WHAT IS A LIVABLE WAGE IN THE BAHAMAS: UB ANSWERS

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Professor Olivia Saunders one of the authors of the study

( Editor’s Note: This story appeared originally in The Tribune 13 May 2021and is written by Rashad Rolle. See related comment about the reaction from the Bahamas Chamber of Commerce below)

A 2020 study by the Government and Public Policy Institute of University of The Bahamas concluded that a living wage in New Providence and Grand Bahama is $2,625 and $3,550 per month respectively.

The September 30, 2020 study is authored by Lesvie Archer, Olivia Saunders, Bridget Hogg, Vijaya Permual and Brittney Johnson.

 “Our gross living wage estimate for New Providence is 26 percent lower than the Grand Bahama living wage estimate, nearly 200 percent higher than the national minimum wage, 127 percent higher than 2013 poverty line and nearly 75 percent higher than the minimum wage hike proposed by a local union,” the report says.

 “Our living wage estimate for Grand Bahama is nearly 300 percent higher than the living wage, 200 percent higher than the 2013 poverty line and 140 percent higher than the minimum wage hike proposed by a local union.”

The country’s minimum wage is currently $210 a week.

To calculate the living wage, researchers considered costs of an affordable and nutritious diet, house and utility, education, healthcare, transportation, clothing, recreation, emergency and unexpected event funds, savings and investments, among other things.

Their research followed a model laid out by economist Richard Anker who defined a living wage in terms of what the researchers say is its ability to sustain a person’s “physical, emotional, social and cultural needs and that of their family beyond mere subsistence.”

Researchers concluded that the daily cost of food on a “model diet” averages $10 per person in New Providence and $1,150 per month for a nuclear family of four when accounting for free school lunch programmes.

 “The model diet reflects a nutritious diet, local food preferences, low-cost selections, and is calorie sufficient,” they wrote.

In Grand Bahama, the cost of food on a model diet is likewise $13 per day and $1,550 per month for a nuclear family of four.

Researchers concluded that $650 and $900 respectively are the monthly costs for basic but decent housing in New Providence and Grand Bahama. This includes $400 and $700 respectively for rent, and $250 and $200 for utilities like electricity, water and gas.

Non-food and non-housing costs were estimated at $2,200 in New Providence and $2,800 in Grand Bahama. For nuclear families of four, the costs were estimated at $4,000 and $5,750 respectively.

Researchers’ methodological strategy involved fieldwork on New Providence and Grand Bahama, including examining houses and the prices of items in food stores; and secondary data sources like the 2020 University of the Bahamas Housing Registry, 2019 Labour Market Information Newsletter, 2017 Labour Force Report, 2016 Government of the Bahamas Salary Book, etc.

Following Richard Anker’s work, researchers distinguished between a living wage for New Providence and Grand Bahama.

They wrote: “Our decision to estimate separate living wages signifies a sensitivity and respect for each island’s unique socio-economic composition. First, New Providence reflects an urban environment and houses more than 85 percent of the nation’s population…Grand Bahama, on the other hand, reflects more of a suburban jurisdiction, especially when compared to the more rural islands across the Bahamian archipelago. Per the latest Housing Expenditure Survey Report, Grand Bahama is under-represented in the poorest and second highest quintiles and is over-represented in the middle quintiles (quintiles 2,3 and 5). This middle over-representation suggests Grand Bahama island would benefit greatly the implementation of a living wage. This suburban-urban-rural difference is an important distinction as it has implications on each island’s poverty rate, level of employment and cost of living.

 “Cost of living expenses vary across islands due to inter-island transportation expenses. This means that the cost of living on each island is largely influenced by the cost of transporting goods and services therein. As a nation that imports over 90 percent of its food and materials, New Providence island operates as the hub for related warehousing, administrative and distribution activity.

 “New Providence receives bulk import orders, breaks them down and distributes them to the remaining islands, some of which are more than 200 miles away. Transportation costs generated from this distribution process affect the cost of living. For example, on March 11, 2020, the cost of gasoline was estimated at $4.50 on New Providence but $6.50 in the nation’s most southern island of Inagua. Accordingly, the variation in living expenses across all islands of the Bahamas suggests the inadequacy of proposing to calculate a single living wage for low-wage workers across the entire country. Therefore, inspired by the International Labour Organisation’s living wage specialist Richard Anker’s call to respect the differences between urban and rural environments by calculating their living wage estimates separately, this study offers two living wage estimates, one for New Providence and one for Grand Bahama.”