A leading economist is urging Barbadians to prepare for rising financial pressures — and even consider emigration if the going gets too tough — as the government increases national insurance and social security contributions, and US President Donald Trump’s global trade tariffs threaten to drive up the cost of imports.
Beginning this month, National Insurance and Social Security Service (NISSS) contributions have risen from 0.1 per cent to 0.25 per cent, with the additional funds earmarked for a new resilience fund designed to strengthen the country’s social safety net.
On Thursday, Economist Jeremy Stephen told Barbados TODAY that this increase is just one aspect of a broader economic challenge facing Barbadian households as US tariffs take effect in the coming weeks.
“It’s going to be rather difficult to put down something for the future, especially to consume today, to raise a family today,” Stephen said, adding that navigating this volatile economic environment requires prudence and long-term planning.
He cautioned against quick-fix strategies that households might adopt to alleviate financial strain, warning that such measures often lead to criminal behaviour.
“Any adjustments that you have to make, if you make them quickly or plan on making them quickly as a family, as a person running a household, you might lend yourself more to an element of criminality than not, simply because the best quick fixes tend to take advantage of others,” the economist said. “But definitely over the past year, we’ve seen how a lot of people were into pyramid schemes as a result.”
For those facing extreme hardship in Barbados, Stephen suggested emigration might be a viable option.
“I would even go as far as to say that one of the most logical things is to go and find economic opportunity wherever you can, which might mean emigration. Emigrating to the USA might be off the table in the traditional sense and Canada as well and the UK, where Bajans love to go. So it may mean going somewhere else,” he said.
“It may mean going to Guyana. Guyana may not have salaries that are commensurate or similar to what we have here, but at least you would have a job and, maybe down the line, something to send home and contribute here.”
Stephen also highlighted how current economic challenges will make it increasingly difficult for couples to start families, due to the sacrifices required—an issue with serious implications for the country’s current population crisis.
“It’s going to be rather difficult to put down something for the future or to raise a family today,” he said. “What’s happening is really an issue that calls for an all-around response—a new way of thinking in each household, a reality that having a lot of children is more of a tax on people with financial means than not.”
Stephen added: “The middle class bears the gross majority of the tax burden. And as it stands, you would find that people in this class have been bearing most of the taxes while having the means to have more children—especially when a lot of the burden may come across as having financed someone else’s lifestyle who might have lesser means. So basically, poor people seem to have children much easier simply because there may be more provisions towards protecting them than it does the middle class.
“I’m not saying in any way that poor people have taken advantage of the system, but more or less that the current taxation policy favours or helps or assists the poor more than it would the middle class.”
Last year, Prime Minister Mia Mottley brought attention to Barbados’ shrinking and older population, warning that it poses a threat to the island’s way of life and its social systems.
“Our country is in a crisis with respect to an ageing and declining population,” she said last July in Parliament. “Our country needs now to make decisions that may be difficult for some but necessary for all. That decision will lead to us committing to maintaining our values and our way of life as we know it.”
Looking ahead, Stephen suggested policymakers should introduce measures tailored to Barbados’ financial and social realities.
He said: “Generally, it’s more expensive all around regardless of how you look at it, and the country isn’t growing enough economically to support that behaviour. People are waiting to see if the government is able to offer incentives towards rearing children.”
The economist added that current government priorities appear focused elsewhere: “In the near term, better incentives are being offered towards promoting immigration into the country rather than promoting childbirth, to be honest.”
sheriabrathwaite@barbadostoday.bb
