Pe­ter Christo­pher

With the ex­cep­tion of 2022, this coun­try’s econ­o­my has been de­clin­ing con­sis­tent­ly since 2014. As a red­sult of the chal­leng­ing eco­nom­ic con­di­tions most cit­i­zens on fixed in­comes have not ben­e­fit­ed from ma­jor in­creas­es in salaries and with ris­ing in­fla­tion the av­er­age cit­i­zen’s pur­chas­ing pow­er con­tin­ues to de­cline.

It is these chal­leng­ing eco­nom­ic cir­cum­stances that have seen more and more peo­ple slip from what would be con­sid­ered to be the mid­dle class to the work­ing class.

By de­f­i­n­i­tion, the mid­dle class is typ­i­cal­ly con­sid­ered to be in­di­vid­u­als and house­holds who fall be­tween the work­ing class and the up­per class with­in a so­cio-eco­nom­ic struc­ture. Ac­cord­ing to In­vesto­pe­dia, “In West­ern cul­tures, per­sons in the mid­dle class tend to have a high­er pro­por­tion of col­lege de­grees than those in the work­ing class, have more in­come avail­able for con­sump­tion, and may own prop­er­ty. Those in the mid­dle class of­ten are em­ployed as pro­fes­sion­als, man­agers, and civ­il ser­vants.”

Yet there is grow­ing con­cern that many of these pro­fes­sion­als are now falling in­to the work­ing class or the work­ing poor clas­si­fi­ca­tion.

Pro­fes­sor Roger Ho­sein, the se­nior lec­tur­er of eco­nom­ics at the Uni­ver­si­ty of the West In­dies, ex­plained that this could be a re­sult of their in­comes be­ing in­creas­ing­ly stag­nant in the face of con­stant­ly in­creas­ing costs.

“The rapid in­crease in prices in the last three years in the Trinidad and To­ba­go econ­o­my would have cut in­to pur­chas­ing pow­er ca­pac­i­ty of all house­holds that are on a fixed in­come. This means that if a house­hold was for­mer­ly at the bound­ary of a low­er-in­come house­hold and a mid­dle-in­come house­hold, with the rise in prices such a house­hold could now be clas­si­fied as a low­er-in­come house­hold,” he told the Busi­ness Guardian.

Pro­fes­sor Ho­sein con­tin­ued, “The same ap­plies to house­holds at the bound­ary of mid­dle-in­come house­holds and up­per-in­come house­holds, for some of those house­holds at the bound­ary the rise in prices would have turned the rel­e­vant house­hold in­to the mid­dle-in­come group.”

Pro­fes­sor Ho­sein said that even the sug­gest­ed of­fers be­ing sub­mit­ted to unions would do lit­tle to abate this, as the price in­creas­es had long sur­passed the per­cent­ages placed on the ne­go­ti­at­ing ta­bles.

He ex­plained, “Be­cause wages, in many cat­e­gories, are on­ly ear­marked to in­crease by on­ly four per cent and the rise in prices in the last five years has been con­sid­er­ably high­er than four per cent it means that all house­holds would have ex­pe­ri­enced a de­cline in re­al in­come. In or­der to ad­dress this there would be a need to prop­er­ly in­crease nom­i­nal wages to com­pen­sate house­holds for the loss of in­come as­so­ci­at­ed with the in­crease in price lev­els.”

This con­cern about the di­min­ish­ing size of the mid­dle class in the face of ris­ing prices and lim­it­ed wage in­creas­es was ex­pressed by Pub­lic Ser­vice As­so­ci­a­tion Pres­i­dent Leroy Bap­tiste, who ar­gued in May that the pro­longed de­lay in im­prov­ing the salaries of pub­lic ser­vants had erod­ed the mid­dle class of the coun­try.

He said then the pub­lic ser­vice could be cat­e­go­rized as the “work­ing poor” af­ter al­most a decade of no salary in­creas­es cou­pled with high in­fla­tion.

Pro­fes­sor Ho­sein ex­plained that the price in­creas­es were not the on­ly fac­tor im­pact­ing the mid­dle-in­come group, as he not­ed that the crime sit­u­a­tion had al­so lim­it­ed their po­ten­tial to in­crease pro­duc­tiv­i­ty and raise them­selves out of this sit­u­a­tion.

He ex­plained, “What the coun­try needs is a rapid in­crease in out­put per work­er. This re­quires an im­por­tant strate­gic in­ter­ven­tion by the gov­ern­ment in the rel­e­vant places. But it al­so re­quires the gov­ern­ment to con­trol crime. In par­tic­u­lar, it is very dif­fi­cult to see how pro­duc­tiv­i­ty could in­crease with a mur­der lev­el stand­ing at 535 as we speak to­day and drift­ing to­wards an over­all 640 num­ber for 2022.”

The Uni­ver­si­ty Lec­tur­er said the onus was on the Gov­ern­ment to ad­dress that con­cern so that there could be greater em­pha­sis on ef­fi­cient out­put.

He rec­om­mend­ed gov­ern­ment that to in­crease pro­duc­tiv­i­ty it would need to con­trol the crime sit­u­a­tion.

“Peo­ple must not have to spend a sig­nif­i­cant por­tion of their day look­ing over their shoul­ders. They must not have to di­vert re­sources away from ac­tive di­rect in­vest­ment to­wards se­cu­ri­ty per­son­nel or to­ward bur­glar proof­ing and oth­er se­cu­ri­ty ap­pa­ra­tus,” said Pro­fes­sor Ho­sein, “The coun­try is in a very very try­ing po­si­tion and we have to be care­ful that the fall in nom­i­nal wages, the fall in re­al wages on ac­count of the slow growth of nom­i­nal wages in re­la­tion to prices and the rapid­ly es­ca­lat­ing mur­der lev­el does not cre­ate the right set­ting for peo­ple to leave the labour mar­ket be­yond what is al­ready hap­pen­ing.”

Pro­fes­sor Ho­sein how­ev­er ex­plained in his con­ver­sa­tion with the Busi­ness Guardian that it was dif­fi­cult to place an es­ti­mate as to what in­come brack­et would con­sti­tute the mid­dle class or the work­ing class.

“What I would sug­gest, is a deep in­tel­li­gent look at the da­ta. I rec­om­mend that pol­i­cy mak­ers look care­ful­ly at what has hap­pened in econ­o­my since 2015. What has been the im­pact of sev­en con­sec­u­tive years of de­cline on the Trinidad and To­ba­go econ­o­my. In par­tic­u­lar how has it af­fect­ed the dis­tri­b­u­tion of un­em­ploy­ment, the dis­tri­b­u­tion of in­come across dif­fer­ent oc­cu­pa­tion and in­dus­tri­al groups and across ge­o­graph­ic ar­eas,” said Pro­fes­sor Ho­sein, who ex­plained that in the ab­sence of this in­for­ma­tion, it would be dif­fi­cult to adopt the nec­es­sary poli­cies to ad­dress the sit­u­a­tion.

Da­ta Ur­gent­ly Need­ed:

An­oth­er Econ­o­mist, Dr. Mar­lene Attzs sim­i­lar­ly not­ed there was some dif­fi­cul­ty in plac­ing a fin­ger on just where the mid­dle class stood in Trinidad and To­ba­go.

“In Trinidad and To­ba­go we do not have ei­ther cur­rent or such a well-de­fined in­come range for per­sons to be con­sid­ered “mid­dle class”. Gen­er­al­ly, we have a sense of mid­dle class as those per­sons who are not “poor”, who earn month­ly in­comes, and are able to en­joy a “rea­son­able” qual­i­ty of life ev­i­denced per­haps by at least one car, three square meals and, as an add-on, the abil­i­ty to qual­i­fy for a mort­gage and own a prop­er home. In years gone by teach­ers and pub­lic ser­vants would have been among most of those per­sons con­sid­ered “mid­dle class”,” said Dr. Attzs, who how­ev­er felt the ques­tion about the stand­ing of the cur­rent sta­tus of the work­ing class was “in­ter­est­ing and rel­e­vant giv­en that TT is now in “re­cov­ery” mode fol­low­ing the shocks of the last two years.”

She said the shocks in­clude Covid-19 but al­so the Rus­sia/Ukraine war and re­cent­ly the flood­ing that has neg­a­tive­ly im­pact­ed many com­mu­ni­ties is­land-wide.

“Your spe­cif­ic ques­tions on “mid­dle class” re­quire da­ta and clear de­f­i­n­i­tions to sup­port what is a “mid­dle class” and “work­ing poor”.” Dr Attzs told the BG.

She ar­gued that the no­tion of the mid­dle class must be ground­ed in coun­try-spe­cif­ic da­ta and in­for­ma­tion. For ex­am­ple, in the US the Pew Re­search Cen­tre de­fines the mid­dle class [in the US] as house­holds that earn be­tween two-thirds and dou­ble the me­di­an U.S. house­hold in­come, which was $65,000 in 2021, ac­cord­ing to the U.S. Cen­sus Bu­reau. Us­ing Pew’s yard­stick, mid­dle in­come in the US is made up of peo­ple who make be­tween $43,350 and $130,000 an­nu­al­ly.

She al­so felt that con­ver­sa­tion re­quired some as­sess­ment as to who fell in­to the work­ing class or work­ing poor brack­et.

Dr. Attzs added, “The oth­er is­sue that’s rel­e­vant to the con­ver­sa­tion is that among em­ployed per­sons we have those who can be de­scribed as “the work­ing poor” - those per­sons en­gaged in ei­ther paid work or who are self-em­ployed and who be­long to house­holds with an adult equiv­a­lent per capi­ta house­hold ex­pen­di­ture (or in­come) that falls be­low a spec­i­fied pover­ty line. Cur­rent­ly, the na­tion­al min­i­mum wage is set at TT$17.50 per hour or $700 per week equat­ing to $2,800 per month (for a 40-hour work week) or $33,600 per year.”

Tar­get­ed ap­proach will help:

The lim­it­ed da­ta on the mid­dle class has been an on­go­ing con­cern, one which was high­light­ed by In­de­pen­dent Sen­a­tor Am­ri­ta De­onar­ine in an ar­ti­cle ti­tled, “Mid­dle-class T&T, where is the da­ta on us?” post­ed to so­cial me­dia in Feb­ru­ary 2021.

In the ar­ti­cle, she not­ed “in 2014, the per­cent­age of the pop­u­la­tion with such in­come in Trinidad and To­ba­go (size of the mid­dle class) was 51.2% which ac­counts for al­most 700,000 per­sons (when the pop­u­la­tion size was record­ed at 1.362 mil­lion per­sons in 2014 – World Bank). “

That post ex­plored the lim­it­ed da­ta since then was prob­lem­at­ic as it was a ma­jor hin­drance to im­ple­ment­ing eco­nom­ic poli­cies which would en­sure nec­es­sary growth fol­low­ing the im­pact of the pan­dem­ic.

She asked in the post, “How are we mea­sur­ing the re­al im­pact at the house­hold and in­di­vid­ual lev­el of the last 15 years of eco­nom­ic growth/de­cline and the fall­out from the covid-19 pan­dem­ic with­out key mi­cro-da­ta? Lack of clar­i­ty of the de­tails on these so­cial in­di­ca­tors brings to ques­tion the ef­fi­cien­cy of the tar­get­ing mech­a­nism of the ex­ist­ing so­cial safe­ty net to en­sure that the vul­ner­a­ble are ad­e­quate­ly pro­tect­ed in times of cri­sis.”

De­onar­ine con­tin­ued, “Mid­dle-in­come house­holds are a crit­i­cal part of any eco­nom­ic re­cov­ery and need to be pro­tect­ed with rel­e­vant pub­lic pol­i­cy that is em­pir­i­cal­ly sound and tar­get­ed. In the event that we con­tin­u­ous­ly fail to do this, scarce re­sources be­come in­ef­fi­cient­ly al­lo­cat­ed con­tribut­ing to wel­fare loss­es in so­ci­ety, not to men­tion a waste of tax­pay­ers’ mon­ey.”

How­ev­er, this con­cern about the shrink­ing mid­dle class had been ex­pressed long be­fore the pan­dem­ic, nor was Sen­a­tor De­onar­ine the first in­de­pen­dent Sen­a­tor to en­cour­age the gov­ern­ment to fo­cus on the mid­dle-in­come group.

In 2017, In­de­pen­dent Sen­a­tor David Small warned of the shrink­ing mid­dle class in his con­tri­bu­tion to the 2018 bud­get de­bate as he warned that grow­ing in­fla­tion and ris­ing prices had squeezed mem­bers of the pub­lic with a “fi­nite” sup­ply of funds.

The Busi­ness Guardian reached out to the Cen­tral Sta­tis­ti­cal Of­fice in the hope of get­ting a clear­er pic­ture of the var­i­ous in­come brack­ets in Trinidad and To­ba­go.

How­ev­er, the CSO stat­ed it did not have da­ta tab­u­lat­ed in that form and in­stead point­ed to col­lec­tion of da­ta based on month­ly in­come groups which were sep­a­rat­ed in­to four da­ta cat­e­gories; Jobs by Type of work­er, Oc­cu­pa­tion­al Group, Ad­min­is­tra­tive area and In­dus­tri­al group.

Oc­cu­pa­tion­al groups in­clud­ed Leg­is­la­tors, se­nior of­fi­cials and man­agers, Pro­fes­sion­als, Tech­ni­cians and as­so­ciate pro­fes­sion­als, Clerks, Ser­vice work­ers (in­clud­ing de­fence force) and shop sales work­ers, Agri­cul­tur­al, forestry and fish­ery work­ers, Craft and re­lat­ed work­ers, Plant and ma­chine op­er­a­tors and as­sem­blers, El­e­men­tary oc­cu­pa­tions and un­stat­ed oc­cu­pa­tions.

Ac­cord­ing to the 2018 fig­ures, the last year with com­plet­ed da­ta list­ed for me­di­an salaries, the month­ly salaries for these groups ranged from $3500 per month (earned by el­e­men­tary oc­cu­pa­tions) to $10000 (pro­fes­sion­als).

Dr. Attzs agreed that there was a need for da­ta to prop­er­ly as­sess the chal­lenges faced by the var­i­ous eco­nom­ic groups. She how­ev­er not­ed that the gov­ern­ment had an­nounced plans to get this da­ta in 2023.

She said, “The fact is that we do not have cur­rent da­ta on what in­come lev­els de­fine TT’s “mid­dle class”. The House­hold Bud­getary Sur­vey and Sur­vey of Liv­ing Con­di­tions about which the Min­is­ter of Fi­nance spoke in his pre­sen­ta­tion of Bud­get 2023, will hope­ful­ly be com­plet­ed and pro­vide greater clar­i­ty on what in­come lev­els may be as­so­ci­at­ed with the “mid­dle class”. These are im­por­tant da­ta to high­light what is the im­pact of the cur­rent eco­nom­ic cir­cum­stances on qual­i­ty of life.”

She con­tin­ued, “If we ac­cept that the “mid­dle class” are those who earn enough in­come to en­joy a de­cent stan­dard of liv­ing, then it is im­por­tant to know how the shocks of the past two years and the ris­ing cost of liv­ing are im­pact­ing on such per­sons and whether the mid­dle class is in­creas­ing or shrink­ing.”

Dr Attzs said it was im­por­tant to have a healthy mid­dle class, par­tic­u­lar­ly if the goal is to re­vi­talise an econ­o­my fol­low­ing the pan­dem­ic.

She said, “From a de­vel­op­ment per­spec­tive, the ob­jec­tive should be to grow the mid­dle class so that their in­come and ex­pen­di­ture acts as a fil­lip to stim­u­late the econ­o­my - if mid­dle-class fam­i­lies have dif­fi­cul­ty buy­ing goods and ser­vices then there’s a neg­a­tive rip­ple ef­fect through­out the econ­o­my. Not to ex­clude the work­ing poor, it is equal­ly im­por­tant to know how they al­so are far­ing so that the risk of them be­ing pushed in­to pover­ty is mit­i­gat­ed and to al­low the myr­i­ad of so­cial as­sis­tance pro­grammes to be tar­get­ed to those most in need.”

New Bud­getary Sur­vey next year:

The CSO web­site con­firmed plans for the House­hold Bud­getary Sur­vey, stat­ing, “The next HBS is sched­uled to take place in 2023. How­ev­er, for the first time in Trinidad and To­ba­go, The House­hold Bud­get Sur­vey would be com­bined with The Sur­vey of Liv­ing Con­di­tions. The both sur­veys would be merged in or­der to yield bet­ter qual­i­ty ex­pen­di­ture da­ta, while al­so pro­vid­ing de­tailed in­for­ma­tion on health, ed­u­ca­tion, labour and oth­er char­ac­ter­is­tics of liv­ing con­di­tions.”

The last HBS sur­vey was con­duct­ed in 2008/2009. Ac­cord­ing to that sur­vey, the av­er­age month­ly house­hold in­come in Trinidad and To­ba­go in 2008/09 was $9,201.

Next year’s HBS is ex­pect­ed to be con­duct­ed from Jan­u­ary 2023 to De­cem­ber 2023, the CSO web­site stat­ed.