The ambivalence of Bermuda immigration

One of the bizarre traits of human nature is the aversion to, or even the dislike of anyone who is different. When people are pigeonholed or classified into an abstraction it is easy to dislike them, or even hate them.  

By definition, immigrants come from somewhere else, they tend to dress a little differently, talk a little differently, eat a little differently, some do not speak English, and there are a host of other characteristics that mark them as being different from Bermudians. People are defined by possessing unique talents and minds. Immigrants are defined by the color of their skin, or by the religion they practise, or the country in which they were born.

On a small remote island, it is easy to pass this off as mild racism or xenophobia, but the facts are much more complicated. In terms of the functioning of the economy, immigrants (aka guest workers or expatriates) are essential. Without immigration, the Bermuda economy would not be able to function at its current level of efficiency.

Many international companies and hotels would have to close down, hospital and senior care would be impaired, computers would fail to function, many restaurants would have to close, the standard of gardening services and golf course maintenance would decline, and Bermuda would be a very different, poorer and less pleasant place.

After the terrorist attacks on New York and Washington in 2001, the president ended his address to the nation by saying “God Bless America.” All over the country people sang what is almost an informal national anthem “God Bless America.”

Few knew that this stirring piece of music was written by an immigrant, who went on to write such American standards as “White Christmas,” “Easter Parade,” and “There’s No Business Like Show Business.” 

The composer was Irving Berlin, whose real name was Isidore Baline (1888-1989), who became one of the most popular songwriters in U.S. history. He was a Jewish immigrant (his patrician Yankee father-in-law would not speak to him because he was Jewish), born in Russia, and emigrated as a child to New York City in 1893.

At the age of eight, he was compelled to sell newspapers and became a street singer in order to support his family. He had no formal musical training but he was able to compose music and write lyrics. His first published work appeared in 1907, and a year later he wrote another American classic “Alexander’s Ragtime Band.” Had he been born 20 or 30 years later, he would not have been allowed to enter the U.S. – and America (and the world’s musical public) would have been the poorer.

Bermuda has many such stories to tell. Freddie Yearwood came to Bermuda from the West Indies in the 1930s as a waiter and ended up one of the richest men in Bermuda, and chairman of the Bermuda Monetary Authority. The first black premier of Bermuda, Sir Edward (E.T.) Richards, came from Guyana in 1930 – his son is the current finance minister. David Graham, an English lawyer, played a big role in establishing Bermuda’s international business. Robert Clements, Robert Newhouse, Ernie Stempel and Fred Reiss (all Americans) were among many immigrant moving forces behind the establishment of the insurance industry. Juan Trippe, also an American, was a pioneer in the tourist industry. Furness Withy, a British shipping company, built one of the first major hotels, the Castle Harbour, in the 1920s.

The list could be continued ad infinitum from people who arrived as gardeners but whose children went on to be lawyers or politicians. The essential point is that immigrants (and people generally) are a source of strength to an economy. They bring vitality, entrepreneurial skills, a professional approach to work and new ideas.

Immigration is as close as one can get in economics to a win-win situation. The host country benefits, and so does the person who seeks a new life in a new country, no matter how temporary that life is. Open and free immigration has improved Bermudian society (in one sense, everyone is an immigrant, or descended from immigrants) and has noticeably improved the economy.

Much of the disparaging talk from far too many Bermudians, unfortunately, is fanned by the quality of political debate.

Immigration policy, although it works surprisingly well and has the support of the majority of Bermudians, is largely based on two economic fallacies:

  1. Immigrants are an economic problem, because they compete for a limited number of jobs, housing, educational places for their children, add to traffic congestion and so on.
  2. Immigrants take jobs away from Bermudians who need government protection from unfair competition. Linked to this is a sub-fallacy, that the amount of work in an economy is finite (known as the lump of labor fallacy).

Neither of the above contentions is correct – and the amount of work to be done is never limited. Clearly, there are limits to the number of people Bermuda can comfortably accommodate, but no one knows what the optimum population level is. Geographical size is not the determinant of how many people can be absorbed into an economy. Do we ever hear store owners complain that there too many customers?

For the businessman, a customer is someone that is a source of profit; he is not a problem. Bermuda is densely populated compared to the U.S. (or almost any other country) but not by comparison with Manhattan, Paris, or Hong Kong – all of which are pleasant places in which to live and immensely wealthy.

The employment statistics (rounded) show that in 2013, there were 34,500 jobs in the Bermudian economy. There were 7,800 non-Bermudians employed representing 23 percent of the labor force.  Unemployment is currently around 8 percent.

Those who favor restraints also argue that immigrants or expatriates “steal” employment opportunities from Bermudians. Such arguments are countered with the view that skilled expatriates enhance the competitiveness of Bermuda, make it a more productive place, and raise the standard of living for everyone.

In addition, international business requires a disproportionate number of professionals. Accountants, lawyers, actuaries, insurance underwriters, computer programmers, portfolio managers, and a host of other professionals are required to service that business. There is a secondary beneficial effect on the economy, as immigrant professional generate many opportunities for support staff such as receptionists, clerical assistance and maintenance staff.

In many cases, staff that have been released from the hotel industry in recent years have found similar work servicing the needs of international companies. Instead of cleaning rooms in hotels, people now clean offices. Instead of serving lunch for tourists, delis sell sandwiches to office staff. Instead of carrying suitcases to hotel rooms, courier services deliver packages to company offices.

The high levels of immigration enable a transfer of technology from the U.S., Canada and Britain to Bermuda, and that transfer of knowledge supports the high levels of economic growth (until recently) that have characterised Bermuda in the past 50 years.

Without that added expertise, it would not have been possible for Bermudians to earn such high incomes. In order to continue to service international business, it will always be necessary to attract, and retain, sufficient non-Bermudian professionals from abroad. Because Bermuda is an attractive place to live, because salaries are high and taxes low, there has been little difficulty in recruiting people from all over the world.

Many Bermudians are not attracted to jobs that pay low wages, have unsociable working hours, or involve unpleasant and distasteful tasks. Examples of jobs which over the years have traditionally failed to attract sufficient numbers of Bermudians are gardeners, agricultural workers, police officers, nurses, teachers, and in recent years, service workers in the hotel industry. This is consistent with a prosperous modern economy.

The inhabitants of Germany, U.K. and U.S. have not shown enthusiasm for low-paid and hard physical work. Increasingly, wealthy countries are immigration destinations for the citizens of third world countries eager to escape harsh economic conditions, or political repression, at home.

Bermuda is a small community, and by virtue of its size cannot generate sufficient numbers of skilled people to operate its modern economy. If Bermuda, through its parents, employers, or scholarship arrangements, had to foot the bill for the educational costs of professionals, such as accountant, engineers, lawyers or insurance underwriters, those costs would be astronomical.

The presence in Bermuda of highly and expensively trained foreign labor is a form of foreign aid that does not have to be repaid by Bermuda. The standard of living enjoyed by Bermudians simply would not be possible if the costs of educating and training had to be financed locally. Many developing countries would be delighted to have this injection of free foreign capital into their economies.

There is, and always has been, a close association between economics and politics, and Bermuda is no exception.

Immigrants do not vote and the chances of becoming Bermudian are minimal under current laws. Children born in Bermuda of non-Bermudian parents are not Bermudian, even if they spend all of their young years as residents. That means the political influence of the expatriate population is at best diminished, at worst minimal or non-existent.

Playing on irrational fears about immigrants has long been a staple of unscrupulous politicians – myths can be more potent in economics than truth. Enoch Powell and Nigel Farage in the U.K., George Wallace and Pat Buchanan in the U.S., and Jean-Marie Le Pen in France (and now his daughter) are a small sample of political leaders demonising a group because they are different.

Logic and truth are not characteristics of zealots and immigration is clearly a combustible subject. It would be surprising if some of Bermuda’s politicians failed to take advantage of the opportunity to earn votes by playing the fear and race cards in the political process. This was recently seen in March 2015 when a Senate session was interrupted by chanting mobs furious at changes liberalizing immigration laws. The tragedy is that democratic politics makes it a successful strategy for politicians to play on the gullibility of an ill-informed electorate.

But individual Bermudians are not usually that foolish. Their common-sense, sense of decency, and sense of justice are a refreshing contrast to that of the political leadership.
For example, in 1989 the then opposition Progressive Labour Party political platform defined one of the major issues facing the country as the “restoration of the Bermudian birth right through tightened immigration policies, the need for an immediate moratorium on the granting of status, and a more effective programme of Bermudianisation.”  When it came to power in 1998, it followed through on its promise to the long-term detriment of the economy.

More recently, in an editorial of April 8, 2015, the Royal Gazette stated, “It’s indisputable that myopic and arbitrary changes to Bermuda’s work permit rules were every bit as much responsible for the rapid contraction of our economy – prompting the relocation of some international firms and a massive exodus of jobs – as the impact of the local recession.” It was an economic blunder of the first magnitude.

The ambivalent approach by Bermudians to non-Bermudians has to be kept in proportion. What would the reaction of Americans in New York be if 25 percent of the population were of Korean nationality, or in Britain if 25 percent of the population of Birmingham were Jamaican, or in Canada if 25 percent of the population were Indian?

Race is always a sensitive issue. Most immigrants are white males, largely from U.K., Canada and U.S. (black immigration is relatively modest – mainly from the West Indies, usually Jamaica or Barbados). Unfortunately, in public debate, the subject of immigration, and its impact on the labor market and Bermuda society, tends to generate more heat than light.
However, a new specter has arisen.

Bermuda’s population is shrinking and unemployment has soared. In a recent Royal Gazette article, the former premier Sir John Swan drew attention to Bermuda’s “demographic time bomb” which has reduced population by around 10 percent to 12 percent. Many young Bermudians were emigrating to greener pastures overseas – that part of the population that Bermuda can least afford to lose.

A government pamphlet titled “Emigration: Bermuda’s Qualified Human Capital Departs” reported that “1,121 people emigrated from Bermuda, the median age being 28, that nearly half left because of employment problems, and that 53 percent held degrees, and 30 percent were professionals.”

Bermudianization is a policy that states, if a qualified and experienced Bermudian, or the spouse of a Bermudian, applies for a position, the employer must appoint the Bermudian applicant. 

In the vast majority of situations, this creates few difficulties, which is surprising as the Immigration Department, which adjudicates on applications, usually has insufficient information about the position to make a judgement on the majority of job applications. The prospective employer, on the other hand, knows his business, knows what knowledge and experience is required, and is able to determine after an interview whether the personal attributes of the applicants (like punctuality, enthusiasm, dress and speech) meet with his expectations.

Problems invariably arise in difficult cases, especially in relation to what being “qualified” and “experienced” really mean? The issue is made more complicated because many in the public believe that the procedures employed by the Immigration Department are not fair (a subjective assessment at best).

Bermudians turned down for a job believe that employers may have inflated the qualifications and experience required, and there are sufficient examples of this to be a reasonable belief. Employers who have applications to hire non-Bermudians turned down by the Immigration Department believe that officials do not understand their requirements, and that they are compelled to hire someone who does not match their standards of efficiency.

Why should there be a Bermudianization policy in the first place? The cost of a Bermudian employee is often (though not always) less than the cost of an expatriate. In many cases, the individual making the appointment is a Bermudian, and therefore any existing bias would tend to be exercised in favor of a fellow-Bermudian. Given the natural bias towards Bermudians, is a civil servant who knows little about the business in which the employer is engaged in a better position to know what qualities are required for the job, especially when the civil servant (or the board) has not interviewed the job applicant?

Critics of the system say that many employers are faced with substandard employees, particularly in the international business sector of the economy, and that this raises costs, which in turn affects Bermuda’s competitive position. Others say that some employees are promoted beyond their capabilities in order to avoid difficulties with the Immigration Department.

There is some truth to such criticisms, but it is very difficult to replace the existing arrangements and law with one which is able to balance the competing interests of employers and potential Bermudian employees, and which, at the same time, will command widespread public support.

Anyone who has worked in a business environment will know that bringing to a position the qualities of experience, honesty, reputation, interpersonal skills, decisiveness, and so on, are just as important as a formal qualification or degree from a good university. Selecting a successful applicant for a job requires more than a fair degree of subjectivity.

That being said, a strict application of the laws brings about absurdities. For example, in 1996, a church was unable to appoint a priest acceptable to the church committee because the Bermuda government was unwilling to grant a work permit to an English candidate. A compromise was reached whereby the church was given a temporary permit, and the church was able to open with a foreign priest at Christmas.

A more vindictive example arose about five years ago, when at a local golf club, a waiter from Bangladesh was deported because he served a drink to a member when he was not employed as a bartender.

It is not surprising that allegations of favoritism, bias against Bermudians, racism, or nepotism arise when top jobs are filled by non-Bermudians. More remarkable is how infrequently such allegations are made, indicating that the Board of Immigration, despite its limitations, is able to do a creditable job, or that many qualified Bermudians are sufficiently candid about their own limitations to say that it is important to get the best man for the job rather than opt for a Bermudian.

There has been much progress made in recent months. The current immigration minister has introduced sensible reforms, such as the junking of what was known as a “term limit policy,” whereby work permit holders had to leave after a given period.

This makes it easier for long-term residents to become Bermudian, and restrictive work permit rules, such as the requirement for every work permit holder to have a chest X-ray, have been substantially relaxed. All of this is sensible and will undoubtedly lead to more economic activity. Nevertheless, the “Standard Work Permit Application Form” runs to 20 pages.

The question is: to what extent does the government’s Bermudianization policy work?

There are circumstances where Bermudians are in jobs that are beyond their capabilities; there are Bermudians who, if the world was perfect, would occupy better positions; and there are many Bermudians who are in jobs which perfectly match their talents and aspirations. Immigration is a subject that can never be resolved to everyone’s satisfaction.

Most immigrants to Bermuda bring with them thousands of dollars of human capital. Think of how much it costs to educate and train a chartered accountant or an engineer. In addition, many of them are networkers in international business who can bring together such essentials as ideas, people, products and financing from almost everywhere in the world.

On occasion, Bermuda somehow manages to treat such people as lepers and makes it known that they are unwelcome. It is the ultimate in financial stupidity to pay huge sums to attract to Bermuda foreign tourists for a few weeks, but then tell foreign visitors who stay for years, but who happen to work in international business, that they are not wanted.

Bermuda seeks to benefit from foreign investment and from non-Bermudian workers, but it does not wish have foreign investors and workers with rights to stay and vote. This is not a long-term sustainable policy to adopt.

Although there are many merits to the existing immigration policy, it is hard to escape the conclusion that, as with all forms of protectionism, immigration laws do not protect; they destroy.

Bermuda has yet to learn that lesson.

 

Euro-money