Are we all suffering from poverty?

Two surveys reveal...:

by Indeewara Thilakarathne

Poverty is relative. Compared to ten per cent of the super rich, the ordinary members of the society are poor. However, the benchmark or the poverty line in Sri Lanka is around a monthly income of Rs.1000. If a person earns a monthly income of Rs.1000 or less than the sum, he or she is considered as poor.

Although most of the employed persons who belong either to the lower middle class or upper middle class earn a monthly income of Rs. 5000-Rs.10, 000, it is a home truth that more than 50% of their income is spent on basic needs and on transport.

In the light of the Social Policy Analysis and Research Centre (SPARC) / ILO Socio-Economic Security Survey (SES), the majority of the respondents admitted that their income was inadequate to meet their food expenditure, Education and Health Care, although health care is by and large provided free by the Government.

SES has, among other things, found out the existence of significant regional variations with regard to the degree of poverty at different levels; in urban sector only 5% earns below national poverty line compared to rural and plantation sectors 11% and 15 % respondents are below poverty line. Lack of opportunities in remote locations (highest poverty incidence in Uva province), Tsunami disaster and conflict related poverty (Batticaloa) have been cited as reasons for the existence of higher level of poverty in diverse sectors.

One of the significant findings of the survey is that the majority of the respondents have very low expectation about their income security in their old age.

This has wider social implications given significant changes in the age-pyramid towards ageing population. On the other hand, the findings also indicate the total or partial failure of social security schemes such as pension, EPF and ETF against rising inflation, resulting in the higher cost of living.

The respondents have also expressed concern about the rising cost of health care which has been cited as a major financial burden, clearly sending warning signals to health policy makers that there might be marked discrepancies in the free health care facilities offered by the Government sector , though it has substantially contributed to increase the life expectancy in Sri Lanka.

Among the significant findings of the SLFS are that salaried workers are very low among industrial workers and the wage differentials are high between small, medium and large firms.

With regard to the availability of training opportunities, it has been found out that very little training opportunities are available for workers in all categories and that training is more or less confined to 'on the job training'.

According to researcher Mahinda Pushpakumara, highest labour turnover (mean moving of workers from one establishment to another either on voluntary or in-voluntary basis in a given period) has been observed among small scale establishments.

One of the indirect results of the higher labour turnover is that pruning of training opportunities, especially, in small business establishments and agency-hired workers who have been deployed in lower categories of employment.

SLFS also found out that although majority of business establishments provides non-wage benefits such as medical benefits in case of accidents, sick leave and paid leave, very few firms provide most sustaining benefits such as pension and retrenchment benefits.

The surveys should be a must read for policy makers in order to come to terms with some of the grim realities and discrepancies in the existing policies, especially in health and social welfare sectors.

****

Socio-Economic Security (SES) Survey and Enterprises Labour Flexibility and Security (ELFS) Survey were conducted by the Social Policy Analysis and Research Centre (SPARC) at the University of Colombo.

The Surveys were conducted as a part of an International Study coordinated and financed by the ILO under its Socio-Economic Security Programme. SES was conducted in five districts; Colombo, Hambantota, Kurunegala, Ampara and Nuwara Eliya.

Findings of the SES

1. Majority of respondents are wage earners (57.2); own account workers (41.0) also constitute a large portion of the sample.

2. Most of wage earners are in private sector, formal and informal (70%).

3. Self-employed persons are mostly concentrated in the agriculture (40.5) and service (37.6) sector. Only 7% of the self-employed are in manufacturing.

4. Nearly 50% of households in Colombo belong to the higher income group (more than Rs.10, 000 per month). Low-income category (below Rs.5000) predominates in more disadvantaged districts, i.e. Hambantota (47%) and Nuwara Eliya (48%).

5. In all districts a large majority of households report that their income is inadequate to meet their food expenditure (61%), Education (69.3) and Health Care (67.2%).

6. Majority in disadvantaged districts like Hambantota (52.3%) and Ampara (59.6%) report worsening of their financial situation over the last few years. A large population of households in Colombo (33.8%) and Kurunegala (27.4%) report an improvement of their financial situation.

7. A large majority of households in all districts except in Colombo are not satisfied with their financial situation, Kurunegala 51%, Hambantota 64.3%, Ampara 62.9 % and Nuwara Eliya 62.2%.

8. As for expectations regarding future financial prospects, there are significant regional variations. Nearly a third of the households (31.3%) feel that the situation will get worse. Households in Colombo (22.6%) and Nuwara Eliya (23.8%) have a more positive out look.

9. The large portion of the respondents (39.5%) expect income support from children and relatives in old age. Nearly 20% of respondents intend to continue working in order to support themselves.

10. Over 50% of the respondents are not hopeful about income security in their old age. A significant portion (18%) has no idea regarding future income security.

11. Health related costs are the most widely mentioned as affecting the financial situation of households (29%). Debt burden comes next (20.4%).

12. Unemployment rate among male is 11% whereas female unemployment rate is 20%.

****

Findings of ELFS

The survey was conducted in Colombo, Gampaha and Kalutara districts in the Western province and Kurunegala district in Wayamba province and Ratnapura district in Sabaragamuwa province.

1. Out of the workforce, nearly 5% of them are unpaid family workers and 68% of them are regular workers, 27% are non-regular workers (contract, casual & part-time). Only 0.5% workers are agency-hired.

2. High level of gender-segregation is observed in certain occupational categories. Out of total employees covered in the survey, 52% are female. Among managerial, executive and administrative level categories, 19% of workers are female.

However, within professional and technical categories, 88% are male. Only 12% of professional and technical workers are female. It is further observed that for the technical etc. category, employers prefer to hire male workers indicating the existence of a gender bias in selections.

3. Only 27% of the establishments provide training placement for the apprentices.

4. Since 2005 November 31st to 2006 April 30th 11,527 vacancies have been filled by these establishments.

5. Out of total vacancies, only 8% are filled through internal promotions. Advertisement (47%) and personal contact (42%) are main sources of vacancy filling. In the household survey, it came out that 25% of job applicants have approached the prospective employer through personal contacts.

6. During this period, 65% of new recruitments are on regular basis and 31% are hired as temporary workers indicating a trend towards flexibilisation.

7. During the six month reference period labour turn over as a percentage of total workforce was found to be 18%. In addition, Labour Turn over is high among the production workers.

8. Highest Labour Turnover rate was reported from small-scale establishment (21%).

9. Work related accidents in the past 12 months reported only from 12% establishments.

10. Out of the total establishments only 3.5% , establishments have unions.

[email protected]