Don’t forget the middle class – economist

THE SWELLING INFLATION with which our country is grappling can throw the emerging middle class into a downward spiral and they must not be overlooked, even as help is given to the most vulnerable in society.

Warning that the middle class persons’ better-off financial positions could cause their plight to be forgotten as policies of relief are mapped out, financial economist Professor Justin Robinson said such an approach will not be in the best interest of the society.

Robinson, who is also Pro Vice Chancellor of the University of the West Indies was speaking on June 28 at at Frenches House at a public discussion on Inflation in St Vincent and the Grenadines, where along with former Minister of Health Luke Browne, he shared valuable information and fielded questions on the issue.

Robinson explained that many times middle income families are locked into long term loans and education bills, which make even a ten per cent increase in spending very difficult for them to manoeuvre because it is not an issue of changing spending habits or such like.

He also noted that the wider, often unspoken aspect of middle class persons is that they “are the stable person in their families… they are the ones who made it”. He said this means that their success is usually tied to helping relatives who are not doing as well and giving temporary relief to such persons.

Meanwhile, Browne, who is also an economist said, in response to a question from the audience about salary increases as a response to inflation,that he knows the issue of minimum wage increases “is under active consideration” by government because some wages are really out dated.

There was however a caution that raising salaries across the board as a response to inflation can in turn plunge the economy into further inflation and prolong it because when the situation normalizes, the increased salaries will still exist, carrying up the cost of production of goods and services.

Professor Robinson noted that the cost of labour is part of producing so a general increase in salaries will be like adding fuel to the fire, but a targeted salary increase policy could have the desired effect of helping the most vulnerable.