Mark Wignall | How long can your pay last?
In spite of the present levels of unprecedented dysfunctions in the US presidency, the Cabinet and the GOP Senate, the economy continues to operate at near full employment. In the world's largest economy it has to be considered a supreme irony that in some quarters it is estimated that as high as 76 per cent of households operate from pay cheque to pay cheque.
The partial shutdown of the government has brought into relief that delicate socio-economic balancing act. In Jamaica, it is quite easy to suggest that probably 90 per cent of our households fall into that month-to-month balancing act. That would comprise teachers, the police, soldiers, junior doctors, administrative support staff, nurses, warders, firemen, low-level civil servants and those precariously existing on the fringes of the informal economy.
What this means is, if one pay cheque is withheld or lost to unemployment (2017 level 11.7 per cent) the household is immediately plunged into a crisis where must-have funds for personal care, food and grocery items and children's welfare automatically go missing.
Add to that the social inequity gap and Jamaica falls into its many parts where it seems those at the broad base of the society are forced to derive creative ways to reproduce themselves. No place is this more stark than what is shown in the bank deposit rate vs the prevailing lending rate.
Wealthy folks with funds to invest in the very healthy Jamaican stock market know that the bull run will continue as long as the average commercial bank deposit rate is 1.54 per cent and lending rate is 14.82 per cent. Those banking at the smallest end simply use the banks as temporary spots to park their small deposits until a partner draw or round robin is generated to produce funds for household improvement.
Those most at risk from these month-to-month shocks are younger folks who would have struck out on their own in the last 10 years. Even if they have built up a moderate nest egg towards housing acquisition, most of the arrangement is very obviously centred around regular supplies of monthly cheques. With rental in some instances hitting as high as in excess of 25 per cent, very few of those households can afford any employment upheavals.
Years ago, a police constable friend of mine said to me, "I like Chinese food so as a get mi pay, me and my girl head to a Chinese restaurant. Anything happens after that I can always say I ate a meal that I love even once for the month out of my pay."
I know two young people living together and they have a six- year-old son. She was a stay-at-home mom and he worked someplace close to the docks. Then the month came when he was laid off. Three months went by and JPS disconnected their power. Lucky for them, a kind neighbour ran a long extension cord and gave them temporary assistance.
While the father was struggling in trying to find employment, the mom found a weekly helper's job. It was then the father's duty to get the child off to school and arrange pickup. A few months after his woman began to work, he picked up a security guard work.
It is still tough for the two adults and the child and, like a lot of working folk, they cannot afford to have another disconnection from employment or even one month's pay cheque absent.
One of the guarantees in government work is the difficulty in losing it and the main spin-offs in hustling. Many of those in the private sector have no such luck.