudians filling jobs in 2009.  No change. Thus no real unemployment - for Bermudians.

       Job losses? Yes. Job changes?  Yes. Job shifts? Yes. Unemployment? No!

      But it's not as smooth as it looks.  Beneath that surface smoothness, there's the roiling result from departing guest workers.

      Our Bermuda laws prevent guest workers from owning anything except a car, bike, clothes, and their good names. They are forced to live in rented accommodation. If Bermuda's national economy contracts to where it only employs 38,000 people, and assuming the government manages properly, then the whole national contraction in jobs can be borne, essentially and ultimately, by repatriated expatriates.

      Two thousand fewer 'expats' will translate into anywhere from six hundred to eight hundred (or more) freshly emptied rental units. Six hundred newly empty rental units will mean a direct monthly rental income loss of at least $600,000. Probably well over $1,000,000 per month.

      Though Bermuda's national economy may not show unemployment, the back-wave of lost rental income will ripple throughout our economy. This will be the first real impact. For many Bermudian individuals, it will feel like a hard kick below the belt.

      That's how it will start with us lot at 32N64W. n

 

NB: In January 2009, the U.S. recorded 11,600,000 unemployed Americans; with 3,200,000 having lost their jobs since December 2007. The U.K. is currently showing more than 2,000,000 as unemployed.

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