International firms create jobs and wealth

White-collar guest workers in Bermuda are among the wealthiest in the world.

A new report shows that more than 27 per cent of professional expats in Bermuda earn a quarter-of-a-million dollars or more annually.

The HSBC Worldwide expat economic survey — published this week — put Bermuda at number three in a chart of the best countries for professionals to make money.

In pure wage terms, Russia and Singpore are the only countries that offer more cash.

Our international business sector — cornerstone of the island’s economy —is the chief employer of professional guest workers. It is widely accepted that the industry has been good for Bermuda’s economy. But has it been good for everyone?

The average monthly rental price, according to statistics published by realtor Coldwell Banker, is a little more than $5,000. A gallon of milk costs $10. For those Bermudians to whom the wealth has not trickled down, cost are daunting.

Charles Brown, of Bermuda’s Sustainable Development Unit, said: “When we say it has been very good for Bermuda we need to define ‘good’.

“The economic benefits that have contributed to a number of quality of life issues we now enjoy are unquestionable. Now that the economic fortunes have demonstrated their cyclical nature, we are seeing some reassessment of those references to ‘good’.

“There are challenges that might contradict that blanket statement.”

Statistics analyst Cordell Riley said the influx of wealthy guest workers to service the industry, which replaced tourism as the main pillar of Bermuda’s economy in the early 1990s, had an obvious effect.

 “When international business came in you started to see the influence on the cost of living.

“They earn high salaries, they can afford to pay high rent and that does have an influence.”

The upward trend of rental prices, however, has actually slowed in recent years, in tandem with the global economic slump.

Realtors suggest that house prices have dipped as a result of a slowdown in international business growth.

But the overall influence over the past two decades has been to push prices up.

Mr. Brown said: “It is certainly true that rents have gone up. I’m not an economist but the simple laws of supply and demand say that there will be an influence on the price of housing — even the price of basic goods like bread and milk.”

Mr. Riley, who runs Profiles of Bermuda, said the sector had clearly made many Bermudians wealthy. But he questioned whether the ‘trickle down’ effect had reached everyone.

“It has made people wealthy – the biggest impact has been on people who have places for rent, accountants, lawyers, those who service the industry — but it doesn’t branch out significantly after that.”

Buddy Rego, a realtor for 35 years, said Bermuda would not see the same rental prices without the influx of guest workers to service international business. But he added the influence was felt more at the upper end of the market. He said rent control and Government housing were there to help keep things affordable at the other end of the spectrum.

Buoyant market

“If you pay rent you are going to be paying more as a result of the more buoyant market they [international business people] represent — but without them we would be a fishing village right now.

“It is difficult to draw a comparison because without them we would be a different culture and a different community.”

Mr. Rego, of Rego Sothebys International, said things were starting to look up for renters, with a “softening” of the mid-market.

“If you are a prospective tenant you should be satisfied that the market has moved for the first time, in quite some years, in the direction of the consumer.”

And there are more consumers out there. The overall trend of the last decade has seen a steady influx of more guest workers.

According to the Department of Statistics there were 9,136 non-Bermudians identified as working in Bermuda in 2000. By 2009, that figure had risen to 12,731.

Mr. Brown, whose unit is tasked with looking at the long-term social and economic factors that influence quality of life in Bermuda, said the island needs to have a serious discussion about how much economic growth it can sustain.

“What are the social impacts of the people we invite to come here and support our economy? It increases competition for limited resources, demand for energy, vehicles on the road, open space, playing fields. These are all things that affect quality of life in Bermuda.”

Labour Day special

As Labour Day approaches, the Bermuda Sun takes a look at the island’s immigration trends. We examined the influence of a reported influx of low-wage unskilled labour from overseas combined with the more familiar faces of the well-paid international business workers and asked — where does this leave regular Bermudians?

• Trapped in labour limbo
• Working long hours for low pay to send money home
• International firms create jobs and wealth
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• 'I never thought I'd see the day electricians finally got certification'
• Lack of regulation the root cause of labour issues