DO YOU REMEMBER WHEN?

Do you remember when Bermuda’s standard work-week was a five and a half day week?  Monday, Tuesday, Wednesday, half-day Thursday, Friday, and Saturday. Do you remember when ‘annual vacations’ and ‘public holidays’ meant time off without pay? Or a time when employees did not have health insurance?  If you do, you know what changed, and you’ll know when change began.

            Change Day was February 2^nd 1965. Then, in what later came to be called ‘the BELCO riots’, the fledgling BIU confronted an intransigent management backed by a governing establishment that had just begrudgingly begun dismantling Bermuda’s high walls of racial segregation. Until 2^nd February 1965, change was excruciatingly slow.  From 3^rd February 1965, the pace of change accelerated. Not just in workplace relationships, but in every relationship throughout Bermuda’s entire racial, social, political, and economic spectrum.

            In 1965, the fledgling BIU, standing almost alone, began a long and bitter series of battles. First for recognition, then for better working conditions and benefits. Though thousands of other workers – and almost all employers – disparaged the BIU, every Bermudian benefited from those early battles fought, and won, by the BIU. 

            It’s now 2005. Forty years on. Is the BIU – for that matter, all of Bermuda’s major unions – still as relevant and as important now – as then? Have unions, generally, outlived much of their early usefulness?

            I believe they have.  Pensions, health benefits, safety-at-work issues, quality of life-at-work issues, sexual harassment issues, regulated maximum working hours and payment for over-time, job security, standard agreements between employees and employers, vacation and holiday pay benefits, severance pay, ‘sick’ time, compassionate leave, maternity leave, smoking or non-smoking, and more besides…  What isn’t covered by legislation has become enshrined by ‘custom’ or protected by competition.

            All western unions have fought their way out of those dark ages when workers could be beaten, starved-out, and locked-out with impunity. Now, in the developed west, workers have encased their rights in national laws. It has happened in the USA, UK, Canada, Germany…  and in Bermuda.

            Normal pay for a Delta Airlines pilot was over $100,000 a year. These pilots recently concluded a ‘pay cut’ agreement with Delta airline bosses. Delta’s pilots did this in order to help ensure that their ‘jobs’ with Delta Airline would continue. The alternative? Delta’s pilots could keep their high pay. Delta Airlines would then go bankrupt. Delta’s pilots would then be jobless and payless. So?  The pilots union agreed to take cuts in pay and benefits.

            In the developed west, it seems that Unions are doing more and more bargaining aimed at keeping a business viable and thus protecting continuity of employment. That’s change. Will the same happen here in Bermuda? It will. It must.

            On the global scale, Bermudians are top-o-the-heap when it comes to national per capita incomes. This means that Bermuda employers are top-o-the-heap when it comes to wage and salary expenses. This means that the employer/employee combination that makes up the thing called a ‘business’ has top-o-the-heap costs. Bermuda’s top-o-the-heap businesses are now – in 2005 and into the future – in direct competition with other similar businesses elsewhere in the world. Businesses that have much lower costs.

            Given the spread of modern technology and the generic commonality of consumer demands, Toyota and General Motors and Renault all make a similar consumer product. In 2005, physical geography still sets workers apart. However the invisible and inexorable realities of global economics, now driven by the interposition of the twenty-year old Internet, forces workers back together again. That’s where wage competition has really gone.

            The US car-worker union that wins higher pay for its American worker, simply succeeds in making American-made American cars even more expensive than Japanese-made Japanese cars.           In 2005, the reality is that even though he is face-to-face with his US employer, the US worker bargaining for a $25 an hour package is really bargaining against a worker in a foreign country who is bargaining for a $15 an hour  package.

            If the US worker ‘wins’ a $25 package, US car sales – and thus US car worker jobs – will fall because an American Dodge Saturn can be replaced by a  Japanese Toyota Camry or French Renault Megane.  Looming in the near future, like the Japanese cars that came in the 1970’s, will be new and inexpensive Chinese cars coming out of a very low wage Chinese economy.

            Bermudian workers are now in direct competition with every worker everywhere else in the world. Don’t believe me? Look at the faces around you. Listen to the multitude of accents in our teeny-tiny 35,000 worker environment. Bermudian workers are competing against workers in Ireland and Singapore and Barbados and India and the Philippines and ….

            On 2^nd February 2005, are Bermuda’s unions still as important as they were forty years ago, on 2^nd February 1965? Is their mission still the same?

            Like Delta’s pilots, Bermudian workers and Bermuda unions are enmeshed in a new world. In our Bermuda, on 2^nd February 2005, the same quality of accelerated change that began forty years ago on 2^nd February 1965 is already underway. Changes that have already come are causing the end of some old style wage and benefit bargaining. These changes are driven by the realities of our global economy.

            This reality didn’t exist forty years ago on 2^nd February 1965.

 

QUO FATA FERUNT

After 163 years, Trimingham’s disappears. Was it foreseeable? It was. However, I don’t have a multiplicity of letters after my name, and I’m from Pond Hill; so ‘big chiefs’ and ‘captains of industry’ may not pay attention to what I have to say.

            That’s fair. They don’t have to. However, Trimingham’s – and HAE Smith’s – will still close.

            Prior to the 1950’s Bermuda was a small isolated economic unit. Trimingham’s – and HAE Smith’s – were big stores. Big, that is, relative to Bermuda’s market and economy.

            From the 1950’s through the 1980’s, Trimingham’s prospered. Tourists came and shopped by the half-million.  Change came. Tourist numbers declined. A now wealthier Bermudian consumer traveled more and began serious shopping overseas. Then the internet with its portals open to the whole world. By the late 1990’s, retail in Bermuda had changed forever.

            Trimingham’s long and special relationship with the Bank of Bermuda, coupled with Bermuda’s old exclusive style of doing business, meant that some old-established closely-held businesses became overly dependent on bank loans and overdrafts, and may not have regularly re-invested significant proportions of their profit. This wasn’t the best business strategy or wisest funding arrangement.

            It depended on the ability and willingness of the bank to advance funds and carry debt as performing debt. As long as the Bank of Bermuda remained a truly local bank, the Bank would follow local norms and go on funding Trimingham’s.

            The Bank didn’t stay local. The Bank became global. The Bank applied new global standards.

            One look at the relationship between Trimingham’s and the Bank; a second look at the viability of Trimingham’s as an ongoing retail operation; a few moments thought; one or two sums on the back of an envelope; and the answer was clear.

            The Bank should recognize that Trimingham’s would never be able to repay its loans and settle its overdraft. In global banking, there is no sentiment. There is calculation. Just calculation.

            The Bank demanded settlement. Trimingham’s couldn’t settle. The Bank closed in. Trimingham’s would have to go out of business and settle its debts. The rules had changed.

            One hundred sixty-three years of warm handholding in balmy Bermuda breezes passed.  A fresh wind bringing a new reality blew across Bermuda’s still leveling playing field.  The flag of a Bermudian flagship business was stripped from its flagpole. With that went the last of ‘Front Streets’ shrunken power.      

            In a conch shell, that is what happened.

            There are other key issues. One is that Bermuda’s Customs Duty tax system was designed as a source of revenue when tourism was growing and providing 500,000 tourists as consumers. The system was incredibly simple. Half a million tourists buying sweaters and china and meals and booze would pay the bulk of Bermuda’s Customs Duty tariff. Bermudians, at 45,000, wouldn’t.  Bermuda’s tax system had the tourist subsidizing himself as well as paying for us. It was – WAS! – an almost perfect tax system.

            Tourism declined. Global buying patterns shifted. Today, Customs duty hits local retailers hardest.  In some lines, it makes it impossible for them to compete with offshore sellers who sell through the internet. Additionally, Bermudians, now counting an overseas ‘trip’ as a birthright, no longer factor in the cost of travel when they swoop on North American malls and buy three of this and five of that…

            Lastly, the City Fathers, made up of fading old-style businessmen, their thumbs still stuck up their bums, have still not made Hamilton a traffic-free people-attracting shopping area where people just go to hang and chill – and spend more dollars. Every other country has discovered this. Every old town once clogged with traffic saw a marked increase in overall revenue when they created traffic-free shopping areas.

            Trimingham’s departure marks the end of Bermuda’s old style of doing business. Perhaps, now, businesses will raise capital by share offers. Perhaps Bermuda’s methods of imposing and collecting taxes will be rigourously re-examined. Perhaps we will all accept that in 2005 Bermuda is simply a pimple economy in a massive global game. Perhaps we’ll start to think nationally and objectively about how we really fit in the global game.

            The City Fathers need to unstick their thumbs and ‘just do it’.  We need to start revamping our tax system.  Businesses still struggling with bank loans need to broaden their ownership.

            As with Fabian’s winds, we are seeing strong winds causing more change. We Bermudians need to reach back into our long mutual heritage and sail, tacking and gybing together, in this new and stronger global wind.

THE “P” AND “D” FACTOR

Just what benefit will Southlands and newer developments bring? To whom will those benefits flow?

            If the triple approach of new properties, expanded airlift, and increases in real visitors (i.e. not business people, not friends visiting friends, not relatives coming out for a holiday with family) does work, then the new Jumeirah Group property at Southlands will make a profit on the millions that they invest. But there’s no guarantee of profit.

            However, there are other guarantees. One is that Jumeirah will employ a majority of non-Bermudians. They’ll be unprofitable if they don’t. Driven by the profit mandate, they’ll do what’s necessary. They’ll employ labour at the same wage rates as the rest of Bermuda’s Hospitality Industry.

            In the 1980’s, with Bermudians leaving the Industry, Bermuda’s Hospitality Industry began adjusting. It began by hiring in the wider global labour pool.  The Industry stopped hiring West Europeans. It replaced them with cheaper labour from the Indian sub-continent, Asia, and Eastern Europe. The wage rates for this labour were set in the late 1980’s and early 1990’s. The rates have advanced only because of global inflation and not because of competitive Bermuda factors.

            Today, Bermuda’s Hospitality Industry has the lowest median income. In 2006, at about $36k, it was only 70% of Bermuda’s $51k national median, and income improvement always trails that in all other sectors.

            Bermuda’s Hospitality Industry now squeezes out its profits by employing the cheapest and most efficient labour that it can find. That labour is not Bermudian. No mass-market hotel in Bermuda can afford to have a majority Bermudian staff working for the kind of wages that Bermudians require if they are to have an acceptable Bermudian lifestyle – given the weeks and hours of work actually put in.

            Only Bermuda’s smaller niche units can afford to employ Bermudians. They can do that because their niche customer base allows them to charge more. Their Bermudian labour force provides a higher level of service and a higher quality ambiance – which then allows these employees to earn slightly more as well as stay in work all year round.

            Jumeirah will employ non-Bermudians in its kitchens, dining rooms, salons, spas, and in its technical support operations. Jumeirah’s top management – the people who look after the owner’s millions – will be non-Bermudian.

            Bermudians will appear as token waiters, token bartenders, token kitchen staff, token middle-management, token everything. At Southlands, wherever a Bermudian works, he or she will be in a minority – like a wine cork floating in a swimming pool.

            That’s the reality. It’s created by the fact that Bermuda has an oversize and still growing economy. There are only about 48,000 of us Bermudians. But us lot are living on an economic platform – we call it Bermuda – that services a 65,000 person 40,000 worker economy that – every day – still finds itself short of labour. Us 48,000 can only provide about 28,000 people who can and will toil. Us lot actually have a world-beating percentage of our indigenous population in gainful employment. Still, economic platform Bermuda – our home – finds itself short of labour.

            The Southlands/Jumeirah addition adds one more economic demand to an already supply starved worker pool.

            Top those realities with the scary reality that us lot – collectively, nationally – have been producing a too large number of under-educated young Bermudians who need to find a place in our over-large, highly-competitive, high-demand economy.        

            Bermuda’s over-large economy has a voracious demand for educated, capable, trained, workers who’ll provide the required range and quality of services and skills. Yet us lot have been throwing our own under-educated young people – the majority male –onto an educational dung heap. We’ve been building a highly combustible piled-up heap of discontented, disenchanted, testosterone-filled young males. Daily, incrementally, this piled-up and already dis-contented group gets pressured a little more by the steadily enlarging crowd of ambitious job-holders coming in from overseas.

            We sometimes see and hear about small but regular outbreaks of violence and xenophobia. These are little bells of warning. They’re telling us that we need to act faster and take stronger action to fix our real problem.

            Bermuda’s real problem? For Bermudians, Bermuda promises high incomes and high hopes. For Bermudians, Bermuda delivers high costs leading to dashed hopes (housing). Bermuda provides a plethora of jobs and opportunities – with still more jobs and opportunities coming, but these are jobs that are beyond the reach of too many poorly and badly educated Bermudians.

            For Bermudians – Bermuda’s real problem is the growing gap between promise and delivery.

TWO BERMUDA’S

It has often been said – and written – by many people, that there are two Bermudas. In the past, I’ve referred to a Bermuda that’s been divided, and divided very clearly, along racial lines. Bermuda is re-dividing now. This time on new economic lines.

            The top group are the people who operate in International Business and its direct supporters – accounting, legal, banking services. You can see their pay levels as offered in all those big ads that fill the help wanted sections of the local papers. You can also see it in the housing that’s lived in by these highflyers.

            Middle group? Bermudian owners of the $6,000 a month rental units; Bermudian owners of successful service businesses; Bermudian entrepreneurs who are thrusting forward with their new businesses that feed off the high-payers in IB, Government workers generally, and people who land good government and private sector contracts. 

            Taken together, the top and middle groups operate in the top part of Bermuda’s overall economy. Together, they form the top section of Bermuda’s economy. They’re the ones who clearly earn enough to live on and play with in Bermuda’s economy. This section lives and thrives in an economy where Western or developed country wages and salaries are being paid.  Here salaries compare well with US or Canadian or UK salaries and allow a good Bermuda-style lifestyle.

            Underneath this composite top section is another section. This section operates in a lower layer. This section is filled by workers who come to Bermuda out of low income countries. Low income meaning that the Bermuda dollar that they earn and save in Bermuda and then send to their home countries is worth five, ten, sometimes fifteen times what a Bermuda dollar is worth in Bermuda.

            A trained and experienced Filipino nurse working in the Philippines can expect to earn – be paid – less than $4,000 US per YEAR. A Filipino nurse working in Bermuda [or in the USA or Canada or Ireland] can expect to send home anything from $1,000 to $1,500 a MONTH [$12,000 to $18,000 a year]. A skilled Goan working in Goa can expect to earn about $200 a month {$46 a week}. A Goan working as a landscaper or chef in Bermuda can expect to send home $100 to $200 a WEEK.

            This lower section, Goans, Filipinos, East Europeans, are working in an economy where wage rates are compared to wage rates in their lower income countries. Here the most critical issue is how much can be saved and repatriated to that lower income country. Here the hourly or annual rate of pay is much less important. Almost ir-relevant. Here the critical factor is the ability to work – even at straight time overtime – so that at least $150 to $350 – or even more – can be sent home every week.

            Workers in this section of the economy will happily share accommodations, share bikes, not splurge on flat panel TVs, not rush to get a new outfit for May 24^th or Cup Match, and not take annual shopping trips to ‘Philly’. These workers spend very little in Bermuda’s retail sector.

            Even with a construction boom and a record number of ‘guest workers’ on the island, retail is not booming; but housing is crowded by lower paid guest workers who – by sharing accommodation – can actually pay higher than market rate rents; yet, as individuals, still pay far less than a Bermudian single-renter has to pay.

            And he – or she – still sends that $150 a week – $650 a month – home into an economy where those $150 ($650) Bermuda dollars have the same purchasing power – in that country – as $1,500 ($6,500) would have in Bermuda.

            Two Bermuda’s? Yes. Bermuda used to split along racial lines. Now Bermuda is re-dividing on economic lines.

            One group getting a Western rate. The other group getting non-Western rates. Bermudians are getting stranded in the bleak no-mans-land that’s opening up between these two growing Bermudas.

            Under existing and future economic conditions, all new hotel development will only – and can only – favour the group who will accept non-Western pay rates. Bermudians cannot afford to work for non-Western rates unless they accept un-Bermudian lifestyles and living conditions.

            There is a steadily growing pressure – a squeeze really – on the human beings who are defined as Bermudians. As humans beings will, Bermudians will react to that squeeze. Watch out when they do!

THE PEOPLE UNDER THE STAIRS

Economies are not simple things. They’re even more complex than the still not fully understood human body. In fact, unlike the human body, which seems not to change too radically. After centuries, humans still have two eyes, two legs, and one mouth. In the same time, economies have undergone radical and undeniable change.

            Two hundred years ago, Bermudians – with two eyes, two legs, and one mouth – were raiding other people’s ships and stealing their stuff. Well, it wasn’t called stealing. Then it was called privateering.  That’s alright because in those days people were said to be so polite. At any rate, that’s what historians have told us. But that’s the sort of activity that kept Bermuda’s economy going – back then.

            Nowadays we’re more technical. We sell stuff called Insurance and ‘services’ and ‘tourism’. I don’t know what those old-timers would make of all this. They probably wouldn’t understand it and might think us strange. But I find it strange how we’re working so hard to grow our economy the way that we seem to be growing it. Well, to be correct, it’s more like the economy is growing the way most free economies grow.      Individuals see opportunity. Individuals pool their resources. These individual efforts – clumping together as industries – then create a fresh new set of opportunities – and presto! A changed economy. That’s the way free economies work.

            However free economies operate within human societies. Human societies are impacted and affected by their interaction with other human societies. The combination of economy and society creates a social economy. In some social economies, jobs are gained. In others, jobs are lost. No loss, no gain?  Then jobs shift around. But nothing stands still.

            Bermuda and its social economy – the combination of the human society that lives in Bermuda and the economic machine that works on Bermuda – is beset by a jobs shift problem.

            Bermuda’s Tourism Industry restarted with a ‘big bang’ in 1946. In those old days of segregation and discrimination, for Bermuda’s majority population, Tourism was the only way out and up. So they bit their tongues, smiled, carried trays, tended bar, made beds, drove taxis. In the mid-1980’s – a whole generation later – there was a clear generational Bermudian step-away from Tourism. Bermudians shifted their focus and turned their backs on Tourism. They focused on something else.

            Tourism responded by dipping into the global marketplace, found excellent replacement staff, and re-worked itself as an efficient machine that used lower paid global workers who were being paid on a global – not Bermudian – scale. Tourism went back to making its necessary profits. Bermudians now make up the minority of employees in Bermuda’s Hospitality Industry.

            Running from or escaping or shunning Tourism, Bermudians went into the Civil Service and International Business. IB has special and high requirements that demand a good education and specialist skills. So not every Bermudian can aspire to join IB. The Civil Service has a relatively high entry requirement – frequently demanding an Associate’s degree as a condition of employment.

            That leaves a bunch of Bermudians who are now shut out from the Hospitality Industry by the low ‘global wage’ structure and the reality of a forty week tourism year; who can’t get into IB or the Civil Service because they lack the skills or education base; have little prospect of new or additional job opportunity in Bermuda’s shrinking Retail Sector; and, in a final and new national reality, are squeezed out of service sectors by the globalizing of remaining service sectors such as landscaping, construction, hairdressing, butchering, etc…

            That leaves a group of Bermudians who are shut out or priced out of two Industries, can’t get into another – skills and education requirements are too high; and are being shrunk out of a third – because it is shrinking, or, at least, not growing.

            This group of Bermudians – and this socio-economic reality is colour-blind – are like the ‘people under the stairs’.  They’re not in the cellar, not in the room, and not on their way up the stairs. They’re stuck, hidden away, under the stairs.

            Will the planned new hotel developments at Southlands and Parlaville help the ‘people under the stairs’? Do the existing ‘condo developments’ help the ‘people under stairs’? Is Bermuda’s changed economy steadily pushing more Bermudian ‘people under the stairs’?

            Are there really ‘people under the stairs’?

The Full Picture

“An experienced software developer in Bangalore costs about $13,000 a year, compared with $78,000 in Atlanta.” [Royal Gazette Mon 05 Feb 07… page 16…(Bloomberg)]

In advanced economies, the new workplace reality is the combination of eased national borders and global wage differentials. With the world’s highest GDP and the world’s third highest per capita income, Bermuda is an advanced economy. So Bermuda has a greater wage differential than Atlanta.  Until 1989, Bermuda’s economy hired ‘guest workers’ from non-communist Europe, North America, the Caribbean and South America. A few from Australasia. In the 1990’s, with the Berlin Wall and Iron Curtain down, ‘guest workers’ started arriving from ex-communist Europe, Asia, the Indian sub-continent, and, now, a trickle from the African continent. The shift to these new areas had two effects. One, for these new guest workers, wage levels stagnated. The Asian guest worker, replaced the western European guest worker. He was willing, and able, to do the same work for the same or even slightly less pay. Driving this new bargain was a change in relative economic values.  Western Europeans saw Bermuda pay from their advanced economy perspective. They were attracted to work in Bermuda if they were able to save $300 – $500 per week. The amount was determined by their assessment of the value of that saved income once they repatriated the funds to their native country. To them, each repatriated Bermuda dollar had a buying power of about $2 – $3 in their home economy.  The second effect? East Europeans, Asians, and Indians saw Bermuda pay from their less-developed economy perspective. They were attracted to work in Bermuda if they saw an opportunity to save as little as $100 – $200 per week. The amount was determined by their assessment of the value of that saved income once they repatriated those dollars to their native country where each of these Bermuda dollars might have a buying power $5 – $10. This high value differential combined with the ability to profit relatively more from a lower savings rate meant that both employers and employees saw a mutual benefit.

            Workplace Bermuda is most attractive to workers from countries with the greatest wage differential. Thus high quality, highly educated, highly disciplined workers from Asia, the Indian sub-continent, and now Africa, are even more strongly attracted to work in Bermuda.

            Because the attraction is money saved combined with the relative worth of that money in a foreign and lower level economy, Bermuda’s wage and salary rates are now being set and influenced by this new factor. For a Bermudian, $100 will buy three bags of groceries, or pay one weeks rent in a shared ‘studio’.  In some parts of the Indian sub-continent, that same $100 will maintain an entire four person household for four whole weeks.

            On exactly the same basic wage, someone from the Indian sub-continent will consider himself far better off than someone from Western Europe. On the Indian sub-continent, $100 goes farther than it does in Western Europe; and goes much, much farther than in Bermuda.            

            For all guest workers, Bermuda’s high cost of living is not critical to their decision. The newest and most important critical factor is savings potential and the savings level that is attractive can be as low as $100 a week. The overall wage that is paid is less important than the amount that can be sent home, or that can be used to fund emigration to another country.  Between 1995 and now, Bermuda’s economy moved to using this much cheaper labour pool. In many lines of work in Bermuda, wages have stayed low, and will remain low. Bermuda’s wage rates are now set and are being heavily impacted by the result of this globalization.

    Driving hard for low and lowered costs, Bermuda’s Hospitality Industry now makes its profitability calculations on personnel costs that use this new wage factor. Without artificial government intervention, wage rates in that Industry will not and cannot rise to rates high enough to attract or sustain Bermudian workers AND maintain prices that customers will pay AND promise a profit to owners. If government intervenes, it will be intervening in a matter where the absolute laws of economics and the realities of the marketplace apply. Combining thoughtful, careful, and certainly minimal government intervention with far better educational and vocational preparation is likely to be the only successful – and possible – way forward.

BERMUDIANISATION

Bermudianisation is dead. But we’re having one heck of a problem with the funeral.

            The casket is now at the altar. The High Priests, garbed in PLP green and UBP blue, raise their arms and ask for the first hymn. The congregation begins singing.

            Hark! What do I hear? Harmony ? No! Cacophony!

            A goodly portion of the congregation is singing that mournful traditional hymn that begins “There is a green hill far away…”. Another group are crooning the opening bars of “People get ready, there’s a train a’coming…”. Then there’s a bunch of souls looking so totally puzzled and so embarrassed that I think that they will crawl under the pews and sneak out of church.

            Bermuda has changed. Under our feet and before our noses, Bermuda has changed. Bermudians were once the centre of the Bermudian Universe. From the 1950’s, to the 1980’s, in their millions, people came to Bermuda to see, consort with, be entertained by, and be served by us nice happy Bermudians. For all of that time and centred in our universe, us nice Bermudians created, and profited from, our happy island idyll.

            That changed. The arrival, and then the growth of International Business (IB) changed the entire social and economic dynamics of our idyllic little island. But us lot, blinded by our habit of not looking deeply at ourselves, did not see that change. Nor did we recognize and therefore accept the full impact of that change.

            But what, exactly, did change?  Our ‘place in the sun’ changed. IB did not come to Bermuda because us lot were a smiling happy people who danced well, made magnificent ‘dark-n-stormies’, or wonderful ‘swizzles’.  IB did not come because of our beaches and golf courses. IB came because of our Tax Laws, our legal system, and our excellent placement betwixt the Capital markets of Europe and North America. IB stays because IB’s needs are met.

            Why does IB come to Bermuda? According to Ironshore CEO Robert Deutsch: “…not having to worry about…income tax; Bermuda’s…regulatory environment, attractive climate…, wealth of talented individuals living here who can fill vacancies within IB.”         

            So Bermudians do not factor in IB’s hierarchy of needs.

            However, with IB operating in Bermuda, it is essential that Bermudians derive sufficient benefit from the substantive presence of IB. For four postwar decades, that’s what Bermudians did with Tourism. Because all Bermudians profited from serving and servicing Tourism, all Bermudians – except a few eternal grousers – supported Tourism.

            But Tourism needed Bermudians. IB does not need Bermudians.

            IB needs to have its needs met. IB requires people – “talented individuals” – who can calculate the risks involved in providing insurance cover; who can make sound and profitable judgments when given $25,000,000 or $250,000,000 to manage; who will see a new commercial opportunity and who will then exploit that opportunity in order to return a better profit – or much, much better – develop a brand new profit opportunity.

            To do all of that, IB hires the best and the brightest. IB selects “talented individuals” from around the world. IB has to have the best and the brightest because IB operates in a cold and cruelly efficient global marketplace where there are no band-aids for failure.

            IB hires people who are bright, well-educated, and intellectually aggressive and ambitious enough to leave their comfortable home environments, fly as many as 12,000 miles, come to a foreign culture in a foreign land, and THEN perform at a level that is at least as good as, often better than, the counterparts that they left at home.

            Without exception, these persons had to compete strenuously to get into a good university. The idea that any Bermudian with any college degree can, at any time, replace any foreigner who also has a ‘college degree’ is a false idea. It takes no account of the stark reality of the marketplace where failure is punished and punished harshly and swiftly. Given $25,000,000 to manage, after twelve months, you’d better have that and more. If not, your job will instantly go the way of the millions you’ve just lost.

            Bermudians who just manage to scrape into ‘open admissions’ colleges in the USA are at a distinct disadvantage to a person who had to compete – and win! – to get into Howard,  or Harvard, or Hofstra…  Or, win against even fiercer competition to get into the UK or Indian universities.

            The idea that we can ‘Bermudianise’ IB is a false idea. It needs to be autopsied, shrouded, put in a nice casket, and placed before the altar of the High Political Priests. Then the whole congregations needs to sing – in unison – “People get ready, there’s a train a’coming…”.

            The train is the train of change. Change that has already happened!