According to the latest report of the “Monthly Estimator of Poverty and Structure of Social Segmentation” of the Institute of Workers’ Statistics (IET) of the Metropolitan University of Education and Labor (UMET) and the Centro per la Concertación y el Desarrollo (CCD), “if the best economic scenario occurs in the second half of 2023 (which would mean a 2% growth in GDP), poverty levels would be brought back to values practically equal to those of the second half of 2018”.
The IET analysts see that if it supports the growth coming from 2021, “it would make it possible to reduce the deterioration linked to the pandemic and, in the average and optimistic scenarios (for the economy in 2023), it would start to partially cut the progress of poverty which is it occurred during 2018 and 2019.” The threat to this possibility, as warned by the director general of the CCD and former education minister of the nation, Nicolás Trotta, is inflationary inertia.
For Trotta, “inflationary inertia can slow down growth and lead us to more poverty if there is not a real and efficient agreement between all political and social actors. An agreement whose basis and objective is the recovery of workers’ real wages. Since Massa took office as Economy Minister he has been making an effort that has improved expectations, but it is insufficient if there is no real coordinated agreement ”.
The document also points out that Argentina’s socio-economic pyramid has flattened over the past year. According to the data, the weight of the upper-middle income population decreased by 21.6%, going from 18.5% to 14.5% of the total. And the weight of the High Income segment decreased by 43.4%, going from 21.6% to 12.6% of the total population. In other words, the population of poor and low-middle incomes has grown.
The analysis warns that, according to the latest measurements of income and purchasing power, those for the period April-September 2022, 38.1% of the population is below the poverty line and 35.2% has income medium low, which means that you can hardly buy anything more than a Total Basic Basket. In other words, 73.3% of the total population, more than 7 out of 10 people, are in a state of economic fragility: they are either poor or on the verge of falling into poverty.
“The growth of poverty and the loss of wages against inflation from 2018 to today have made us wake up in the worst way from the dream of the Argentine middle class. We need wages that beat inflation, for employment to continue to grow, and for this to go hand in hand with wages that guarantee at least the purchasing power of a family’s basic food basket,” reflects Trotta.
For her part, the general coordinator of the Monthly Estimator of the Structure of Poverty and Social Segmentation, Ana Paula Di Giovambattista, explained that “one of the results found is linked to the fact that economic growth is a necessary but not sufficient condition for the trend reversal a flattening phenomenon of the socio-economic pyramid that began in 2018, after the economic crisis. This effect consists in the fact that between 2017 and 2022 the Poor and Lower Middle Income segments gain weight and the Upper Middle Income and High Income segments decrease”.
“Until the beginning of 2022 there had been a partial improvement in poverty rates, after the sharp decline due to the economic crisis of 2018. Since then, and as a consequence of the inflationary acceleration, the available information shows a new impact on the power of purchase of income, in a context in which the economy has grown and unemployment has decreased. It is in this sense that the main problem linked to the living conditions of the population is directly correlated to income and its purchasing power”, explains the economist.
If GDP grows by 2% in 2023, the poverty rate will be the same as in 2018, according to the EIT’s Monthly Poverty Estimator and Social Segmentation Structure of the UMET and the CCD. The document warns that 73.3% of the population is now poor or about to be poor. “Inflation can slow down growth and would lead us to more poverty if there weren’t a real agreement between all political and social actors,” warns the director of the CCD and former Minister of Education of the Nation, Nicolás Trotta.
Source: Clarin
