The Tribune

EDITOR, The Tribune.

There is nothing natural or “free market” about the low structural ratio of wages to prices and profits in The Bahamas.

In fact, it reflects little more than traditional attitudes towards labour in an historically slave-powered economy. These attitudes have now been ossified into economic policy by modern-day politicians, who relentlessly consume and parrot the trickle-down fallacies peddled by private financial interests.

Relative both to prices and to the unearned profits of rentier capitalists, wages in The Bahamas are simply too low. That (rather than some genetic trait of irresponsibility) is the cause of the low savings rate that politicians so often scold Bahamians about.

It is also the cause of stubbornly high unemployment, since wages remain the primary medium by which foreign investment is translated into stimulus (and more jobs) in the domestic economy.

That is why every forced or externally imposed wage hike in Bahamian history has been followed by a sharp and sustained economic boom.

Yet still politicians don’t get it. They take only timid credit for pride-worthy industrial agreements with unions and couch their language about minimum wage hikes in almost apologetic terms, repeating the nonsense about the need for caution so as not to disrupt the economy - when in fact the economy’s chief obstacles are the suppressed wages and regressive taxes in which governments have been fully complicit.

There is, of course, a point at which wages can be too high and erode productivity, leading to unemployment. But The Bahamas has never been anywhere near that point. Quite the reverse.

Working class wages (and not concentrated wealth) drive consumption and growth in The Bahamas. And too high a portion of the revenues from enterprise and rent ends up as dividends, while too low a portion goes to wages. That (together with our failure to tax the rich) is our main economic failing.

So government is to be commended for raising the minimum wage. But it is still very far from enough and it is never the wrong time to do it.

ANDREW ALLEN

Nassau.

October 16, 2022.