Mexico Continues to Struggle Against Poverty: CONEVAL

Mexico continues to fight high levels of poverty, reports the National Council for the Evaluation of Social Development Policy (CONEVAL). Its most recent study points to an increase in inflation and a decrease in poverty in urban areas of the country.

“Derived from the health emergency caused by COVID-19, the percentage of the population with labor income lower than the cost of the food basket (working poverty), reached its highest level in the third quarter of 2020 (46.0 percent). As of quarterly changes a gradual recovery was observed except for 3Q21 (40.7 percent),” reports CONEVAL’s study.

Working poverty decreased in Mexico from 2Q21 to 2Q22, dropping from 39.9 percent to 38.3 percent. The monetary value of the food basket, however, increased 12.6 percent in rural and 12.0 percent in urban areas as inflation continues to shock the country with an average annual headline at 7.8 percent. Inflation stands 1.8 percentage points higher than the same quarter in 2021.

“The annual decrease in working poverty in the second quarter of 2022 is due mainly to a greater number of employed persons paying for the increase in household disposable income. However, this increase in employment is concentrated in jobs whose salary range is less than the minimum wage,” reports CONEVAL.

Real labor income per capita showed an annual increase of 4.8 percent, from MX$2,747.68 (US$137) to MX$2,880.91 (US$141) in 2Q22. Employment increased by 2.2 million people during that same period. In urban areas, working poverty decreased from 36.1 percent to 33.9 percent from 2Q21 to 2Q22. However, in rural areas it increased from 51.8 percent to 52 percent in the same period.

CONEVAL’s Labor Trend Index of Poverty (ITLP) monitors the evolution of labor income and its connection with the cost of the food basket, facilitating the determination of the percentage of working poverty, explains CONEVAL. This study is performed on a quarterly basis using information from the National Survey of Occupation and Employment (ENOE) of the National Institute of Statistics and Geography (INEGI).