Inflation Slows Fall in Labor Poverty During April-June Period

The National Council for the Evaluation of Social Development Policy (CONEVAL) reported that more than 49.2 million people in Mexico receive an income below what is necessary to acquire a basic basket, an equivalent to 38.3 percent of Mexico’s working population.

Labor poverty, suffered by the population whose labor income is insufficient to acquire the most basic goods required to live a healthy, recorded its third consecutive quarterly drop, this  despite high inflation rates. The percentage of the so-called working poor stood at 38.3 percent during 2Q22. This implies a reduction of 0.5 percentage points compared to 1Q22, when it reached 38.8 percent.

Despite the decrease in working poverty between April and June of this year, this indicator shows a slowdown compared to what was reported by CONEVAL for the first quarter of the year, when it was reduced 1.5 percentage points after reaching 40.3 percent in 4Q21.

Meanwhile, the information released by CONEVAL shows two key points: even though the number of working poor continues to decrease, it still has not dropped to the level seen before the pandemic, when the proportion of the population in working poverty was 36.6 percent.

Furthermore, the working poverty registered in 2022 is lower than that of the previous six-year presidential term. In 2016, 2017 and 2018, the country maintained percentages of over 40 percent.

The percentage of the population with an income below the cost of the food basket reached its highest level in 3Q20; at that time, 46.0 percent of the general population faced labor poverty. Thereafter, a gradual recovery was observed until 2Q21, which saw 39.9 percent in working poverty. In 3Q21, it registered a rebound to 40.7 percent.

In the annual comparison, the data reported for the second quarter of this year implies a reduction of 1.6 percentage points, going from 39.9 to 38.3 percent. CONEVAL recalled that the current decrease occurs in a context of inflation of 7.8 percent, 1.8 percentage points higher than that presented in the same quarter of the previous year, which was 6.0 percent.