The incidence rate of poverty reached 37.3% of the Argentine population at the end of the second half of 2021, 3.3 percentage points less than in the first half of the year, is explained by an increase in the employment and income rates of workers, as well as a slowdown in the price of food and the increase in the amounts received by minimum pensions and family allowances such as the AUH, and other social plans, according to a report by the Center for Argentine Political Economy (CEPA).
The CEPA, led by Hernán Letcher, analyzed in this way the numbers reported this Wednesday afternoon by the Indec on the evolution of poverty and indigence.
One of the keys was the slowdown in food inflation which, as of May 2021, had a more moderate evolution, standing at values below or close to general inflation.
“During the first half of 2021, the average food inflation amounted to 4%, while in the second half it was 2.9%. As the price of food determines the levels of the food basket and the total basket, lower than general food inflation explains part of the slowdown in poverty,” the report said.
Another contributing factor was improvement in workers’ income.
“If the evolution of the SMVM (Minimum Vital and Mobile Salary) is considered in real terms, a recovery of 10.4 points is perceived in the second semester in relation to the first. On the other hand, if it is compared with the evolution of INDEC’s salary, a drop of 5 points is registered. Additionally, if the RIPTE measurement is observed, the average increase amounts to 2.2 points,” detailed the CEPA document.
In any case, the report pointed out that lower-income households have higher rates of informality, so their salaries are not tied to parity negotiations, so that the indicators to consider “do not present a uniform behavior.”
It also positively influenced improvement in employment indicators.
“During the second half of 2021, all employment indicators improved. Unemployment stood at 7%, the lowest value since 2015while at the same time the employment rate increased from 45.9% in the fourth quarter of 2020 to 46.9% in the same period of 2021,” the report added.
Finally, the increases set by the mobility formula for the Universal Child Allowance (AUH), the social plans and the minimum retirement during the second half of 2021, made it possible to improve the real average amounts received by its beneficiaries.
“The AUH shows an improvement of 2.5 points compared to the average for the first half of 2021. In the case of social plans, the increase exceeds 10 points. Finally, the minimum pension shows an improvement of 8.4 points. There were no noticeable variations in quantities,” he asserted.
However, the anticipated data for the first quarter of 2022 indicate that poverty would increase again this year, given the accelerated increase in products that have greater weight in the basic basket, such as food, in coincidence with “old” wages and updates that have not yet been made. were implemented.
“The indicator could show a growing trend in the first quarter of 2022 and a decreasing trend in the second,” CEPA concluded.
