Senior Reporter
andrea.perez-sobers@guardian.co.tt
Two economists are of the view that an accurate and updated value of the poverty line is needed to help the most vulnerable.
Last week, during an inquiry in the Public Administration and Appropriations Committee (PAAC), into how the nation’s poor are impacted by rising prices in the transportation, retail, and energy sectors, it was revealed that the current poverty line by the Ministry of Social Development and Family Services (MSDFS) is $1,439.02 a month.
Deputy Permanent Secretary Wendy Guy-Hernandez said this figure was used when doing their standard means test for people applying for grants in the ministry. However, she admitted, “While this figure is utilised presently, this is not a true reflection of what the poverty line is in the country.”
Economist Dr Vaalmikki Arjoon told the Sunday Business Guardian that the poverty line used by MSDFS $1,439.02 per month is from 2016, and is, as a result, a grossly understated value, especially with the extent of subsequent price increases.
Since 2016, Arjoon indicated that prices increased overall by 21 per cent, with prices of food, health, housing, rent, household furnishings and transportation rising by 41 per cent, 52 per cent, 14 per cent, 9 per cent, 13 per cent and 26 per cent respectively.
To be even more specific, he said to consider food expenses which is a significant component of the poverty line computation, the cost of milk, cheese, and eggs increased by 37.4 per cent, while fish, meat, bread, vegetables, and non-alcoholic drinks all surged by 24 per cent, 29 per cent, 32 per cent, 55 per cent and 44per cent.
“As an import-intensive economy, we can also expect another rise in inflation soon with the increased cost of global transportation and international prices brought on by supply chain issues due to disturbances to trade at the Suez Canal. This is causing delays in the manufacturing and delivery of essential items like medication, which will push up prices, thereby compounding poverty levels locally,” Arjoon stressed.
He highlighted the magnitude of such price increases above, suggesting that the poverty line is pragmatically at least $3,800 to $4,000 for a household of three persons and even this is a highly conservative estimate.
“An accurate number of people below this line may also be elusive given the thriving black market/underground economy that goes unaccounted for, with many unregistered workers being paid at unsatisfactory levels far below minimum wage.”
“Much of the migrant population constitutes part of these unregistered workers below the poverty line. Unregistered businesses are also culpable as they also don’t pay their fair share of taxes, so there is less available for the State to spend on combating poverty,” the economist detailed.
Arjoon further stated poverty tends to perpetuate across generations, as children born into impoverished families face systemic barriers to upward economic mobility which can hinder their ability to escape poverty, leading to a cycle of inter-generational poverty.
However, he disclosed the last official poverty line produced by the Central Statistical Office (CSO) was in 2005 at $655 – the 2016 figure of $1,439.02 used by the MSDFS is an improvised value, while the last official estimate of the poverty rate was 20 per cent in 2014.
“Naturally, this would have worsened since then given that the economy subsequently declined by over 20.4 per cent,” said Arjoon.
He added that the poverty line also highlights the degree of inequality locally, which is substantial in T&T – the top 10 per cent of income earners account for 52 per cent of citizens’ income.
Also shedding light on this issue was economist Dr Marlene Attzs who explained how the poverty line affects the economy.
She said labour force participation and human capital development, economic growth and social costs depend on an up-to-date assessment of the poverty line..
Asked if the Government is doing enough to address the poverty line, Attzs noted while there are social programmes, it would be helpful to have performance metrics that speak to the impact of those programmes, not simply the amount of money being spent, but whether there is a measurable change in the poverty landscape (a decline) in T&T.
“We also need to get the data to support targeted interventions to build resilience among our vulnerable populations. The resilience building would include developmental programmes that support the financial contribution from the Government.”
“In my view, data from the Household Budget Survey (HBS) and Survey of Living Conditions (SLC) should undergird any policy decisions that impact the lives of citizens of T&T. These are important data sets so that we can see how we are progressing from a development perspective,” she mentioned.
In terms of recommendations to address poverty in light of inflation and other negative economic factors, the economist said accurate data from the HBS and SLC can support targeted government interventions concerning poverty measures. The data can also provide a basis for negotiations including conversations around what constitutes a decent minimum wage or how wage increases are determined.
She also said with COVID-19, many children were unable to make that transition to online classes.
“A story carried in the Trinidad Guardian last year reported, “At least 151 primary school pupils dropped out of government schools in Trinidad between the beginning of 2020 and the end of 2022, while another 2,663 students dropped out of government secondary schools during the same period–a figure of 2,814”.
Attzs stated that some children did not regularly attend online classes during the pandemic because one or two mobile devices or tablets in the home had multiple uses.
“Then there was the cost of putting data on the mobile devices for regular phone use but also to facilitate schoolwork. Data from these COVID-induced experiences should have been captured and ought to find their way into updated measures of poverty. Additionally, the following are some other post-COVID experiences that should add to the already multidimensional measurements of poverty,” she said.
Government employment
Concerning government employment programmes such as Community-Based Environmental Protection and Enhancement Programme (CEPEP), Attzs noted that she was not aware if any socio-economic impact assessment of the programme had been undertaken and if so, what are the results.
She outlined that CEPEP was originally envisaged as an important start-up vehicle to employ at the community level but equally important is to ensure the programme is structured to raise persons out of poverty.
“While a “Cepepper” as the late Pat Bishop referred to them, may work until 10 or 11 am, at the end of their workday they should then be contractually obligated to go off and learn a developmental skill for another hour or two so that eventually they can graduate out of the CEPEP programme, and the original circumstances that qualified them for employment in the CEPEP programme that is, “unskilled and semi-skilled” would have improved.”
“Such an approach allows CEPEP to contribute to that individual’s personal development and that of their household and community. And at the national level the programme would contribute to changing economic opportunities for underprivileged citizens.” the economist added.