Without a doubt, it is good news the reduction observed both in moderate poverty and in extreme poverty, as reported by INEGI. Regarding the first, this went from covering 41.9% of the population in 2018 to 29.6% in 2024, while the second went from 7% in 2018 to 5.3% in 2024. Despite this reduction, the number of Mexicans who were last year in a situation of moderate poverty amounted to 38.5 million individuals and those in extreme poverty amounted to seven million people. It also highlights as an advance that, while in 2018 23.5% of the population was non -poor and not vulnerable both for their level of income and not having social deficiencies, by 2024 this percentage reached 32.2%, which meant 42.3 million individuals.
These results are partially overshadowed by the increase in the percentage of the population that lacks access to social security and the fact that 29.6% of the population was in a situation of multidimensional poverty. It also highlights, as a qualitative element, the lower quality of both public education and health services provided in public institutions, as a result, in part, of stagnation in the budget assigned to these two areas, resources that were channeled to finance public works with negative social profitability and Pemex.
The reduction in the percentage of the population that experiences income poverty and that went from 49.9% in 2018 to 35.4% in 2024 is mainly due to two factors. The first is the increase in labor income as a result, basically, of an aggressive policy of salary increases, which cannot continue to be repeated in the future without being accompanied by significant increases in total factorial productivity.
The second is the increase in transfers to families, which were of two types. The first was the remittances sent to their relatives in Mexico by migrants who worked abroad, mainly in the United States. The accumulated amount of remittances in the 2019-2024 period was 318.3 billion dollars. However, towards the future the amount that is received from these will depend mainly on two factors: the growth experienced by the US economy and the xenophobic immigration policy implemented by President Trump. For the January-June period of 2025 there was already a 10% drop in the amount of remittances received with respect to the same period of the previous year; If the expulsion policy of illegal migrants hardens, they will continue to contract.
The second type of transfers are government through the different social programs (contributory and non-contributory pensions, women between 60 and 64, sowing life, young people building the future, school scholarships, transfers to indigenous and Afromexicanos, etc.), which were significantly increased in the 2023-2024 biennium with the purpose of buying votes with a view to the federal elections of 2024. Doubt, these transfers contributed to reducing poverty for income, but the cost was to cut the expense in education and, above all, in health, and hence 44.5 million individuals do not have access to health services and those who did have faced a lower quality of the service.
Top, the financing of these programs will imply incurring an increasing opportunity cost, even more because several of them were included in the Constitution as “rights”, some of them indexed to inflation and subject to discretionary increases. If government revenues grow at a lower rate than the amount assigned to these programs, particularly elderly pensions, to finance them, it will continue to sacrifice items such as education, health and public investment, which will negatively affect the potential for growth and economic development.
Although transfers help alleviate poverty that derives from having its own income below the poverty line, they are not really the structural solution of this problem. To reduce poverty permanently, it is essential that the economy grows at relatively high and sustained rates, such that it translates into higher jobs with increasing real wages derived from greater productivity. And, in this regard, perspectives are not flattering, starting because this year the economy will grow, in the best, 0.5 percent.
The main problem is that, although in government discourse growth is mentioned as one of the public policy objectives, in the facts the government itself is not providing the economic agents of an institutional arrangement (organizations, laws and regulations) that generates the incentives aligned with the objective of promoting private investment and technological advance that allows increasing total factor productivity, the main sources of economic growth. It would seem that the government prefers to maintain an electoral clientele to Morena and tied to transfers that effectively generate the conditions for greater economic progress; He prefers to perpetuate poverty.
