Price hikes pounding pockets of poor – experts
Published:Wednesday | February 2, 2022 | 12:12 AMEdmond Campbell/Senior Staff Reporter
Current hikes in the price of basic foods, fuel and electricity costs are having a “devastating” impact on the poor and low-income earners, University of the West Indies (UWI) lecturer and economist Peter-John Gordon has said.
The escalations come as the Minimum Wage Commission has submitted its latest review to the Ministry of Labour. Permanent Secretary Colette Roberts-Risden told The Gleaner on Monday that Labour Minister Karl Samuda will be presenting the review to Cabinet for consideration.
Bakery flour cost has increased by six per cent on Monday, while the price of chicken was set to move up by 10 per cent late January.
The National Water Commission (NWC) has signalled that there would be a 4.07 percentage-point increase in the Price Adjustment Mechanism rate to be applied to customers this month.
The inflation out-turn for the calendar year 2021, according to the Statistical Institute of Jamaica (STATIN), was 9.1 per cent.
Head of the Jamaica Confederation of Trade Unions, Helene Davis Whyte, said that most workers have complained that they were finding it very difficult to meet their daily expenses, particularly in relation to food, transportation, and utilities.
“A lot of people are now considering if chicken meat can be their main source of protein anymore because it has really gone out of the reach of a lot of minimum wage earners,” she said.
“Many have resorted to necks and backs and whatever other parts of the chicken they may be able to afford,” Davis Whyte added.
The trade union leader conceded that most price increases appeared to be linked to global supply-chain problems.
Commenting on the deleterious effect of inflation, especially on the jobless and minimum wage earners, Gordon explained that as prices go up, it’s equivalent to salaries going down.
The economist cautioned that the inflation figures that are published represent some kind of average of the basket that is assessed by STATIN.
Gordon said that low-income people might be purchasing different goods, so the real inflation rate for some might not be reflected in the national average.
He also noted that when the minimum wage is adjusted, it only has an impact on those who are employed. The UWI lecturer argued that people who were employed informally would not benefit from an adjustment in the minimum wage.
“If you are not employed, you have no benefit to get from an increase, and this is the thing that is so devastating about inflation; it affects everybody, whether you are working or not working,” he insisted.
Gordon said that as the Government prepares to table its 2022-2023 Budget, the impact of inflation on the poor should be on their minds.
He conceded that it was a difficult problem to deal with, noting that price control was not an option.
“No doubt they will be looking on a host of different things. What can they do with PATH (Programme of the Advancement Through Health and Education) … ? What kind of subsidies, if any they can give, and how long can they can be given, because they can’t give subsidies in perpetuity?”
He said that the consumer could get some relief if the Government incentivises imports by adjusting duties. That would cut prices for consumers but potentially harm local jobs.
On the question of minimum wage, Davis Whyte said that the unions have for some time been lobbying the Government, without success, to explore a livable wage.
The current minimum wage is $7,000 a week.
The union leader said she was baffled at how a family earning at that rate could afford accommodation and food.