TNAG-0482-FCO40-547-Diplomatic-reports-from-Sir-Murray-MacLehose--Governor-of-Ho-1974 — Page 55

28-May 1974

Annex to despatch of

•

The Social Impact of Economic Conditions

May 1974

Wage and salary earners are undoubtedly worse off than a year ago. The index of real average wages for indus- trial workers shows that real wage rates have fallen over the last year by 11% of which 3% is over the last six months. There is also a certain amount of short time being worked

in a number of factories so that take home pay in some cases

will be even more affected. More detailed information is

being sought in this area. There is, however, an average of two earners to every household and the average household in the household expenditure survey now in progress has an income of about $1,700 a month, so that there is some considerable degree of latitude before the poverty line is reached.

2.

The public assistance scheme should moreover pick up all those who fall below the poverty line (about $400 plus rent etc. for a four person household. This will be $500 plus by 1st June). There is, however, no sign of increase in the number of applicants for public assistance. In fact the number of applicants for public assistance in April 1974 is less than in the previous month (1,789 instead of 1,864). Moreover the increase in public assistance scale rates in January by 21% did not bring a rush of new applicants as it should were there a large body of persons near the poverty

line.

3.

The evidence of how people are managing on their reduced incomes is mixed. Certainly there is clear evidence that a high percentage of household income is being spent on food and is now over 50% for those with household incomes up to $3,000 a month, although it still does not exceed 60% for the

lower incomes. Of this a higher proportion is being spent on rice, which is not surprising as the price of rice has doubled over the past year. Low grade rice has few buyers on the market however partly because of the narrow price differential.