Sun | May 28, 2017

George Davis: Putting economics on the plate

Published:Wednesday | July 8, 2015 | 7:00 AM

My grandmother sent me to Miss Sweetie's shop one afternoon after school to buy some items for the day's dinner. As I walked to the shop, I came upon a conversation between Miss Lize (her name must have been shorthand for Elizabeth, but as a boy in the late 1980s I couldn't dare ask a big woman that!) and Miss Edna.

Miss Lize was on her way home from work while Miss Edna, the sister and neighbour of the shopkeeper, was doing her routine evening sweep of her frontyard to confront the mess created by the flowers from the huge poinsettia tree at the front of her property. Miss Lize was a squat woman, with powerful shoulders and a voice that could cause a starapple to drop from the highest branch. Upon my approach I heard her draw breath and prompt the following conversation with Miss Edna:

Lize: "Hedna, gal, yuh nuh hear what a pound fi chicken?"

Edna: "Yes, mah!! Hayt ($8) dallah ah pound!!"

Lize: "Me nuh know how people a go manage inna dis yah country. Yuh can imagine a pay hayt dallah fi a pound a chicken!? Hayt? Jas Christ, man!

Edna: "Me a fi go tap nyam chicken becaw mi caan afford fi buy it again."

That exchange has lived with me for almost two decades and returns as a flashback whenever there's an increase in the price of some popular consumer good or food item. Imagine that Jamaicans, as represented by those two homemakers, could be so shocked and disgusted that the most popular source of protein on the average dinner plate in this country could have been raised to the astronomical price of $8 per pound. Both Edna and Lize would have certainly died again were they alive today in a Jamaican economy in which the price for a pound of chicken is about $200!

Things aren't that bad?

The price for a pound of local chicken back is $148 per pound, while a pound of the imported stuff will set you back $75. Fish back, brought to the national conversation by the opposition leader, Andrew Holness, fetches about $39 per pound.

The current price to put a serving of protein on the plates of most Jamaicans makes a mockery of those who are quick to say that things aren't that bad in the economy, given that inflation for 2014 came in at a record low of four per cent.

Those contracted prophets who appear to be living in a private zone, where income comfortably outstrips the cost of living, give no credence to the critically important factor of purchasing power. The next time you complain about the impact of price increases on your budget and some smart-ass raises the low-inflation argument, ask them to make their point from the perspective of the resilience of each dollar spent on consumer items.

You would be hard-pressed to find another CARICOM state in which purchasing power has eroded more rapidly than Jamaica since the year 2000. In the almost 15 years since the millennium bug failed to bite, the resilience of one Jamaican dollar has been decimated by the toxic mix of a lack of economic growth, depreciation and awful governance.

As a measure of how much weaker my purchasing power has declined, I did a swift calculation of what it would cost me in 2014 to pay for my second-year education at University of Technology for the September term in 2002. According to STATIN, the consumer price index (CPI) in August 2002 was 63.1 points. The CPI in August 2014 was 221 points. In August 2002, I paid $75,000 for my tuition. This is the formula for the calculation:

Average CPI for August 2002 = 63.1

Average CPI for August 2014 = 221

2002 Price x (2014 CPI/2002 CPI) = 2014 Price

$75000 x (221/63.1) = $262,678.00

So the same education I paid $75,000 for in August 2002 would equate to $262,678 if I paid for it in August 2014! That's a stark example of how purchasing power has eroded in this country. In just 12 years!

No wonder so many of us have so many of those moments when we feel like Lize and Edna did.

Selah.

- George Davis is a journalist. Email feedback to columns@gleanerjm.com.