Caribbean L 18 ife, July 10-16, 2020
CARIBBEAN ROUNDUP
Trinidad
The Development Bank of Latin
American known as CAF recently
announced that it
had signed two loans
totaling US $150 million
with Trinidad and
Tobago to respond to
the health emergency
caused by COVID-19 and to mitigate
the economic financial and social
effects of the pandemic in the country
.T
he first loan, for US $100 million,
will provide financial support to the
Government’s economic programs,
implemented to contain the social,
economic and financial emergencies
generated by Covid-19 and aims to
have a counter-cyclical impact on the
country’s economy.
The second loan, for US $50 million,
will contribute to strengthening T&T’s
health system capacity to respond to
the crisis caused by COVID-19, through
direct financial resources and the recognition
of expenses and investments
aimed at reducing the risk of mitigating
the impact of the pandemic on the
health of the population.
These two loans were preceded by a
US$400,000 donation that the multilateral
organization made to T&T on
April 3, to help in the fight against the
spread of the pandemic.
— Compiled by Azad Ali
Continued from Page 4
Labor income inequalities
Three-fourths of the post-Second
World War (WW2) decline in the labour
share of GDP (i.e., paid as wages, salaries
or employment benefits) has happened
since 2000, after little change in the second
half of the 20th century!
Overall US labour share of nonfarm
business income fell from 65.4% of GDP
in 1947-50 to 61.1% in 1994-98, before
rising to 63.3% in 2000, and falling
thereafter. After recovering from a nadir
of 52.4% in 2013 to around 57% during
Obama’s second term, labour’s share fell
to 53% in 2018.
Low unemployment has undoubtedly
raised nominal wages, but after adjusting
for inflation, the median household
income was roughly the same as two decades
before, while the average real wage
has barely changed, rising just 0.42%
from December 2016 to September 2019.
Meanwhile, the value of fringe benefits
– including health insurance, retirement
and bonuses – declined by 1.7% during
Trump’s first three years. 1.9 million
more Americans lack health insurance
coverage, raising the total to 27.5 million,
i.e., 8.5% of the US population in
2018.
Thus, despite declining joblessness
before the pandemic, aggregate real compensation
fell 0.22% under Trump. Average
real hourly earnings of US$23.24 in
March 2019 were not higher than at its
peak in March 1974.
With the pandemic, real (seasonally
adjusted) average hourly earnings for
all employees dropped 0.9% from April
to May 2020, while nominal earnings of
private nonfarm payroll employees fell
66 cents to US$29.37 in June 2020 from
US$30.03 in April.
Meanwhile, labor income inequality
has increased, with declining real
incomes for the unskilled and poorly
skilled, as remuneration gains have mostly
and increasingly gone to the highestpaid,
mainly executives.
Infecting the numbers
Following policy responses to the
Covid-19 pandemic, the US labour force
participation rate (share of civilian population
aged 16 and older working or looking
for work) fell from 63.4% in January
2020 to 61.5% in June, well below
the pre-financial crisis peak of 66.4% in
January 2007, and the post-WW2 high of
67.3% in early 2000.
Continued from Page 10