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Weekly Roundups

13 Million Mexicans Went from High and Middle to Low Income

By MBN Staff | Thu, 04/01/2021 - 05:00

The economic crisis caused by the pandemic led more than 13 million people with a medium or high income to fall into the lower-income population in Mexico during 2020, revealed a study by the Centro de Estudios Espinosa Yglesias (CEEY). Of those in the highest income group, 56 percent remained in the group during 2019 but in 2020 this number dropped to 55.1 percent, the report stated.

“Over 13 million people with middle to high incomes fell into the ranks of the lowest labor income, which now represents 40 percent of the population. This means that poverty has been fuelled by the middle class, but also by those with a high income,” said Rodolfo de la Torre, member of CEEY. Falling average incomes and rising inequality implies a considerable decline in living standards for a significant part of the population, de la Torre added. According to the study, around 23.7 percent of the Economically Active Population (EAP) stopped seeking employment and paid work, while those still employed saw their income contract. 

This week, a new study by UNAM's University Programme for Development Studies (PUED) revealed that the effects of the pandemic on the economy and the rise in food prices caused an increase in poverty by income that hit hardest those who were already poor. The study notes that extreme poverty and poverty by income rose over the past year. Between 1Q20 and 4Q20, the population in this group is estimated to have risen from 49 to 56 percent.

More news below:

  • The pandemic caused 335,000 people to lose their jobs in the catering sector, including waiters, cashiers, cooks, guards and cleaners, which meant a 25 percent cut in the workforce, revealed a study by the Centro de Estudios Espinosa Yglesias (CEEY). According to El Financiero, some Starbucks workers took a 40 percent pay cut. Moreover, Alsea, operator of Starbucks and some Burger King restaurants, laid off about 16,000 people, informed the company in its financial report.

  • At least two in 10 oil workers globally in drilling, operational support and maintenance jobs could be replaced by field automation over the next decade, said a report by Rystad Energy released on Monday. According to Bloomberg, the US oil industry could save more than US$7 billion in wages by replacing humans with robots on rigs. “Even when the slowdown due to COVID-19 has finally passed, operators will have to continue to explore new avenues for cost reduction,” analyst Sumit Yadav of Rystad reported. 

  • Initial jobless claims fell more than expected in the US, falling below 700,000 for the first time so far in the pandemic, according to data released on Mar. 25 by the Labour Department. Between March 14 and 20, 684,000 claims were filed, lower than the 710,000 anticipated by analysts.

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