Working poverty was reduced to 40.3% at the end of 2021

From the Editorial Office

Newspaper La Jornada
Saturday, February 19, 2022, p. 9

The index of the population that is in working poverty – that is, with incomes below the cost of the food basket – fell almost six percentage points in the last 15 months to stand at 40.3 percent in the fourth quarter of 2021, which is largely due to the increase in labor income and the number of employed persons.

This was indicated by the National Council for the Evaluation of Social Development Policy (Coneval), which highlighted that this decrease took place despite the high levels of inflation in Mexico, although the decrease has not been enough to reach the numbers of working poverty that existed before the covid-19 pandemic.

However, since then there has been a quarterly recovery trend (with the exception of the third quarter of 2021), in such a way that for the fourth quarter of 2021 it showed a level of 40.3 percent, which implies a decrease at the national level of 5.7 percentage points.

This type of precariousness also decreased, compared to the third quarter of 2020, in rural and urban areas, with decreases of 4.5 and 6.1 percent, respectively.

According to Coneval, among the factors that explain the fall in working poverty is the increase in per capita labor income of 11.6 percent, going from 2 thousand 460.50 pesos to 2 thousand 745.32 (at prices of the first quarter of 2021) , as well as the increase of 5.1 million employed people.

The specialized body highlighted that this decline occurred in a context where the average annual headline inflation for the fourth quarter of 2021 was 7 percent –3.1 points higher than that of the third quarter of 2020–, which in turn generated increases of more than inflation in the cost of the food basket.

Despite this, Coneval stressed that Although the economy and the labor market have registered a recovery after the health contingency due to covid-19, the percentage of the population in working poverty has not yet reached the levels registered in the quarters prior to the start of the pandemic: in the first quarter of 2020 this level was 36.6 percent.