Eat the rich

During an address to the nation on Sunday, Prime Minister Dr. Hubert Minnis made an emphatic plea to business owners who have seen their fortunes take a turn for the worse during the coronavirus crisis, to be more considerate when contemplating layoffs.

The prime minister, who went off speech, said he is “extremely disappointed when I see Bahamian companies laying off individuals who had worked with them 10, 20 years, who had made them wealthy, who had given them the opportunity to send their children to university both here and abroad”.

“And yet, after all the sacrifices these Bahamians did, those who have attained wealth have laid off such Bahamians.

“I ask you: Are you humane? Where is your heart? Where is your compassion? Do you have a soul?

“Please, let’s be humane and consider those individuals who have made great sacrifices to make you what you are today, but as soon as things get tough, you want to retain and hold onto all you’ve got and continue to take advantage of individuals.”

It is inappropriate for the prime minister to demonize business owners, many of whom have watched their life’s work go lifeless in a matter of weeks, as insatiable monsters stingily sitting atop hoards of treasure without regard for anyone but themselves.

It is terrible that so many have lost their jobs, but business owners are not at fault for the hard choices to temporarily send home many who are like family.

To remind the prime minster, the borders were closed under his authority, a move he must have known would immediately shut down the tourism product that ultimately fuels as much as 70 percent of our gross domestic product.

To remind the prime minster, the vast majority of businesses were ordered closed in March under his authority, a move taken during a month in which business license fees and commercial vehicle registration fees are to be paid.

Though the prime minister announced relief measures for businesses, most of them were either tied to borrowings based on future earnings tied to employee retention or tax breaks based on employee retention.

While those are noble initiatives that may or may not ultimately go far enough, they mainly benefit employees of those businesses, not so much the businesses themselves.

Businesses are still required to pay value-added tax on invoices that have been billed, but payment has yet to be received with the shutdown.

Businesses still have to find cash to make payroll for retained employees in the absence of revenue.

Businesses that retain employees are still required to pay National Insurance Board (NIB) fees.

Indeed, one of the purposes of paying NIB contributions is to fund unemployment benefits for those who lose their jobs.

It is common practice in business to cut costs when revenue is down.

The largest recurring cost of almost every business is payroll.

What did the prime minister expect when, as a result of his orders, most companies saw their revenue streams stop altogether?

Some of these businesses were forced to furlough, or temporarily lay-off employees, in order to survive a shutdown whose ultimate end date is unclear. 

There have been employers – small, medium and large – who have commendably kept their full staff complement on payroll for the last few weeks, Kelly’s and AID among them.

But, not every business is positioned to do that.

Most businesses do not have an endless supply of money; many try to find payroll on a weekly basis.

Not every business was making huge profits, and the directors of those that were have a duty to their shareholders to protect the viability of the business, so that it can reopen on the other side of this shutdown.

Instead of blaming business owners for the natural consequence of an unprecedented nationwide shutdown, what the prime minister should do is make sure that laid off employees and those self-employed are receiving the promised government assistance in a timely manner.

What the prime minister should do is consult with business owners on the best way to make sure they can survive this shutdown and reopen when the economy gets going again.

Unfortunately, there are many that may not.

We share the Bahamas Chamber of Commerce and Employer’s Federation’s disappointment in the prime minister’s comments.

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source https://thenassauguardian.com/2020/04/21/eat-the-rich/