Friday, December 13, 2019
EDITOR, The Tribune.
An increased Minimum Wage – Can we afford it? A silly question.
The financial and economic gurus here in The Bahamas commenting on the minimum wage have been educated by, and within, a system that has failed. Shown clearly to have failed. It is not without irony that while we are having this discussion, millions upon millions of people in dozens of countries around the world are in the streets protesting the lack of being able to “make it” on their wages. And, here in The Bahamas, we see and hear the rumblings, as well.
There is nothing about the neoliberal agenda, under which most of the world now operates, which has shown anything resembling fairness, sustainability, justice or common decency for the average person. It should surprise nobody. These policies were designed by the major money handlers, the IMF, the World Bank, Wall Street, the World Trade Organisation, the “financial geniuses”, the rich.
What has been shown clearly, year after year for decades now, is that the world’s resources are being concentrated into fewer and fewer hands. Any thinking person, who looks at the gross income and wealth disparity which exists in the world today, and thinks this is OK, is an intellectual and moral failure, a sellout.
What decent person can defend a system such as this?
The very idea and main thesis of “economy” is predicated on the idea of fairly allocating the earth’s scarce resources. Don’t we realise that the whole idea, the whole construct of our economic system, is merely a human creation? Entirely made up by us. Or, should I say, made up by those with the power and money to do so.
The arguments against a liveable minimum wage come directly from this same made up nonsense that those who appear to be knowledgeable, with their money and diplomas, are continually pushing on us. Can we not see clearly that their precepts are simply not working for most of us?
Understanding Classical and Keynesian economics, as opposed to this failed neoliberal model we now operate under, would do wonders to open some eyes. It would also illustrate that every time taxes are raised, and as the cost of living increases, there is less money available to spend into the economy.
When more money enters the economy, via increased wages, so too does the buying power of these workers whose wages were increased. Henry Ford understood that to sell more cars he needed to raise the wages of his own workers. Yet somehow today, “leaders” are cautioning that businesses and our government may not be able to “afford” a higher minimum “living” wage. Is this because they are ignorant of how an economy works? In most cases, yes.
As wages increase, more money circulates into the economy based on the “multiplier effect” alone. Give a rich person a dollar and they put it in the bank. Give a poor person a dollar and they spend it immediately, into circulation in the local economy. This is well known and understood in economics. More money available, more demand for businesses goods and services. More demand for goods and services leads to better business outcomes and hiring more workers. More business means more revenue through fair taxation for the government to operate.
When this simple idea is thrown in the rubbish bin, as it has been for decades now, the results are exactly as we would expect them, and as we see them today. The poor class growing exponentially. The rich gaining ever greater shares, the lion’s share, of the world’s resources: money, land, politics, security. And, a faltering economy. Because we are constraining it, not developing it.
Do I really need to say these things?
Our government, along with most others, clings to a clearly failed model designed by the world’s richest people to benefit themselves. Why should this surprise anyone? Seriously! Can we not see where most nation’s constitutions, laws, ownership rights, religions even, are based on the desires, and for the benefit, of those at the top? Can we really not see this? Those whom the newspapers interview for their expert and educated views on the minimum wage effects are those educated by the same universities which serve the rich and politically relevant. The same ones which have completely failed the majority of humanity. Correct, or not?
Everyone knows that higher wages will be passed onto the consumer. Every business cost is passed onto the consumer. Every one! Isn’t this why businesses had less of a complaint about the raising of VAT than the rest of us? Who really pays VAT? The businesses pass it on to us. They don’t pay it. Even if their cost of compliance goes up, that cost is also passed on to us. Sadly, many business owners went along with this hike in VAT, despite the obvious negative effects on our Bahamian economy.
The real question is, and should be, “How do we stimulate our economy.”
Presently, this question has been completely avoided by the loud and distracting calls for more and more Foreign Direct Investment. FDI does nothing to more fairly distribute our common scarce resources, nor does it facilitate raising our own workers standard of living, via increased wages. All it does is to kick the can down the road, instead of allowing for a fair, sustainable, not to mention an eminently Christian way of being rewarded for a good day’s work; to live as respected human beings with a liveable wage. Sustainability does not mean relying on an ever increasing economic diet of FDI.
The neoliberal agenda, which includes Structural Adjustment programmes under which we, and most of the world now operates, is a failed system. The Structural Adjustment programmes being pushed onto the world, include; reducing wages, cutting social services, privatisation, opening borders to trade and raising taxes. Who is left to defend these practices from a moral perspective? This is what governments must do to qualify for these big loans taken out in our name, to be paid back on the backs of our children. So naturally, the politicians who are kept in office by these big loans are the last to speak up on the moral implications, and hazards, of these realities of indebtedness and deals with the devil.
I am saddened by the narrative of the “professionals” who control and frame the conversation. As if, there are no adults in the room. The newspapers and media it seems, can only hear their voices. Never the voices of suffering from the vast majority of humanity, no matter how well articulated. We are not allowed to discuss this suffering it seems, under this pre rational neoliberal economic agenda. Neo-slavery is what it should really be called. An oppressive system which is defended by men and women in empty suits, with diplomas on their walls, whereby the rest of us continue to toil, sweat and labour for the benefit of the few.
There is no clearer indication of a lack of leadership than to have those people, all well known to us here in this small country, continue to cheerlead for a system that is designed to help the chosen few. While leaving the vast majority of us to wither and die on the vine in one of the richest and most productive periods humanity has ever known.
The question should not be: “Can we afford a raised minimum wage?” The real question should be, “Isn’t it about time we treat all people with respect and dignity by insuring a living wage, while at the same time stimulating our economy?” This is what the minimum wage debate is really all about, though some would argue otherwise.
NORMAN TRABULSY Jr
Andros,
December 11, 2019.
Comments
UserOne says...
The best critique I have seen in a long, long time. Thank you. I have said this so many times but people cannot seem to comprehend.
Posted 14 December 2019, 11:49 a.m. Suggest removal
joeblow says...
Good points, but a person can only do three things with money: save, invest or spend it. I believe it is more pressing to educate our people on learning the importance of investing their money instead of transferring it into the hands of those selling numbers, alcohol or 100% human hair, or moving it out of the country into south Florida. People also need to stop making poor choices that keep them in poverty (not getting an education and having children irresponsibly). Until people learn and apply the principles of managing their resources, an increase in minimum wage will not really help them!
Posted 15 December 2019, 11:14 a.m. Suggest removal
sheeprunner12 says...
AMEN
Posted 16 December 2019, 9:42 a.m. Suggest removal
tetelestai says...
Joeblow, I do not -repeat, do not- disagree with anything that you have said. But, I do think that you missed the point of this article. The issue here is "livable wage". In your, again, very true submission, you presume that people make enough money to save. I strongly disagree with your assertion that people need to recognize the importance of saving, all of us - from Eastern Road to Lyford Cay to Len Bias Corner - understand that we have to save. The problem is "livable wage". We do not make enough to save, simple as that! You can't save if you have no disposable income, it is not a question of knowledge, but rather, ability. It is analogous to telling someone who can't swim that if they were just to jump in the ocean, then magically, they will turn into the next Arianna Vanderpool-Wallace. No, it takes the means to do so (i.e. ability to swim, or in our discussion, ability to make a wage conducive for saving). Why the trips to Florida? Because everything here it vastly, vastly overpriced! One has no choice but to go to Florida (or anywhere for that matter) and buy in bulk. Why gamble? Because grown adults have a right to do with their money as they see fit - even if you or I may disagree on what the money is spent on. Tangentially, I like to spend my money on French wines. Should I be castigated for this? But, let's move from gambling and go back to the point. A livable wage allows workers to save more, hence the importance of increasing the same. Most of us in The Bahamas, after rent, electricity, food, i.e., the basics, simply do not have residual disposable income to same (I applaud those of you that do!). So, yes, if we want to be irresponsible, as you correctly point out, a minimum wage will not help us. But, I do not believe that this is the substantive situation. We do need to make more, the current minimum wage is simply not enough to foster savings. Then, we can talk about how best to use disposable income.
Posted 16 December 2019, 11:28 a.m. Suggest removal
joeblow says...
... in truth, is there is a glut of low skilled workers at entry level in this country, that is the main thing that keeps entry level wages low. If somebody under-performs, they can easily be replaced. If people entering the workforce actually had some skill that would enhance a business, employers would be willing to pay more to retain those workers. The biggest problem in this country is that good honest workers are extremely hard to find! It is also the reason we have an inefficient civil service.
Posted 16 December 2019, 3:13 p.m. Suggest removal
Porcupine says...
Exactly right tetelestai. Unfortunately, disdain for poor people transcends a basic understanding of economics. A poor education is hampering this entire nation from top to bottom. The comments section of our paper proves this day in and day out.
Posted 16 December 2019, 8:32 p.m. Suggest removal
Sickened says...
There are also many citizens that we spend everything they have no matter how much you give them. These people will always be poor because at some point you have to stop working and these people will still have nothing. These people are the people that the numbers criminals depend on - and there are lots and lots of these people.
They don't need more money - they need an education.
Posted 16 December 2019, 9:54 a.m. Suggest removal
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