The Tribune

ON April 7th, Moody’s released its updated sovereign credit rating for The Bahamas, moving us from “stable” to “positive”.

While I personally give little credence to the likes of Moody’s, Standard and Poor’s or the other dismal footmen of international capitalism (none of whom understand the Bahamian economy any better than my cat), this will at least deprive elements of our local media of an opportunity to distract voters away from the things that really matter.

In fact, in light of a largely uneventful recent calendar of credible “corruption” stories, a remarkable recovery from the deplorable Minnis era and a stabilising murder rate, there is every reason to hope that Mr Davis’ can be the first two term government since 2002.

But perhaps the easiest fix of all for any sensible Bahamian government seeking re-election is to adjust the minimum wage upward once again – and substantially so.

Relative both to the general wealth of The Bahamas and to prices here, our minimum wage is simply too low.

To illustrate this, consider a comparison with Jamaica, which is less than a fifth as wealthy as The Bahamas, yet has a minimum wage more than a third as high as ours.        

In terms of prices, consider that every single cost to a foreign investor in The Bahamas (and to Bahamian consumers, too) is higher here than on the US mainland - with the exception of labour. This, and nothing else, is the ultimate explanation of our permanent “cost of living” crisis. It is also a structural strain on growth in the domestic economy, which always lags foreign investment levels.

It is important to understand that the wealth upon which we all live is not generated in The Bahamas. It is generated externally and is merely circulated here.

So by raising wages to ensure that more locally circulated wealth goes to employees (consumers) and less to employers (middlemen), government does not constrain either investment or employment levels. Rather, it merely directs more foreign capital into consumption in the domestic economy and less into dividends and profits parked in private accounts – enhancing economic growth.

With the very real possibility of another global recession on the horizon (and with an opposition desperate to reverse the gains of progressive government), it is advisable for the Prime Minister to call an election ahead of any headwinds – and to begin the campaign with a substantial increase in the national minimum wage.

ANDREW ALLEN

Nassau, April 9, 2025.