Mon | Dec 11, 2017

Poverty climbed back to 21% in 2015

Published:Sunday | October 8, 2017 | 12:00 AMMcPherse Thompson
In this 2012 Gleaner file photo, an old man begs by the roadside. Jamaica’s poverty rate rose in 2015, the most recent period surveyed by STATIN, according to a newly released report.

The prevalence of poverty in Jamaica, at 21.2 per cent, has reached its second-highest level in almost two decades, according to the 2015 survey of living conditions, the latest such study conducted by the Statistical Institute of Jamaica (STATIN).

The poverty rate was estimated at 20 per cent in the previous survey in 2014 and is second only to the 24.6 per cent recorded in 2013.

It means that about 593,600 persons among Jamaica's 2.8 million population have been classified as being at the poverty line based on household consumption expenditure.

According to the survey tabled in Parliament at the end of September, Jamaica's adult equivalent poverty line increased by 3.7 per cent to $175,297. That increase represents the increased cost of maintaining a minimum standard of living and is the smallest increase since the beginning of nationally measured poverty rates in Jamaica.

The report said that that increase was due to the level of inflation in 2015, which was the lowest recorded since 1967. For the reference family of five, the adult equivalency poverty line was $662,530.

The authors of the report point out that while the 3.7 per cent increase is equivalent to the 3.7 per cent rate of inflation published by STATIN in 2015, the rate of inflation used to inflate the poverty line is usually different due to a difference in calculation.

Unlike the rate published by STATIN, the one used to inflate the poverty line is calculated as the per cent difference between the 2014 and 2015 consumer price index weighted for the month in which the survey is conducted.

According to the survey report, while the data showed a decline in poverty in urban areas, there was a 3.6 percentage point increase in rural areas.

The 2007 poverty prevalence, at 9.9 per cent, was the lowest ever recorded over the series of the survey of living conditions, with households also having, in that year, the highest per capita consumption of goods and services.

The Planning Institute of Jamaica, which analysed the data, noted that after 2007 and coinciding with the start of the global financial crisis, poverty increased every year, eventually reaching 24.6 per cent in 2013, the highest since 1996.

The post-2007 trend of increases in the prevalence of poverty was seen in all regions of the country.

Between 2012 and 2013, poverty fell in the Kingston Metropolitan Area and marked the beginning of a trend of decline, which continued up to 2015, falling by more than five percentage points.

In rural areas, the prevalence of poverty increased by 10 percentage points between 2012 and 2013, the biggest one-year change in any region in the 10-year period between 2006 and 2015.

Poverty in rural areas fell in 2014 before rising again in 2015. Since 2007, rural areas have registered the largest increase in the proportion of people who were poor, 13.7 per cent, with the proportion increasing by 10.7 percentage points in other towns, and 8.1 percentage points in the Kingston Metropolitan Area.

 

POVERTY GAP INDEX

 

The poverty gap index, which is used to measure the depth of penury, was recorded at 5.6 per cent of the poverty line, the same as in 2014.

The study also found that while there was an increase in consumption expenditure in each region and socio-economic group, examination of the GINI coefficient showed that the increase was in favour of the persons in the upper quintiles as inequality increased in 2015 after it fell in 2014. That continued a general trend of increase observed in inequality since 2007.

The report noted that the increase in the poverty rate in 2015 signifies that the increase in consumption expenditure may not have been sufficient to bring persons above the poverty line.

The survey found that poverty was higher among younger persons and female-headed households and lower among those in the older age groups.

Although the overall poverty rate has had mixed movements since 2013, the proportion of those in extreme or food poverty, as well as the vulnerable, that is, those persons whose consumption expenditure is within 10 per cent above the poverty line, has declined.

Analysis of the depth and severity of poverty illustrated that the numbers remained similar in 2015 compared with 2014, except for the Kingston Metropolitan Area which had a reduction in its severity.

mcpherse.thompson@gleanerjm.com