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Is it realistic that any country can thrive and develop without its middle class (or, stated another way, without a vibrant middle class population segment)? Jamaica's disappearing middle class has been evident since the mid-1970s, and this is a similarity in trait that we seem, on the surface, to share with that other CARICOM nation experiencing a similar large scale migration and similar large scale devaluation of its dollar in the past, the Republic of Guyana. Nevertheless, this similarity is not necessarily an accurate one as Guyana's middle class of East Indians (supporters of the semingly racist, ruling PPP party) are largely still living in that poor South American country. Guyana's poor and middle class Blacks, the minority (in numbers) of the two races, are primarily the ones migrating.
The disappearing middle class
Henley Morgan
Wednesday, June 03, 2009
It may be melodramatic to compare the plight of the Jamaican middle class to that of unfortunate human cargo transported across the Middle Passage during the time of the African slave trade, but who can deny that there are some similarities?
From about 1518 to the mid-19th century, millions of men, women and children made the 21- to 90-day forced voyage in overcrowded ships from the West Coast of Africa to the so-called New World. It is estimated that up to 13 per cent of those who set sail never made it to the final destination as disease, starvation, melancholy, being kept in confined quarters, cruelty of those in charge of the slavers and mutiny took their toll. The longest and hardest part of the journey was the Middle Passage, the crossing of the Atlantic Ocean. Recorded reports tell of huge schools of sharks following the ships to feed on human flesh as dead bodies were dumped hourly into the murky and treacherous waters.
The past 20 to 30 years have been like the Middle Passage for the Jamaican middle class. Once a growing and increasingly prosperous group aspiring to migrate from the shanty towns along the Spanish Town Road corridor to new communities such as Mona Heights, Harbour View, Pembroke Hall, Meadowbrook and Havendale, the ranks of the middle class have been decimated by inept government policy and resulting migration; not a more prosperous life uptown, but to foreign. What exists as the middle class today is a thin veneer of humanity sandwiched between the hordes of poor and the few rich.
Continuation in the trend of a disappearing middle class is guaranteed by the current national budget. Writing in a recent edition of the Sunday Gleaner, Gareth Manning provides the evidence: "Many middle-income earners can expect their take-home pay to decrease by at least 15.2 per cent, although government has raised the tax from earnings of pay-as-you-earn (PAYE) workers." In his opening of the Budget Debate in Parliament two weeks ago, Minister of Finance Audley Shaw announced that previously tax-free benefits would soon attract a tax equal to the current income tax rate of 25 per cent. This, he said, would simplify income tax collection and yield $1.2 billion in revenue for the government.
But according to tax specialist Ethlyn Norton-Coke, people earning a gross income of $1 million per annum can expect to fork out nearly $95,000 more per annum when accommodation allowance begins to attract the income tax rate of 25 per cent on July 1.
If there is one thing that the rapid ascent of foreign exchange investment clubs (before the eventual crash) tells us, it is the degree to which the middle class has been trampled by the economic policies of successive governments. The mad rush by people to get into the schemes reflected what Chilean development specialist and author Manfred Max-Neef dubbed "the crisis of utopia". The schemes had their early success in the fact that a significant number of our people are "losing the capacity to dream", of ever achieving a prosperous life through productive work or by other conventional means.
What are people, whose lifestyle and very existence are at risk in a stultifying no-growth environment, supposed to do? Many will stand their ground and slug it out; working themselves to the bone but knowing that they will never get beyond hand-to-mouth existence. Others will seek a route to escape the suffering. For some the escape is through emigration; for others through corruption and crime; and for others still, through involvement in risky ventures.
I have a theory that explains in part the high-risk investment behaviour of ordinary Jamaicans who fall prey to assorted and varied scams. When people suffer serious deprivation of life's necessities over protracted periods, they develop pathologies that cause them to look for help from sources they would not ordinarily turn to, and to take risks no rational person would.
With the middle-income earner again being put under severe pressure, it won't be long before another set of sharks like those from the foreign exchange trading era show up ready to devour the unsuspecting. As it was with the Middle Passage so it is with the middle class. It is the sharks that benefit.
hmorgan@cwjamaica.com
The disappearing middle class
Henley Morgan
Wednesday, June 03, 2009
It may be melodramatic to compare the plight of the Jamaican middle class to that of unfortunate human cargo transported across the Middle Passage during the time of the African slave trade, but who can deny that there are some similarities?
From about 1518 to the mid-19th century, millions of men, women and children made the 21- to 90-day forced voyage in overcrowded ships from the West Coast of Africa to the so-called New World. It is estimated that up to 13 per cent of those who set sail never made it to the final destination as disease, starvation, melancholy, being kept in confined quarters, cruelty of those in charge of the slavers and mutiny took their toll. The longest and hardest part of the journey was the Middle Passage, the crossing of the Atlantic Ocean. Recorded reports tell of huge schools of sharks following the ships to feed on human flesh as dead bodies were dumped hourly into the murky and treacherous waters.
The past 20 to 30 years have been like the Middle Passage for the Jamaican middle class. Once a growing and increasingly prosperous group aspiring to migrate from the shanty towns along the Spanish Town Road corridor to new communities such as Mona Heights, Harbour View, Pembroke Hall, Meadowbrook and Havendale, the ranks of the middle class have been decimated by inept government policy and resulting migration; not a more prosperous life uptown, but to foreign. What exists as the middle class today is a thin veneer of humanity sandwiched between the hordes of poor and the few rich.
Continuation in the trend of a disappearing middle class is guaranteed by the current national budget. Writing in a recent edition of the Sunday Gleaner, Gareth Manning provides the evidence: "Many middle-income earners can expect their take-home pay to decrease by at least 15.2 per cent, although government has raised the tax from earnings of pay-as-you-earn (PAYE) workers." In his opening of the Budget Debate in Parliament two weeks ago, Minister of Finance Audley Shaw announced that previously tax-free benefits would soon attract a tax equal to the current income tax rate of 25 per cent. This, he said, would simplify income tax collection and yield $1.2 billion in revenue for the government.
But according to tax specialist Ethlyn Norton-Coke, people earning a gross income of $1 million per annum can expect to fork out nearly $95,000 more per annum when accommodation allowance begins to attract the income tax rate of 25 per cent on July 1.
If there is one thing that the rapid ascent of foreign exchange investment clubs (before the eventual crash) tells us, it is the degree to which the middle class has been trampled by the economic policies of successive governments. The mad rush by people to get into the schemes reflected what Chilean development specialist and author Manfred Max-Neef dubbed "the crisis of utopia". The schemes had their early success in the fact that a significant number of our people are "losing the capacity to dream", of ever achieving a prosperous life through productive work or by other conventional means.
What are people, whose lifestyle and very existence are at risk in a stultifying no-growth environment, supposed to do? Many will stand their ground and slug it out; working themselves to the bone but knowing that they will never get beyond hand-to-mouth existence. Others will seek a route to escape the suffering. For some the escape is through emigration; for others through corruption and crime; and for others still, through involvement in risky ventures.
I have a theory that explains in part the high-risk investment behaviour of ordinary Jamaicans who fall prey to assorted and varied scams. When people suffer serious deprivation of life's necessities over protracted periods, they develop pathologies that cause them to look for help from sources they would not ordinarily turn to, and to take risks no rational person would.
With the middle-income earner again being put under severe pressure, it won't be long before another set of sharks like those from the foreign exchange trading era show up ready to devour the unsuspecting. As it was with the Middle Passage so it is with the middle class. It is the sharks that benefit.
hmorgan@cwjamaica.com
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