Our private sector must grow, to expand tax base

“He ‘aint heavy, he’s my brother…” was the refrain in a popular hit song.

I’m not sure that today’s Bermuda private sector worker who is working and paying taxes in Bermuda will happily sing that song about carrying his or her Government worker brother or sister.

I’ll just lay out the facts. You can then decide for yourself.

In Bermuda, in 2006, according to figures from the Department of Statistics, Government, and the five main Quangos, private sector worker numbers peaked at 33,061. In 2006, there were 6,625 people working in Government and the five main Quangos [BHB, BMA, BHC, BLDC, and WEDCO].

So in 2006, five private sector workers were carrying — paying taxes for — each one Government person [33,061 private divided by 6,625 government+].

2007 – 39,851 total NWF less (5,094 G + 1,743 Q) 6,837 = 33,014 Prv Sec (down 47)

2008 – 40,213 total NWF less (5,569 G + 1,827 Q) 7,396 = 32,817 Prv Sec (down 197)

2009 – 39,520 total NWF less (6,006 G + 1,934 Q) 7,940 = 31,580 Prv Sec (down 1,237)

2010 – 38,097 total NWF less (5,823 G + 2,039 Q) 7,842 = 30,255 Prv Sec (down 1,325)

2011 – 37,399 total NWF less (5,793 G + 2,062 Q) 7,855 = 29,544 Prv Sec (down 711)

2012 -  35,443 total NWF ….. There is currently no breakdown available for 2012  …

Things changed. The chart above shows how things changed [numbers in bold are peak numbers]:

Between 2006 and 2011, the private sector lost 3,517 jobs. Conversely, the Government sector added 1,230 jobs. So between 2006 and 2011, there was one Government job added for every three private sector jobs lost.

A heavy load 

Middle School or Primary School arithmetic shows that by 2009, four private sector workers were carrying – paying taxes for – each one Government person [31,580 private divided by 7,940 government+].

The Government ‘brother’ had, in a sense, gotten heavier because he was now being carried by four instead of five private sector workers.

Just two years later, in 2011, there were fewer than four private sector workers carrying each Government person. So the Government ‘brother’ was getting even heavier.

No figures yet for 2012; or for 2013. 

But given Bermuda’s still deepening recession that is being driven by Bermuda’s loss of residential population, there could soon only be three private sector workers left to carry each Government person. 

Sliding towards a three carrying one situation, are further Government Personnel Cost cuts - Inevitable? Unlikely? Think about it. Then decide.

Must the private sector start growing again? Think about it. Then decide.

For anyone who chooses to read something ominous and racist into my use of the term ‘brother’, remember this.  It comes from a popular song that reached the top ten in the UK and US. Go on the ‘net’. Google it. YouTube it. After listening, be honest — to yourself — and re-examine any thoughts that you might have had about my use of the word ‘brother’.