The increase in labor poverty is explained by a drop in the average labor income of workers and an increase in the prices of the food basket, said Coneval, in a context of high inflation in Mexico.
“National working poverty in the third quarter of 2022 (40.1%) is higher than the percentage observed before the start of the pandemic in the first quarter of 2020 (36.6%)”, although it is slightly less than the 40.7% observed in the third quarter of 2021.
Food prices grow faster than income
The value of the food basket increased 4.4% in rural areas and 4.5% in urban areas, compared to the previous quarter. In addition, on an annual basis, between the third quarter of 2021 and the third quarter of 2022, the average LPEI increased 14.1% and 13.8% in rural and urban areas, respectively. Both increases were higher than the average annual inflation for the third quarter of 2022 (8.5%).
And while average real income per capita increased by 1.4% compared to the third quarter of 2021, it decreased by 2.5% between the second and third quarters of 2022.
Inequality decreases, but due to falling income
Between the second and third quarters of the year, Coneval observed a real decrease in labor income per person in all income quintiles. And while income inequality has declined for five consecutive quarters, in the third of 2022, the decline in inequality was due to a drop in real labor income per capita in the bottom quintile, that is, in 20% of the population. with higher income).
The Gini coefficient, an indicator that reflects greater inequality in labor income the closer it gets to unity, presented an annual decrease, between the third quarter of 2021 and the third quarter of 2022, going from 0.509 to 0.493, detailed the Coneval , although he pointed out that the Gini remained at levels similar to that of the second quarter of 2022.