Income inequality persists in Jamaica, with Haiti doing better

The Planning Institute of Jamaica (PIOJ) indicates that Jamaica is lagging behind in the achievement of sustainable development goal 10 which calls for reducing income and social inequalities in the island.

SDG 10, the PIOJ outlines, calls for a reduction in inequalities by 2030, recognizing differentials in education, health, housing and social protection, as well as access to justice and information.

The Sustainable Development Goals (SDGs), also known as the Global Goals, were adopted by the United Nations in 2015 as a universal call to action to end poverty.

The Planning Institute’s review for the period 2018-2022 summarises key achievements, issues and challenges concerning inequality. The overview disclosed the categorization of the population into poorest to richest quintiles and deciles for comparison and analysis.

In 2019, the Institute said, “some 50.6 per cent of national consumption expenditure was expended by individuals in the richest 20.0 per cent of the population compared with 5.2 per cent by those belonging to the poorest 20.0 per cent.”

Additionally, it was noted, the richest 10.0 per cent of individuals registered an average consumption expenditure of almost 11 times that of the poorest 10.0 per cent.

In 2014 Dr. Trevor Munroe, then the executive director of National Integrity Action, in a local publication asserted that the income gap between the top and bottom wage earners was getting wider in Jamaica, based on data published by the IMF.

Jamaica, he said, “ has a higher level of income inequality than Haiti and every other country in this hemisphere, excepting Suriname,” quoting 2013 data from reports on banks where executives were paid $4.5m per week, while the average weekly earnings of wage earners in the financial services was approximately $12,000 per week; a difference $4.488m or a multiple difference of 375 times.

In 2020 the University of Michigan published the work of Monique D.A. Kelly, Sociologist entitled "Examining Race in Jamaica: How Racial Category and Skin Color Structure Social Inequality in the journal Race and Social Problems.”

She asserted that inequality is “substantial and widely evident in Jamaica with 20 percent of people living below the poverty line and 10 percent of the population holding 3/5 of the nation's wealth. “

Reviewing data from 2014, Dr. Kelly found that in comparison to Blacks, people who self-identified as racially "other" had 48 percent more household amenities. Further, those with darker skin had fewer household amenities than their lighter-skinned counterparts.

Dr. Kelly found that racial categories showed no difference in education, however skin color was "negatively and significantly associated with educational attainment." On average, those with lighter skin color received two more years of education than their counterparts with darker skin.”

In 2019, Dr. Lauren Marsh, a Research Fellow at the University of the West Indies and an industrial relations specialist published locally a review on what a living wage could be for Jamaicans noting, “A living wage is one that provides a culturally acceptable standard of living for an employed person (and his/her dependents) within normal working hours usually from one income source.”

The minimum wage is the wage floor at which employers should compensate workers. However, Marsh noted, it is often considered insufficient to meet the cost of living for low-wage earners.

Marsh stated, “The need for a living wage is … substantiated by the fact that lower-level workers who are minimum-wage earners may slip below the poverty line, causing additional pressure on government-funded welfare programmes.”

The PIOJ in its review of progress under SDG 10 concluded that while there has been some progress through taxation and social assistance measures, “increasing the spending capacities of the poorest has not yet been adequately addressed.”

Experts from the Oxford Poverty and Human Development Initiative (OPHI) were engaged to provide technical assistance with work to have been completed at year end 2022.

Photograph credits: Corporatefinanceinstitute.com

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