BYE BYE, MIDDLE CLASS

TRINIDAD and Tobago’s middle class is in its most decimated state in 40 years. 

Mid-income professionals and entrepreneurs have been hollowed out by the shutdown of 6,000 small and medium-sized enterprises (SMEs) during the Covid-19 crisis, the closure of Petrotrin and Point Lisas plants, and the corresponding failure of petro servicing companies. 

The collapse of the middle class has also been induced by high joblessness, estimated at 150,000 workers, which has impacted the purchasing power of goods and services. 

Consumers’ buying power has declined by 20 per cent over the past five years. 

The middle class has also collapsed under the weight of stalled economic sectors, including construction, steep bank charges, and the crime calamity, which has led to a fear of investing and to financial outlays for security measures. 

Inequitable distribution of foreign exchange, repeated increases in fuel prices, higher motor vehicle taxes, and falling real estate prices have also influenced the current state. 

Many nationals are seeing trouble in paying mortgages and servicing other major loans, and are unable to afford vehicles, vacations and other leisure activities, and various accustomed lifestyle facilities. 

There is a surge in the number of people who are seeking to migrate, according to anecdotal evidence. 

The declining national economy and the crime scourge have led to renewed interest in leaving a troubled T&T, with many parents first moving to send their children abroad for education and generally improved welfare. 

The only comparative period in post-independence T&T was during the crumbling of the economy in the mid-1980s, which triggered the collapse of the PNM Government for the first time in national history. 

With the contraction of the economy in successive years, the A.N.R. Robinson administration introduced austerity measures, including the removal of the cost of living allowance for public officers. 

Scores of people – including an entire Penal village – applied to Canada for refugee status, claiming they were being victimised. 

There was a brain drain of successful nationals.  

There have been no recent surveys, but the middle class was estimated in 2014 at just over 50 per cent of the national population. 

The middle class is responsible for a significant amount of purchases, SME investments, and savings. 

That community also creates professionals and other high-achieving nationals who develop their skills and often become entrepreneurs. 

Experts say a thriving middle class is a crucial engine of national development, and their consumption spurs business activities in various sectors and creates jobs. 

The decline of the middle class has swollen the ranks of the working masses, many of whom are struggling to make ends meet, with the growing cost of living and steep unemployment. 

The absence of policies to boost agricultural production has left food production stagnant at a time of global shortages. 

Trinidad and Tobago imports $6 billion in food each year. 

The cultural and creative sectors have also not advanced post-Covid, as has taken place in other countries. 

International travel advisories on crime have adversely affected Tobago’s tourism sector.  

The gap between rich and richer is likely to widen with the impending re-introduction of property tax, and increased water and electricity charges.  

There has been a rise in destitution and the number of people publicly begging alms or seeking social welfare support at government agencies. 

The economic inequality is even more graphic because business corporations and other large businesses have been reporting increased profits in recent months. 

The country’s major conglomerates, which collectively own more than 200 goods and services firms, have each recorded higher earnings in their latest audited financial reports. 

Commercial banks have also registered better performances, with two institutions crashing the billion-dollar profit barrier. 

There are several business monopolies, including in the sale of all-important pharmaceuticals, which mean that such operators could unilaterally jack up retail prices. 

While small businesses have been folding up, certain large enterprises have made strategic expansions. 

The falling off of the middle class is likely to have a long-term impact on the unemployment rate, cost of living, and overall quality of life. 

In some societies, income inequality has sparked social instability. 

The International Monetary Fund and other global institutions have warned that such circumstances could lead to social unrest. 

The European Union called for financial benefits from the Russian-Ukrainian conflict to be shared among the people. 

Other commentators have urged that there be specific measures to assist those impacted by recession, inflation, and other economic problems. 

In T&T, there have been no policies to halt and reverse the growing gap between the rich and poor.