“work-permits generate Bermudian jobs” vs. “Bermudian jobs should be created first”

It is easy to take knowledge for granted.  Given two statements “work-permits generate Bermudian jobs” vs. “the only job growth is non-Bermudian” it can be easy for inherent bias to drive support the latter over the former.  People are inherently biased towards protectionism and anti-foreign sentiments as part of our natural instinct.  If you lack the underlying knowledge to be able to validate either statement then you lean on bias. This is why it is so important that statements like “work-permits generate Bermudian jobs” are validated and proven.

Let’s compare the two statements.

“Bermudian jobs should be created first”.  

Justifying this statement doesn’t require a great deal of knowledge.

You need to know

  • Bermudians need jobs and are unemployed
  • Non-Bermudians have lots of jobs
  • Companies are hiring non-Bermudians
  • “Non-Bermudian was the only category with growth” (if you don’t realise that when you remove government attrition, Bermudian jobs also grew)

Then you add bias

  • “I can think of many cases where a Bermudian was unfairly passed over by a non-Bermudian” (which is founded in some truth)
  • “We’re only importing people from [x] who are taking all of the Bermudian jobs”
  • “Surely a Bermudian could do any of those jobs, they can’t be that difficult”
  • “Companies should be forced to do more, after all, they’re making a fortune being here in Bermuda”

Lack of knowledge makes the conclusion pretty easy.  You don’t need to understand a great deal about how our economy works or why this happens.  It seems like a straightforward solution.  You take the non-Bermudian jobs and give them to Bermudians.  Problem solved, right?

Unfortunately it is far more complicated than that.  Too many simply don’t understand how complex our job market is.  How many Bermudians would sign up to a program to only ever be seen by Bermudian doctors and surgeons?  Likely few because there simply aren’t enough.  Most every Bermudian can understand that being doctor is a complex skill set and appreciate that we need to import doctors.  Far fewer understand that other skill sets can be just as complex and that asking a company to only hire Bermudians for highly skilled roles when there are shortages who can perform them is the equivalent of introducing an “only Bermudians can be doctors and surgeons” policy.

Let’s now look at the other statement

“work-permits generate Bermudian jobs”

Justifying this statement requires a great deal of knowledge and actively competes with common bias.  There are no reports or statistics that back up this statement.  No research has been done.  If you walk up to any woman or man on the street and proclaim “work permits generate Bermudian jobs”, how many would agree with you?

In order to agree with this statement you need to know and accept

  • The difference between work permits for high skill jobs vs. low skill jobs
    • High skill jobs tend to rely on assistance
      • an executive, manager or group of professionals may rely on an administrative assistant, a job which is typically filled by Bermudians
      • Senior skilled professionals tend to hire and train junior professionals
        • Often times these are Bermudians
    • Low skill jobs reduce costs
      • Example: A foreign waiter may help keep a restaurants costs under control which makes eating out more affordable which makes tourism in Bermuda more affordable which helps prop up other jobs filled by Bermudians
      • Bermudians cannot build a reasonable life on some of the low skill service jobs but to push up the costs of those jobs would push up our cost of living
      • Efficiency is always much harder to sell than growth
  • Work permit workers drive spending in our local economy
    • Work permit holders contribute a very significant portion of local spending in our economy, of which there are no official reports or statistics
    • Bermudian mortgages are propped up by work permit holders driving more flow through our economy allowing Bermudians to accumulate wealth.
    • Bermudian health care is propped up by healthy imported workers who pay high rates (we are among the highest in the world on health care spending) to cover the costs of our aging population
  • That our economy is NOT like a traditional one, we are service driven and produce very little domestically
    • You cannot use traditional economic models for our economy and a basic knowledge of economics can betray this understanding
    • Our economy produces very little, exports almost nothing and relies on imports of almost everything to survive (food, fuel, goods, materials).
    • Our economy is primarily service driven both for exports and internally
    • In order to be able to trade with foreign countries we need to generate something of exchange. We do that through services
      • We import foreign expertise through an environment attractive to busineses that deal internationally
      • We rely on foreign expert labor as our population is unable to compete at the olympic level that our international business competes at.
  • That for much of the boom years we had over employment which caused the ratio of Bermudians/non-Bermudians jobs to be skewed

It requires a great deal more explanation and a good reason why this writer supports the suggestion of a “non partisan body focused on economic public relations”.

For example, we should be able to readily explain with real statistics the actual number of Bermudian jobs created by every non-Bermudian job.  As an example, based upon data I could pull together I have seen that from 2003-2015 we have maintained a ratio of roughly 3 Bermudian jobs for every 1 non-Bermudian+PRC.

Note the dip from 2004-2009 was likely due to Bermudian overemployment and us overheating the economy with too many expat jobs

This of course is a very gross approximation and could be whittled down to certain categories but it gives a general idea.  We need long term statistics on this sort of data to verify this kind of ratio over the long term.  Did we have periods of lower employment before our work permits started rising?  Can we distinguish between categories to know how much of an impact each has and clearly explain it?  Overall it would be much preferrable to be able to say, with evidence that “every work permit creates 3 Bermudian jobs” than a generic and unproven “fact” that “work permits generate Bermudian jobs”.

The government, regardless of party affiliation should be focusing resources on clearly explaining the jobs expats create.  We should have reasonable reports and statistics going back historically showing how much they contribute to the economy and how many jobs are created for every expat we bring in.

 

I challenge Michael Fahy to prove that work permit increases lead to Bermudian jobs

Buried within the “Income inequality linked to violence” article in today’s Royal gazette are some interesting comments made by the Minister of Tourism, Transport and Municipalities Michael Fahy.  He suggests it is a fact that the number of Bermudian jobs are correlated to the number of work permit holders.  How can he claim that is a “fact” and can he prove it?

Here’s the rub.  I wholly agree with Mr. Fahy’s hypothesis of a correlation between the rise in work permit jobs and subsequent rises in Bermudian jobs.  I however, cannot prove it so I cannot claim it as fact, only a hypothesis.

I would certainly love to be able to show charts of the last 30 years demonstrating a clear link between the rise in non-Bermudian jobs and how they impact Bermudian jobs.  I would love to be able to demonstrate that the rise and declines in predominantly Bermudian categories like Clerks (ie Secretaries) are highly linked to the rise and declines of non-Bermudian professional and management jobs.

Why can’t I prove it?  We don’t have good historical statistical employment data.  In 2008, all of the job categories were changed.  There is no grand compilation of long term historical trends available.  The data for my #WhereDidTheJobsGo series has painstakingly been compiled through consolidating data across multiple years but it is very difficult to go back further than 2008 so the only thing I can show are the declines, and not the increases (especially pre-full employment).

Until I can clearly demonstrate such a correlation, I cannot deem it as fact, only as a hypothesis.  How can Mr. Fahy claim it is a fact?  Has he crunched the numbers?  Has he seen reports that clearly demonstrate the correlation?  If so, can he make them available?  If not, I challenge him to either put the stats together or help me get the employment stats in standardized groupings for the last 30 years that I’d need to be able to conclusively prove whether or not work-permit numbers lead to Bermudian jobs and more importantly, what types?  Until then it can’t be said to be a fact that work permit rises lead to Bermudian jobs, only an assumption.

 

How are you actually supposed to be informed if it is so hard to find things?

Here’s a quick one.  On facebook I saw Premier Dunkley respond to someone’s comment suggesting there is information available regarding public sector reform in the budget brief for the Cabinet Office.  Fair enough, so I figured I’d go read it.

Here’s one of the all too common problems.  I can’t find any sort of budget brief for the Cabinet Office for 2017/2018 on the gov.bm website.  I’ve googled and I can’t find it anywhere.  I have no doubt it exists, the problem is: where.

This is one thing that is very frustrating about government today.  The new gov.bm website is frankly terrible for finding much of anything. There used to be a wealth of information on it under the PLP which was all removed.  Now it’s a fancy new design but the content is poor and it is infrequently updated.

This is one of the things that can haunt the OBA.  They certainly could be actively trying to solve certain issues but they don’t do a very good job of communicating it.

Are politicians little more than toothless figureheads? If so, whats the point in voting?

The Commission of Inquiry has proven to be a big disappointment.  $1 million spent investigating, $2.5 billion in debt and the OBA have indicated they have no intentions of holding anyone accountable.  What then was the point?  We clearly have serious accountability issues but no one seems to have the will to actually do anything about it. If, ultimately, civil servants are given free reign to do whatever they like without consequence then why do we bother with the charade of electing Members of Parliament (MPs) that serve as nothing more than toothless figureheads?

The one thing that is abundantly clear is that government processes are broken and there is little to no accountability.  As independent MP Shawn Crockwell pointed out, what was the point of spending $1 million to rehash most of the information we already knew to ultimately not do anything about it?  The best we can do is send people for training?  What a gross disappointment.

Former MP and government minister Renee Webb wrote the following rather damning comment on facebook

The Civil Service, particularly the heads, have always been above reproach. When I complained of what I found as a Government Minister at the tourism department regarding staff not following Financial Instructions etc., the tourism department revolted. Staff went to the press and their union.. The then Premier, Alex Scott, asked a civil servant to “investigate my management style”. This was all publicly played out. One Director told me ” you cannot have me fired, Ministers come and go, I will be here long after you”. Many reports have been done on the behaviour of the CS. Premier Jennefer Smith sent some to the Civil Service College in the UK to be “trained”. This was a consequence of a report on the Bermuda Civil Service that the PLP Government, under her, commissioned. This new investigation by the Commission of Inquiry regarding the CS is nothing new, there have been several. The outcome is always the same “training”. Ignoring Financial Instructions has always been rampant in the Civil Service. For people who make up to $200,000.00 to be “trained” for misusing public funds, and not doing their job effectively, is a nonsense. Until people are fired for such transgressions nothing is going to change. Like my Director told me ” Governments come and go”. This Government, unfortunately, is doing the same as the previous ones have done, (UBP, PLP, and OBA): Paying for expensive reports that criticize the Civil Service, and not taking effective action to hold people accountable.

Many people are growing very tired of this and tired of being held hostage.  The civil service has not felt the pain that the private sector has.  We can’t reduce the burden of the civil service so instead we have to raise taxes.  Costs are spiraling out of control and yet every time something doesn’t go their way the first recourse is to disrupt the island.  That’s the thanks we get for taking on most of the pain.  Heaven forbid anyone is held accountable to understand that this is our money and our future that is being squandered.

This isn’t an OBA problem or a PLP problem, it’s a government problem.  There are many great, well meaning and hard working civil servants out there.  That should be made absolutely clear.  However, there are some not so great ones.  A lack of accountability destroys the efforts of those working hard to make a difference.  That is an injustice to those who work hard and want to make a positive difference and do the right things.  They should be the ones running departments, not those who freely want to throw our money down the toilet.

The people expected the OBA to hold accountable those responsible for running up our massive debts and allowing our future to be put in jeopardy.  They’re absolutely failing at it.  It’d be a joke if it wasn’t so sad because it is our future that is being squandered. If the civil servants run the government and there’s not going to be any accountability then why not just get rid of the MPs all together.  Why waste even more money?

Is there anyone we can vote for that will actually do something about this?

Where are the PLP’s tourism ideas?

In his latest opinion piece, PLP shadow minister for tourism Jamahl Simmons laments the lack of progress and the lack of job creation by the OBA in Bermuda tourism.  He spends 4/5s of it highlighting whose numbers were bigger and then proclaims “Yet this isn’t about whose numbers were bigger.”  He suggests the bigger aim is a new approach that results in jobs for Bermudians, but what is that approach?

Mr. Simmons encourages us to see what the PLP has planned for tourism

We encourage you to examine our vision, an economic vision for a Bermuda that at its core is about jobs, opportunity, inclusion and building a Bermuda that works for Bermudians. Weigh it against the performance of the OBA and join us in making Bermuda work for you.

Fair enough, I thought I’d take a look as I’m keen to know what his vision is.  So I went to the vision2025.plp.bm site and clicked on tourism.  I was very surprised because it was short enough I can just copy the entire piece here:

Vision 2025 requires us to commit to developing a vibrant tourism industry for our country, and it requires the necessary investment to support that effort. Tourism is a global industry and we must compete globally. That means that we must invest in our product, invest in our marketing, invest in our people, and understand the basis of tourism.Tourism Is About experiences, tourism is about escape, tourism is about letting go, and most of all, tourism is about fun. In order to compete in tourism we need to remember that if people don’t get it in Bermuda, they will go somewhere else to get it. The next PLP government will make changes to our laws to keep Bermuda competitive with other tourism destinations. If we as a people put the passion and investment into rebuilding our tourism industry we can succeed. Our future success must be based on the realisation that our beaches alone are not enough to attract visitors to our shores; we must offer a compelling product and that requires investment from both the public and private sector.

To be honest, it is disappointing because I expected more given how much effort Mr. Simmons has dedicated to pointing out the OBA’s failed numbers.  The bulk of the above can be whittled down to (and I’m of course paraphrasing) “we’ll invest more and change some laws”.  That’s about as concrete as it gets. So I figured I’d take a look at the budget reply and am rather surprised that the statement there is even shorter and says the same thing.  Increasing spending isn’t the compelling plan I’m looking for. Where is the actual concrete vision and plan?  What would the PLP do differently that amounts to real actionable goals rather than simply platitudes?

 

 

People resigning from a party should fully resign from parliament at the same time

First Shawn Crockwell, now Mark Pettingill.  I said it before when Terry Lister resigned

when a member of parliament is elected under one banner and decides to join a different party or go independent they should resign and re-contest their seat.

Under our present broken political system some people may have voted for the individual, others voted for the party.  As an elected representative you owe it to your constituents to honor the commitment you made being elected under one party banner or another.  If you cannot honor that commitment you should immediately resign and re-contest the seat under whatever new commitment you wish to make.

A rethink on duty tariffs?

So what is happening with Duty Tariffs?  I was pretty concerned that it looks more like a hike than a “harmonization” and was disappointed at what remains to be considered “essential” which really should see hikes.

Now the word is that the change is being put on hold though details are limited on why and how.

 

If someone is volunteering to pay taxes, why make it difficult? #DiscouragingEntrepreneurship

I simply don’t get it.  If someone wants to voluntarily come in to register to pay taxes for some side work, why would you want to discourage them by making the process difficult?  It is just one example of where government bureaucracy adds a great deal of friction with unnecessary and cumbersome processes.

Here’s an example.  I’ve been asked to consider doing some side work outside of the work I do for my primary business (for which I’m already registered and pay taxes).  It’s a variety of odd work like some google analytics analysis, basic software and website consulting and kiteboarding instructing that will add up to maybe a few hours a month.  Being a responsible citizen I went into the office of the tax commissioner to register so I can pay some taxes if I start collecting income for these odd jobs.

So, to register as an individual who is offering services I need to provide

  • a copy of my passport or drivers license
  • a recent utility bill to verify address
  • a business plan

I understand the passport or license requirement, but the others?  Why are these necessary?

The address verification is a pointless exercise which I simply don’t understand from many fronts.  The banks love it, health insurance loves it, government too apparently.  It is so incredibly easy to fake any sort of utility bill using basic image editing software why is this even considered valid?  It is bureaucracy for the sake of bureaucracy.

Why is a business plan necessary?  For a few hours side work it would be easy to simply not even declare the income and the tax office probably wouldn’t know any different.  Yet, when someone voluntarily comes in and says please provide a registration number so they can do their duty and voluntarily pay their taxes, the government wants to throw up requirements and make things difficult

Really.  A business plan?  I asked why this is necessary and was told that I would need to supply either that or a copy of a contract for any work I’ll be providing.  It is like being treated as guilty for evading taxes before you’ve even earned any despite voluntarily looking to pay what is due.  Why?  Wouldn’t you want to encourage honesty rather than dishonesty by making it as easy and painless as possible to be honest?

Both the OBA and the PLP talk about wanting to encourage job creation and entrepreneurship. The problem is we seem to want to talk about it, but when it comes down to it, we’re not doing much to make it any less difficult and painful to actually do it.

Bermudian job growth actually did occur when accounting for attrition in government jobs

Recently there has been discussion that the non-Bermudian category was the only status category to see job growth in the last two years. There had been no official releases by the stats department suggesting this however it turns out it was discussed in parliament and reported in the newspaper.  On an absolute basis it turns out to be true, but quoting simply the absolute numbers doesn’t tell the whole story.  Government is finally seeing significant and much needed reductions in job numbers through voluntary attrition (retirements).  If you exclude declines in public administration jobs then there actually was Bermudian job growth alongside non-Bermudian job growth.

The PLP and the BPSU were absolutely correct that the non-Bermudian job category saw significant growth of 158 jobs when considering the period up to August 2016 while Bermudian jobs declined.  The thing is, when digging through the numbers there seems to be a lot more to the story to be discovered than simply “non-Bermudians got all the jobs”.  Government jobs accounted for heavy declines which significantly impacted the Bermudian numbers but government workers weren’t fired or laid off.

What led to this realization?  I didn’t get how how the PLP and the BPSU were claiming that only non-Bermudian jobs saw an increase in the last 2 years while the latest data from the stats department only showed 5 new non-Bermudian jobs added in 2015.  I assumed I must be missing something and I was.  A reader was kind enough to point out that some mid-term employment data was provided via an article back in February but wasn’t released as official stats updates.

Both Bermudian and non-Bermudian jobs saw growth in 2016 when factoring out government job declines.  Approximately 71 Bermudian jobs were added alongside 176 non-Bermudian jobs

Note: non-Bermudian excludes spouse of Bermudians and PRCs

Let’s take a step back and look at the numbers.  We’ll start by looking at one of my previous charts of government jobs vs. all other jobs updated with these Aug 2016 numbers.

Note: government jobs are on the left axis, all other jobs on the right.  I accidentally chopped off the labels.

That is a significant drop in public sector jobs.  169 less jobs in August of 2016 vs. 2015 to be exact.  The chart above shows the stark reality of 2008-2013 where government has been incredibly slow in reducing jobs while all other sectors (except social work and healthcare) have been hit with declines.

Since there were no mass firings or layoffs in government, the only explanation for these declines is voluntary attrition where people retired or resigned.  This is one of the things the OBA has taken the slow and steady approach to and while it has been excruciatingly slow it does seemingly seem to be bearing some fruit.

The problem is that numbers weren’t provided breaking down the impact of government attrition by status so we can get a better idea of the non-government job picture.  So, let’s attempt to approximate how many jobs were reduced by way of attrition.  We’ll do some fancy approximating of the 169 public sector jobs to figure out how many likely declined by status in Aug 2016.  We’ll take the average values of public administration jobs from 2008-2015 for each status category, determine the percentage breakdown of each and then apply that to the 169 to approximate the changes by status in 2016.

Here’s what it looks like.

Roughly speaking the breakdown of government workforce by status using an average across the data is 86% Bermudian, 10.5% non-Bermudian, 2.5% spouse of Bermudian and 0.5% PRC.  So that 169 reduction could roughly be approximated to 145 Bermudians, 18 non-Bermudians,  4 Spouses and 1 PRC.  The actual numbers could vary somewhat from this but unfortunately they weren’t available so this is what we’ll work with.

So, if we do some further approximation and remove public administration from the overall jobs numbers broken down by status we can get a better idea of how jobs have changed over time.

Non-Bermudian jobs show a noticeable trend upwards however we can also notice that there is an ever so slight improvement in Bermudian jobs as well.

The raw approximations tell us that roughly 71 Bermudian jobs and 176 non-Bermudian jobs were added when excluding government job declines. One could sensationalize this with a fancy chart and misleading headline but ultimately the real story is that when you look at the numbers in detail, we actually are seeing an improvement in job growth for both expats as well as Bermudians when looking at data available up to August 2016.

Only 5 non-Bermudian jobs were added in 2015. FIVE

The latest stats I’m aware of from the 2016 Job Market Report shows that the “Other non-Bermudians” category added a total of 5 jobs.  The PLP and BPSU are making this out like it’s some sort of huge number.  Like Bermudians are falling behind while non-Bermudian jobs are in abundance.  Is there more up to date statistics available or simply sensationalizing things for political gain?

In the PLP’s recent reply to the budget statement they lament “At the same time, just like last year, the number of guest workers employed in Bermuda has increased.”

During the BPSU panel on the job market BPSU President Jason Hayward laments that Bermudians are losing their jobs while non-Bermudians are seeing job growth.

Where are they getting their statistics?  Are there 2016 numbers available or are they actually making a huge issue that there were literally a small enough number of non-Bermudian jobs added that you could count it on one hand.