Minimum Wage

“Raise the minimum wage, it is the compassionate economic thing to do.” That is the plaintive plea often made. Is it? What will it result in and who will it hurt? Before the authoritative power brokers make the decision they need to study some examples. After all decisions have results, actions have reactions.

We just returned from beautiful Bermuda. The island is 22 square miles of beauty populated by approximately 62,000 people.

Most of the vegetation was imported years ago from Australia. The island was the jumping off port from North America to Australia. Ships would carry merchandise from the Americas to Australia and fill their empty hulls with plants on their way back. The verdure hills of the island have resulted in rare landscapes. Portuguese were brought into work the crops and their descendants are still the farmers today.

In times past the British had large stockpiles of munitions stored there. It became one of the main involuntary suppliers of the army of George Washington.

The islanders were once friendly and inviting. Fifteen years ago when we started going there Johnny Bunn, a local stood, rain or shine at the primary roundabout near the entrance of Hamilton, waving to every car that passed. Johnny died recently and his friendly spirit did also. People are less friendly and more reserved. One local explained the change as being people are “making babies” at a younger age and not teaching them the values inherent in their culture. This has resulted in a seismic sociological shift.

They have a minimum wage of $23.00. Sounds good to some. What is the result?

When wages increase the cost of goods and services increase. It is the inevitable tit-for-tat. Dramatic inflation has resuted. Gas is $9.00 a gallon. Basic staples, such a bread, milk, and eggs have increased in price. A dozen eggs is between $4.00 and $5.00. Most hamburgers are between $15.00 and $20.00.

There are several beautiful golf courses on the island. The PGA World Cup Championship was held there recently as was the American’s Cup regatta. The initial membership to join the Mid-Ocean Golf Club is one million dollars.

The result of raising the minimal wage is that those who were poor are still poor proportionately. An increase in the minimal wage has resulted in an increase in the cost of goods and services. The ratio is still about the same. Those who have suffered are those on a fixed income. Their wages have not escalated beyond the increase in the overall costs of living. The result is many people have to work two jobs to get ahead.

Bermudans are not as reluctant to speak about poverty as are Americans. They say that poverty is not defined by a lack of money, but by poor decision making. One social worker told us some people are so illogical in making their decision that the average person would know what they are doing will not work. Even after being given wise council they continue to make illogical decisions.

That is not to speak disparagingly about the majority of bright citizens. There are many sharp business people involved with the numerous world headquarters located on the island.

The island is home to 312 churches. Even in this time of declining membership they are making efforts to renew the moral, ethical, social, and spiritual standards of the past.

America can learn intellectually and avoid their pitfalls or learn experientially and suffer their results.