Poverty in the Bahamas

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Table of contents

Table of contents        

Introduction        3

Defining Poverty in the Bahamas        3

Unemployment and Poverty        4

Causes of Poverty        5

Effects of Poverty        7

The Cost of Poverty        

Combating Poverty        

Observations and conclusion        13

Appendix 1a.        18



The common definition of “Poor” is having little or no wealth and few or no possessions, whereas “poverty” on the other hand is defined as a lack of basic human needs, such as adequate and nutritious food, clothing, housing, clean water, and health services.  If you have never took the time to care enough to understand the horrible conditions that poverty brings to those who live under its grip, then perhaps understanding the social and economic causes and effects that affect us all will give you the realization that poverty is not just the poor man’s problem; It’s our problem.

Perhaps understanding the poverty problem will help us to avoid increases of the poverty rate in our own country. Perhaps making suggestions on how to reduce poverty will inspire others to make their own. This is the purpose of this report.

Defining Poverty in the Bahamas

FACT:  the latest estimates suggest that 28,426 Bahamians live below the poverty line. That’s roughly one in every ten people you know can only afford low cost diet with other basic necessities.

A survey in the Bahamas, that was conducted between the 2001 and 2002 assessed over two thousand randomly selected households, was commissioned to provide a general overview of Bahamian living conditions it was called “ The Bahamas living conditions survey of 2001”.  From this survey the Bahamas established a poverty line for the very first time.  It was determined that $7.84 was the minimum amount of money needed per day per person to maintain a low- cost diet with some allowance for other basic necessities.  With the poverty line being established the survey showed that a moderate 9.3% of Bahamians and 5% of households fell below this minimum level.

To put our poverty level in perspective to the rest of the world, the Bahamas pretty well off when compared to countries like The USA with 12% or Spain with 20%.

Even with our relatively low poverty rate it is important to note that we have not updated our figures in over 8 years.  There are many factors, as we will see later in this report that would have lead to an increase in the poverty rate. One such factor is the worldwide recession that some deem to be worst than the depression of the 1930’s.  

Unemployment and Poverty

According to a report published in 2002 By Peter Saunders of University of New South Wales, there was research conducted in 1970’s by the Poverty Commission that maintained unemployment as a major source of poverty. The report explains that in many cases poverty rates change independently of unemployment rates.  The report continues on to show that unemployment may not  lead directly to the rise of poverty because of generous social benefits, but  it is because of these benefits that there is a lack of competitiveness leading  extended periods of unemployment which then in turn leads to  poverty as benefit eligibility expires under social insurance schemes.

An article by Macushla N. Pinder in the Bahama Journal on October 1st, 2008 shows that unemployment had increased by almost by a one full percentage point in between the 2007 and 2008 from 7.9% to 8.7%. In this report former Labor Minister Vincent Peet said that he expected the number to continue to rise in the midst of the global economic crisis.

On May 4th, 2009 the Bahamas will start with a social insurance scheme called the Unemployment Benefit scheme”. In this scheme national insurance will now pay out money to persons who are unemployed. The money used for this scheme is being taken directly from the National Insurance Board’s Medical Fund made up of contributions from employers that was never used due to lack of regulation.

Going from the understanding that extended unemployment leads to dependence on these programs and limited funding in of these schemes will likely lead to increased poverty, the Bahamas has now set a course that will like lead to increased poverty rates. Unless there is a change in the economy before this fund runs out the government will only have succeed in postponing the inevitable rise in poverty. If this scheme is only used for a short period, it still only brings relief for a short while and does virtually nothing to combat the poverty rate that is bound to increase.  As it stands 20 million dollars of the Medical Fund will only last a few short weeks if divided among 26,953 people, approximately the 8.7 % said to be unemployed.  

Causes of Poverty

Besides recession and unemployment there are many other factors that may lead to poverty rate increases.  Some of these factors are overpopulation, bad resource management, inflation, inadequate education, lack of employment opportunities, environmental degradation, and welfare incentives.

Some of these factors are more likely to affect the Bahamas than and are entangled so that the one cause of poverty leads to the next and create a cycle that often keep impoverished people poor.

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 Causes of Poverty: Inadequate Education and Minimum Wage

Inadequate education is high on the list of likely factors to affect the poverty rate in the Bahamas.  The Bahamas’ average grade on national exams up to 2007 has been little more than a D, with a D+ in 2005.

With this in mind the highest level of education many of our population will ever receive is a below average high school graduate diploma.  Understand that the minimum entry level in to national tertiary education requires at least a C average.

What are the implications of this relatively low standard ...

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