Two reports released recently show how Bermuda is failing to recover from the recession.The Bermuda Labour Market Survey reported that there was a net loss of 700 jobs last year, including 100 held by Bermudians. In three years, 2,800 jobs have been lost, a decline of seven percent.Seen another way, if the median salary for jobs in that period was around $58,000, that means that in 2011, around $160 million less was paid in salaries in Bermuda in 2011 than in 2008. Clearly, this is not an exact figure as it may be that more high paying jobs — or low paying jobs — were lost, but it is clear that a huge amount of money is gone.Since a salary is not spent once, but multiple times (you get paid, you buy groceries, the supermarket pays its employees, suppliers, taxes, utilities and so on as a result, these recipients spend the money in myriad ways and the money continues to flow through the economy), it is easy to see how a seven percent decline in jobs can have the effect that it has had.On the heels of the Employment Survey, the Bermuda Employers’ Council release of its survey demonstrated the gloom that engulfs the business community. There is no doubt that the decline in employment has fuelled this gloom, although it is not the primary cause of the recession.Most employers expect the recession to extend not only through 2013, but 2014. That means more job losses, more reductions in spending and a continued decline in areas like construction and real estate. It also means continued reductions in Government revenue, and quite possibly continued and wider budget deficits.The other message from the BEC survey goes to confidence, or the lack of it. If most business owners and senior managers expect the recession to continue, they are unlikely to take risks, hire staff or invest in their businesses when they expect the economy to continue to shrink. There will be exceptions, but this lack of confidence feeds on itself, and will worsen the downward spiral unless steps are taken to reverse the trend.But who can blame them? There are times when the Government still seems to be in denial about the recession and what Bermuda can do to recover from the recession and return to growth.However, job losses are not the main cause of the recession. They are a major symptom, and a reaction to a shrinking economy. As Shadow Finance Minister ET (Bob) Richards and others have pointed out, the cause of the recession is the decline in foreign exchange earnings which has taken place, compounded by the bursting of the real estate and construction bubble.It is notable that employment in the public sector is now higher than it is in international business. That means more people are employed spending foreign exchange than they are generating it; a dangerous trend.The only way to begin a recovery is to see foreign exchange earnings rise. Right now, Bermuda has only two means of doing this; through international business, primarily reinsurance, and through tourism.Of the two, any growth in tourism is likely to be limited because the infrastructure, or more literally beds, are not there. Last year saw a record number of cruise visitors come to the Island, and this year may be even better, but the economic benefits were relatively low. Hotel visitors are constrained in the ever shrinking tourism season by the lack of beds. Even if a hotel construction project comes off, it will be years before it will be finished.So international business, where there is no shortage of infrastructure or capacity in terms of office space and so on, is the best bet. But due to industry changes and Bermuda’s own failure to make insurers feel as welcome as they should have, it is unlikely that the Island will see any substantial increase in companies or jobs in the short term, unless there are substantial changes in employment policies.In any event, Bermuda needs to diversify the international business sector. Encouraging more asset managers to Bermuda, a process that is beginning, needs to be pushed further. Similarly, as this newspaper as stated before, the international banking sector needs to be opened up.Bermuda also needs to make it easier to hire people, not only through changes to Immigration, but through the cost of doing business. Bermuda may be a low tax jurisdiction, but it is a high cost place to do business. Reductions in payroll tax, Customs duty and other benefits would encourage more hiring, and would help the economy to grow. Clearly a balance has to be struck to ensure tax revenue is not hurt too badly, but the economy needs this kind of stimulus now.