#BTEditorial – Climbing out from the bottom of this pit

From the earliest of times, societies have had to confront the vexing matter of how to address the issue of poverty. We in Barbados have reaped a level of success in battling this blight when we take into account our most unpleasant history of slavery, colonialism and the plantocracy.

Barbadian authorities acted on recommendations of the Moyne Commission which advocated the institution of major social and economic reforms following deadly riots across the British West Indies in the 1930s. Our societies have become more sophisticated but poverty still remains a significant challenge.

Enter the novel coronavirus (COVID-19) which has exacerbated the economic, societal and educational inequities in most countries. There have been intense disruptions of trade and travel, business activity has come to a near halt, and Governments are struggling to find ways to raise revenue to undertake many of the social services citizens still expect. That has been extremely difficult to achieve when the base from which those tax dollars are expected to come has been decimated by record high unemployment and business closures.

Prime Minister Mottley has already warned us that tax takes are down by nearly 40 per cent. All this is happening while our unemployment rate is heading for a staggering 50 per cent of those adults available and looking for work. It is a situation we have not experienced in our lifetime.

The recent Inter-American Bank (IDB) and Cornell University study titled The Unequal Burden Of Coronavirus Pandemic: Evidence From Latin American And The Caribbean, sought to measure the economic impacts of the pandemic on households. And as expected, those at the bottom of the economic ladder and surprisingly middle-income workers are the ones taking the brunt of the pandemic’s worst outcomes.

It is the former group of persons who is likely to be working in low-skilled, low-paying jobs that are forced to return to work on the frontlines before their counterparts in higher-income and higher educated professional class who have the luxury of working from the comfort and safety of their homes.

IDB country economist Laura Giles Alvarez, who has authored several studies and reports on developments in Barbados and the Eastern Caribbean, revealed that middle-income households (those earning between one and four times the minimum wage), have been the most affected by the economic shock”.

Her research has suggested that between January and April 2020, 51.5 per cent of middle-income households reported job losses, compared with 49.4 per cent of low income households and 38.7 per cent of high income households.

If that were not enough warning to our political leadership that we are in for extremely turbulent and highly disruptive times in this economy going forward, the economist points out that surveys showed a doubling in the number of households earning below the minimum wage between January and April 2020.

Our vitally important National Insurance Scheme (NIS) has paid out more than $70 million over the past five months and in the next two months, thousands of households will be literally on their own as the 26 weeks of benefits come to an end.

We accept that the current climate does not augur well for the job hopes of those currently on the breadline. And the recent utterances from the leadership of the Barbados Chamber of Commerce & Industry and the Barbados Private Sector Association that more private sector layoffs are expected because of the loss of spending power by so many consumers, adds to our already miserable economic picture.

While it is easy to pontificate about the need to diversify the economy, we understand that in the middle of such a pervasive, global economic crisis, such an undertaking is near impossible. Our hopes remain pinned to the travel and tourism sector as well as international business.

It is for this reason that we throw our full support behind the Barbados Welcome Stamp initiative that welcomes higher income professionals to live here for up to a year and work remotely from what, under normal circumstances would be their vacation situation. It is really the best of both worlds for the visa holder, and it would mean the world to our economy which has been crippled by this pandemic.