The Tribune

EDITOR, The Tribune.

Apart from demonstrating that he understands next to nothing about the economy and economic history of The Bahamas, Tripartite Council Vice-Chair Peter Goudie's rejection of the recent finding that the livable wage of New Providence is $2,625.00 confirms just how out-of-touch much of our business community is to life in the modern Bahamas.

For the edification of Mr Goudie and his fellow travellers, every forcible historic increase in the wages of average Bahamians (following the 1942 Burma Road riot, following the 1959 general strike, etc) has resulted in a tangible boost, not a decrease in economic growth.

The same is largely true for our region, where Barbados, Trinidad and the Eastern Caribbean all registered almost immediate increases to economic growth following the introduction or increase in minimum wages.

Why? Because the nature of our traditional economic dysfunction is that too much capital ends up concentrated in the hands of the wealthy (who horde, rather than spend it) and too little in the hands of wage earners (whose consumption drives the local economy at all levels).

In The Bahamas, this is compounded by a government policy of heavily taxing the poor to spare the rich having to pay international norms of taxes on property and income and then pretending (hilariously) that this outrageously stupid and immoral policy has anything to do with attracting foreign investors.

While there are indeed countries that have the balance too much in favour of wage earners, distorting growth, this is very, very far from Bahamian reality, where (in order to spare the wealthy paying their share of taxes and wages) both wages and public spending are far too low relative to the wealth of the country, dampening aggregate demand and reducing growth prospects.

Rather than face the problem, government then goes on a perpetual hunt for endless "foreign investment", looking for new things to sell (airports, telecoms companies, vital infrastructure, oil, aragonite and the list will go on) apparently clueless that all new external investment will produce the same distorted outcome when subjected to the regressive internal wage and tax policies that Mr Goudie and others will always howl to defend.

ANDREW ALLEN

Nassau,

May 14, 2021.