By NEIL HARTNELL
Tribune Business Editor
The Government and private sector will eliminate the middle class "bedrock of society" if they "continue to marginalise and bypass" trade unions, a senior leader warned yesterday.
Bernard Evans, the National Congress of Trade Unions (NCTU) president, told Tribune Business that The Bahamas will end up with two social classes - "the elites and those at the bottom" - if the Government continues to burden Bahamians with value-added tax (VAT) increases and such like.
He warned that the recent 12 percent VAT hike would be factored into upcoming industrial agreement negotiations by the "60 percent" of NCTU affiliate unions whose current deals have expired, thereby threatening to increase wage inflation and business costs.
Mr Evans, though, argued that trade unions had been unfairly "demonised" for seeking excessive pay increases, and said the NCTU and others wanted to partner with the private sector and government to "drive efficiency and productivity" and lower the cost of doing business.
While acknowledging that some may view the unions' existence as "a nuisance", the NCTU president said the labour movement's activist efforts had been a key factor in developing a Bahamian middle class whose spending power was key to the fate of many businesses and the wider economy.
"Almost 60 percent of our affiliates' contracts, industrial agreements, have expired, so they're about to go into new negotiations and will take into account the VAT increase," Mr Evans told Tribune Business.
"What we are mindful of is the continued burden on the employees and the eroding of the middle class. If we're not careful, we will fast become a country of two classes - the elite and those at the bottom.
"The middle class drives the economy; they build houses, and pay school fees and insurance. Make no mistake, if it was not for the unions keeping salaries reasonable... If you look at all who make up the residents of new subdivisions, be it South Beach, out east or Coral Harbour, many of them are part of unions," he continued.
"We are the bedrock of society. You're not going to get it from the bottom rung. They can't afford it. If you marginalise unions and bypass the process of unions, you're going to continue to erode that bedrock of society."
Mr Evans argued that the role played by Bahamian trade unions had frequently been misunderstood, especially by the private sector, and said the labour movement wanted to partner with the business community to drive greater economic growth and prosperity for the benefit of all.
"We are always demonised for trying to increase the standard of living by asking for too much in salary increases, but that's far from the truth," he told Tribune Business. "We want to drive efficiency and productivity, work hand in hand with the Chamber to improve productivity, and improve the ease of doing business in the country. We want to be a partner.
"We may seem to be a nuisance but we're good unions as we're responsible for the kind of economy we enjoy to-date, as we're able to agitate for employees to get more of the pie. It does increase payroll somewhat, but we are responsible for the middle class and, if we're not careful, it's going to disappear."
Mr Evans said the trade union movement wanted current, and future, governments to justify any further increases to VAT and other taxes with empirical data so that "knee jerk reactions" were avoided in future.
His counterpart at the Trades Union Congress (TUC), Obie Ferguson, told Tribune Business that the organisation's member unions were similarly concerned that wages were failing to keep pace with tax increases and continual rises in the cost of living, resulting in an erosion of living standards and disposable income.
Describing the hike to 12 percent VAT as "a major issue" for all TUC-affiliated unions, Mr Ferguson cited several that had been unable to obtain wage/benefit increases for their members in recent years despite rising living costs.
He pointed as an example to an offer from Morton Salt to the company's line staff union, which included a pay increase of "under" 1.5 percent for the first year, 1.5 percent in the second, and 1.6 percent in the third year of a proposed industrial agreement.
The TUC president then hit out at the Water & Sewerage Corporation, accusing it of demanding that its middle management union agree to remove a clause in its industrial agreement giving it a 90-day "first right of refusal" on all outsourcing opportunities in return for receiving a $4,000 lump sum payment.
Mr Ferguson also slammed "some" government corporations for failing to honour registered industrial agreements, and instead seeking to arbitrarily alter their terms and conditions without negotiating with the trade unions.
"That's becoming a very serious issue," he told Tribune Business. "There's no purpose negotiating industrial agreements if the parties are not prepared to honour it. You can't dob it arbitrarily. That's one of the major problems we have in the TUC.
"The economic situation is such that there must be respect between the parties so they can iron out their differences. More often than not, they will find they have more in common than things where they differ."