By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

THE number of households reporting an income below the minimum wage in April nearly trebled, according to an Inter-American Development Bank (IADB) report.

The report, titled “COVID-19-The Caribbean Crisis”, said that 72.5 percent of households out of 910 surveyed said that they had reported income loss in April and the percentage of households that reported income below the minimum wage increased by 195.6 percent from 16.1 percent to 47.6 percent.

There are three main factors that contributed to this increase, the bank said. The first was significant business closure, either by force from the competent authority or due to lack of demand. Secondly, out of those surveyed, 75.1 percent indicated at least one job loss in their household. Lastly, people reported they had stopped receiving rent payments from real estate or vehicles.

The report also said the loss of employment impacted 80.6 percent of low income households, or households that reported earnings below the minimum wage as of January. Middle income and high income households showed a 50.2 percent and 35.1 percent loss in employment respectively.

Conversely, the International Labour Organisation in a report said sustainable solutions are urgently needed to address the collapse of Caribbean tourism employment. They said the COVID-19 crisis has impacted employment, but the actual magnitude is still uncertain. Surveys indicate 71 per cent of hotels had laid off staff by April as a way to address the revenue shortfall; some 66 percent had also reduced the work week or hours worked; and 53 percent had cut salaries. The Caribbean Tourism Organization has produced a preliminary projection of a 50 per cent reduction in tourist arrivals for 2020.

The report added that only 37.9 percent of households indicated they had enough savings to cover an unexpected expense. They said: “Households that reported higher total household income in January 2020 were more prepared to cover immediate expenses. Only 1.9 percent of low-income households (those earning below the minimum wage) reported having enough savings for an emergency expense, whilst 29.9 percent reported having enough savings to cover one week or more of basic expenses.”

Despite the lack of savings along with the significant job losses and business closures, only 22.2 percent of households requested a loan, remittance or cash transfer from a family member of friend, this being higher in low-income households. However, only 46.3 percent of low-income households benefitted from the various social assistance programmes implemented by the government in response to the COVID-19 pandemic including the social services monthly food vouchers and the National Insurance Board unemployment benefits scheme.