hunger & poverty

More people are falling below the minimum wage in the Caribbean and there is increased hunger among those at the lowest rung of the society according to Caribbean Quarterly Bulletin of the Inter-American Development Bank.

According to the IDB 36.9 percent of households earning below the minimum wage reported experiencing hunger while 48.7 percent of them reported deleterious changes in their diet with respect to the pre-pandemic period.The bank said the global pandemic is wreaking havoc in the region; vulnerable households have doubled in the first four months of 2020, poverty levels continue to rise, people are going hungry and unemployment is rising.

The report stated that the percentage of Caribbean households with income levels below the minimum wage increased by 20%, from 23% in January 2020 to about 43% in April 2020. The bank’s findings show consistent reductions across all income levels.

Reductions in income are linked to poverty levels which, in turn, impact one’s ability to feed themselves and their families a report done by the New York-based non for profit organisation, the Hunger Project has revealed.

The study showed that while enough food exists to feed the world, a significant portion of the population still lives in such abject poverty that they cannot afford even the most basic food items. This creates an incessant poverty trap. The global poor can’t feed themselves or their families, so they become weak and malnourished which makes them unable to work.

According to the United Nations Food and Agriculture Organisation, 820 million people were already undernourished before today’s crisis; including 135 million people experiencing acute food insecurity.

The Inter-American Development Bank says COVID-19 is taking an unprecedented toll on the Caribbean region and targeted interventions will be needed to protect the most vulnerable.

The bank’s bulletin stated that the decline in the tourism industry will particularly affect the Bahamas, Barbados and Jamaica while plummeting international commodity prices will continue to pose severe consequences in Guyana, Suriname and T&T.

The World Bank estimates that 40 to 60 million people will be living in extreme poverty in the coming months, depending on the scale of the economic shock associated with COVID-19.

It is believed the majority of these people are vulnerable groups in developing and lesser developed nations like the Caribbean region.

In the IDB report added that the number of households falling within the vulnerable category almost doubled in the first quarter of 2020.

The job losses in the region continue to rise, but according to the report the impact on the tourism-dependent economies seem to be more severe as opposed to the commodity-driven economies such as T&T.

The report shows that while businesses have closed, employers in the commodity-driven economies have not reduced staff to numbers comparative to their tourism counterparts.

In the commodity-driven economies the most significant rise in job losses occurred in the low-income sectors.

The IDB said both commodity and tourism-dependent countries show a larger prevalence of job losses in households that earned below the minimum wage in January 2020. The bank states that while commodity-driven markets show a similar pattern, there are fewer business closures.

Tourism dependent countries approximately double the rate of job losses for both the highest and lowest brackets of the income distribution, when compared to commodity-dependent counterparts: 77.3% vs 44.2% among lower-income households and 36.1% vs 14.2% among higher-income households.

Effective social protection systems are crucial to safeguarding the poor and vulnerable during COVID-19.

According to the report, social assistance programmes in the region have increased their coverage by 6.3 percentage points among low-income households and by about two percentage points for households who earned above the minimum wage. The bank states that although social safety nets coverage have increased relatively more among disadvantaged households, they are also a source of inefficiencies in the public spending system.

Minister of Social Development Camille Robinson Regis stated that her government spent over 47 million in social programmes trying to protect the most affected by the pandemic, while the country’s Minister of Finance Colm Imbert reported that the relief package to stabilise and protect the economy may cost the state up to $6 billion.

The report assesses government interventions in the region through aggressive social distancing measures and the rolling out of support packages for individuals and firms.

Fourteen areas are highlighted under several sub-categories consisting of: health and safety, fiscal measures, social measures, support for business, monetary measures and reopening strategies.

Of all the measures highlighted, Barbados introduced the most with 11 policy matter interventions, while T&T’s government has implemented 10 intervention policies covering containment to reopening.

Most experts believe that the crisis will very likely continue throughout 2020 and beyond. The IADB said in the face of increasing fiscal constraints to meet rising social demands, better targeting mechanisms will be necessary. As such, high quality and timely granular household-level data will be needed.

Despite significant recent advances in data collection across Caribbean countries, the COVID-19 crisis has evidenced the remaining gaps in this area.