reduced working hours, Government officials said yesterday.

But Finance Minister the Hon. David Saul said incomes probably expanded again between 1991 and this year, because inflation had slipped below three percent from more than six percent a year earlier.

According to the 1991 census, average household income -- put at $48,588 -- grew 16.4 percent between 1988 and 1991 while inflation increased 16.6 percent.

This was one of the findings of the Census, taken last May and June. It showed Bermuda's population was larger, older, better educated and wealthier than in 1980, but was also feeling the effects of the recession.

A Ministry of Finance spokesman said the shrink in incomes -- after outstripping inflation by an average 2.5 percent through the 1980s -- was due less to wage restraint than job losses and shortened work weeks.

"You have to bear in mind that the economy has been in recession for three years and this statistic is not just a reflection of hourly wages but hours worked,'' the spokesman said.

"We know from the Census that there are number of people looking for jobs and income has therefore fallen. We know people are on short hours and we know they have lost jobs.

"Overall gross domestic product has fallen by 6.5 percent in real terms and that is an indication of the impact on households. It may get worse yet because Bermuda is still restructuring.'' Opposition Leader Mr. Frederick Wade said he believed incomes probably shrank more this year as more jobs were lost.

The census revealed that more than 2,000 people were looking for work last May, a far higher figure than the Government estimates of around 700. That figure was based on the number of people who had registered with the Government Employment Office or were receiving social assistance.

Dr. Saul said the figure appeared accurate, but did not distinguish between those who were looking for work but held a job as well.

He said Government was continuing to gather information on an unemployment insurance scheme, adding that Government Budget Director Mr. Carl Musson was attending a conference on unemployment insurance.

But he said Government would not run the risk of introducing a scheme quickly which was later found to be unworkable.

Mr. Wade said the Census figure showed Government had been underestimating the number of unemployed and called for the immediate introduction of an unemployment fund.

"We are in crisis,'' he said. "If the Premier is right, and Bermuda will never be the same again after the recession, a lot of those jobs are gone forever and we will not just have temporarily unemployed, there will be structural unemployment.'' "The way Dr. Saul is going it will take too long. We need a programme now.'' The report also confirmed several other trends in the Island's population, the most significant of which may be the fact that more and more Bermudians were heading toward retirement.

The number of people who described themselves as retired was up from 1,904 or five percent of the population in 1980 to 3,443 or seven percent in 1991, an increase of 81 percent.

Those over 65 made up nine percent of the total population compared to eight percent in 1980, and among the Bermudian population, senior citizens make up 11 percent.

The Finance spokesman said the trend would require people to save more to ensure their retirements would be secure.

"Obviously what will happen is they will have saved and they will now draw down on their savings,'' the spokesman said. "We will have to look carefully at the savings motive in Bermuda.

"It also makes income tax more unlikely because with a dwindling working population you have a lower level of income tax. That is why many western nations with aging populations are now moving away from income tax and toward consumption taxes.

"The other debate may be over how many schools do you need compared to nursing homes.'' Mr. Wade said there was a need for Bermuda to make comprehensive plans for the elderly, and to look at what social support would be needed in the future.

This would be a major plank in future PLP platforms, he said.

Dr. Saul said Government would need to look at pensions again and see what sort of scheme would be most suitable to support an elderly population.

HO. David Saul.