With the official values January-March of total basic basket The poverty rate for the first quarter of 2024 would be, INDEC reported Friday 51.8%, according to calculations by Martin Gonzalez-Rozada, professor of the Department and director of the Master in Econometrics and researcher at the University of Tella. Screened across the country are 24 million people are below the poverty line.
Rozada’s estimates are usually confirmed, as he himself states, with “a very small margin of error” more or less than the final numbers that are then reported by INDEC.
In relation to the end of 2023 (IV Quarter) when poverty was 44.9%in just 3 months 3.2 million new poor were added.
The income-based measurement of poverty comes from comparing the income of individuals and families (work and non-work, including social assistance) with the cost of each region’s poverty basket. In the metropolitan region, the basic poverty household basket (typical family with 2 children) in March cost $773,385, not counting rent.
This increase in the level of poverty in just three months occurred due to the devaluation at the start of the new government and the sharp increase in the value of the basic basket (56%, above 51.6% of average inflation) between January and March, with the incomes of the active population, pensioners, the self-employed and small professionals and traders increasing well below these percentages in the first three whole months of management Javier Milei.
With a significant addition: 51.8% predicted that at the beginning of the first quarter individuals and families will receive half of the Christmas bonus. Without this “extra,” poverty is usually higher in the second quarter and may show up in the next quarterly measurement.
Compared to a year ago, there are more than 13 points or 6 million new poor compared to the first quarter of 2023 when poverty was 38.8%.
Consequentially, the impoverishment of employed workers was strengthened in all types of work (registered and unregistered), in an employed or self-employed relationship and in those who are self-employed due to the delay in family income in the face of the sharp increase in inflation. And due to the poor quality of most employment (salaried workers and informal self-employed workers, without pension contributions and even among registered workers).
For example, in the first quarter the Living and Minimum Wage (SMVM) increased by 30% compared to inflation of 51.6%, a real decline of 14.2% in this first quarter of 2024. Pensions and pensions remained without an increase in January and February and only recorded an increase of 27.18% in March, including the bonus, compared to February.
Additionally, the Congressional Budget Office (CPO) reported a sharp decline in child support revenue; Unemployment benefit; the Empower Work plan and other social programs. And the real salary of registered workers, with contributions to Social Security, In the RIPTE measurement, it showed a 19% decline from November 2023 to February 2024.
Already with 38.8% poverty a year ago, The new poor come from the middle class, especially due to the skyrocketing prices of that social sector. As reported this Friday Clarion, According to INDEC data, in the first three months of this year, compared to an average inflation in the Metropolitan Region of 53.2%, items such as Electricity, gas and other fuels increased by 121.1%, Prepaid expenses are increased by 105.4% (double the average), Telephone and internet services + 84.2%, Personal care services + 82.9%, Education + 70.3% and Recreational and cultural services + 55.7 %.
From here it follows that a part of the middle class began to swell the vulnerable sectorsanother part fell into poverty, and those who were already poor became destitute or extremely poor.
Added to this are the increase in income inequalities (the gap between those who earn more and those who earn less is widening) and the decline in employment levels due to the strong recession, in particular due to the almost total paralysis of public works and the redundancy fund in the public sector.
For this second quarter, the population’s income will depend on employment levels, affected by the recession and layoffs in the public sector, on the increase in pensions and social benefits and on what was agreed in the joint negotiations. On the household spending side, the impact will come from strong tariff adjustments such as gas, electricity, water and transport which will impact inflation rates at various points.
Source: Clarin
