As times get tougher in Bermuda, and employees compete for jobs and firms compete for an ever dwindling work, the law of unintended consequences is starting to get amplified.

For example, we're currently seeing a debate about work conditions, pay, and hours in the construction industry for Bermudians versus foreign workers.

The argument has thus far centred on the obvious - immigrant labour anywhere will work for less and work much longer hours than the local population - that's almost a given. Work permit holders are here to work, and they're explicitly told by the Minister not to expect any permanency, and that they aren't welcome for long, so they cram in as much work as they can do. Make hay while the sun is shining.

Bermudians with their families and other commitments here want more normalized working hours.

The construction industry flare up was pretty much inevitable. Employers need to bid competitively and cutting labour costs is the best way to get your number down without reducing your profit margin.

But here's an issue which doesn't get discussed, and what I think is an unintended impact of work permits:

Foreign workers are not just more attractive at times due to willingness to work longer for less, they are also less mobile. The employer has a level of control over their foreign employee as they're only allowed two jobs in 5 years and must seek a release from the current employer to seek new work.

So some employers I suspect see a work permit as an asset; their employee cannot jump ship for a new employer, and they may, just may, lean towards non-Bermudians for that reason.

Here's another.

A company has two employees who are indistinguishable in skills, performance etc.. They're both valuable but one is Bermudian, one is not. The employer doesn't want to lose either but knows that one is reaching the end of his 6 year limit.

So what happens? They begin to inflate (either artificially or for real) the position, title and responsibilities of the non-Bermudian in order to get him that key employee status so he can stick around.

And the Bermudian loses out as some non-Bermudians benefit from what I call key-employee title inflation.

Bermuda's immigration policy is broken. It lacks realism and is a serious impediment to Bermuda's future growth and prosperity.

It's time for it to be completely revisited, absent the inferiority complex, xenophobia and elitism that is embedded in it. Bermuda's immigration policy is contributing to many of these problems not preventing or fixing them.

At the end of the day it is quite simple. If a Bermudian is available to do the job then they should get the position. If not then it doesn't matter who the expat is and whether they've been here for more than 6 years or not. Churning expats is idioitic, expensive and pointless - other than political window dressing.

If a non-Bermudian has been filling a job for over a decade and been a good, productive, upstanding citizen - a net contributor to Bermuda - why shouldn't they have an expectation of long-term residency, or - gasp - citizenship?

I know, I know. I just touched the sacred cow of Bermuda politics.

From the Ministry of Bizarre Press Releases today we get this:

In response to media inquiries, the Cabinet Office today confirmed that Head of the Civil Service, Mr. Kenneth Dill reaches retirement age in September 2010. Public Officers appointed under section 82 of the Bermuda Constitution reach retirement age at sixty-five years.

Premier Dr Ewart Brown indicated today that despite numerous attempts to contact the outgoing Head of the Civil Service, the matter had not been discussed with Mr. Dill.

"I have spoken with the Governor today concerning an interim arrangement for the period between Mr. Dill's departure and the swearing-in of a new Premier in October," the Premier said.

The Premier can't get hold of the Head of the Civil Service? Or the Head of the Civil Service won't return his calls? Really. That's shocking.

And the outgoing Premier has issued a press release telling Mr. Dill to not let the door hit him in the ass as he's run out of the office on his birthday because he's 65?"

How bizarre is this? Way to go on succession planning.

I'm just restarting the engines after a couple of weeks of vacation, but in the meantime I'd suggest reading the Chamber of Commerce's August newsletter which addresses the impact of the massive and rapid build-up in debt, mostly to cover current expenditures in the past several years.

Traditionally, the Government has borrowed to partly fund capital projects (the balance of the cost was provided from the surplus on current account) and in periods where the costs were small, the borrowings were repaid. Thus throughout the period from 1970 - 1990 the borrowings were repaid usually within 10 years.

The last time that Bermuda had zero public debt was in 1991. From 1991 to 2004 it grew to $160m; from 2004 to 2008 it increased to $345m and now it is projected to be $900m by next March. This recent build up has not been created by capital spending alone but because the total expenditure on current operations has exceeded revenues. Thus all debt service costs and capital expenditure have been borrowed in recent times.

This is akin to not paying the minimum amount on a credit card statement and then continuing to rack up new purchases.

This situation will not be solved by an incremental rise in Government revenues as the economy recovers because all of these increased borrowings create their own demands for debt servicing. To continue the analogy above, a bonus or other extra income will not solve the credit card problem if you continue to live beyond your means; it requires a change in behaviour.

Economists term this situation a "structural deficit" because the root causes are not found in the level of economic activity but in the imbalances between revenues and expenditures.

I get a real sense that we're going to see a return of realism to Bermuda politics after the last 4 or 5 years of hyper-politicisation and vanity tenure of the outgoing Premier.

The PLP, both in candidates for Dr. Brown's seat and the front-running Paula Cox for Premier continue to exhibit little in the way of introspection or a changing of the guard. It's business as usual, the same old faces and the establishment digging in for another round.

On the periphery you have Terry Lister and Dale Butler who both seem like longer shots but are making noises that run so counter to mandatory PLP dogma that it's hard to see where it gets them. Both appear to be running campaigns aimed at a national audience and hoping the PLP decides to acknowledge the prevailing national mood of unease and concern for our social and economic future.

At best I suspect it may result in a moderation of the PLP who have become very radical during their Brown years, led by manufactured controversies and confrontation and wildly disingenuous distractions.

That doesn't bode well for Bermuda in the short term, but I do suspect that what we'll see is an increase in involvement from the many young, realist, professional types. They've sat on the sidelines for years in disgust but are coming to the realisation that we're running out of time and it's their future that is being thrown away.

The next generation must step up and start undoing the damage of the past decade. Tragically, after a decade of rapid economic expansion and budget surpluses due to a well positioned economy that the PLP inherited (and some good fortune in two major catastrophic events), Bermuda finds itself in a huge debt position with escalating violent crime, unemployment and declining investment.

It really is a lost decade.