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Poverty Continues to Fall in Latin America, but Still Affects 167 Million People

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27 November 2012|Press Release

The rise in wages has been a determining factor in poverty reduction, according to the United Nations agency.


La Secretaria Ejecutiva de la CEPAL, Alicia Bárcena, durante la presentación del Panorama social de América Latina 2012.
La Secretaria Ejecutiva de la CEPAL, Alicia Bárcena, durante la presentación del Panorama social de América Latina 2012.
Foto: Carlos Vera / CEPAL

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(27 November 2012) The Economic Commission for Latin America and the Caribbean (ECLAC) predicts that the region will end the year with 167 million people living in poverty (or 28.8% of the population), which is one million fewer people than in 2011. The number of people in extreme poverty or indigence will remain stable in 2012 at 66 million people (the same as in 2011).

Poverty in Latin America will continue its downward trend, but at a slower rate than in recent years, thanks to projections of positive economic growth and moderate inflation for the region in 2012, according to the report Social Panorama of Latin America 2012, which was presented today at the ECLAC headquarters in Santiago, Chile.

According to the report, 168 million Latin Americans (or 29.4% of the region's population) were living under the poverty line in 2011. That year, the figure was 1.6 percentage points lower than in 2010.

As in previous years, the rise in wages for poor households was the main determining factor in the poverty reduction. Transfers (public and private ones) and all other revenue played a smaller part in the reduction.

According to ECLAC Executive Secretary, Alicia Bárcena, "Current poverty and indigence rates are the lowest for three decades, and this is good news, but we are still facing unacceptable levels in many countries.  The challenge is to generate quality jobs as part of a development model based on equality and environmental sustainability".

According to the report, the last decade has seen reduced inequality in income distribution, although this issue remains one of the region's main challenges.  The most recent available statistics for 18 countries indicate that, on average, the richest 10% of the Latin American population receives 32% of total income, while the poorest 40% receive just 15% of income.

In addition, ECLAC points out a different trend in the region's public social spending. Up to 2010, such spending continued to rise in Latin America, both in absolute terms and as a proportion of total public spending and GDP (in what was a countercyclical tendency during the international crisis). However, partial data from 2011 indicate that there is tendency towards a relative shrinkage of social spending to shore up public finances, which does not necessarily mean an absolute reduction in the sums allocated to social sectors.

The 2012 edition of the Social Panorama also tackles some aspects of the care issue in Latin America.  The report states that this is "a fundamental issue involving profound gender discrimination and inequality that have a negative impact on women, who bear the burden of care in the form of unpaid and relatively unrecognized work". The document adds that it is difficult for women to reconcile unpaid care work in the household with paid work outside the home.

In specific terms, the document examines paid employment in care activities, as well as household spending on care services, and proposes a series of policy recommendations.

According to the publication, 6.7% of all employed people in Latin America (based on data from 14 countries) work in the care sector, of which around three quarters are employed in domestic household work. Women hold 94% of the jobs associated with this sector: 71% in domestic service and 23% in educational and health services. The remaining 6% corresponds to men in domestic service and other care sector occupations.

There is a higher rate of poverty among care workers than among other employed people (24.1% compared with 20.2% in 2010). Domestic employment in particular combines scarce regulation, low wages, limited access to social protection, discrimination and extremely precarious labour conditions, according to the Social Panorama 2012.


The report also states that a low percentage of households (15%) spend on care services.  On average, only 7.6% of households in the poorest quintile spend on care services (compared with 32% among the richest quintile). Among those who do spend on care, the expenditure is significantly higher in households that include older adults.

ECLAC also studies the situation of disabled people in the region, their care needs and the challenges for public policies. According to the most recent available data from various sources (which remain extremely variable in gathering information that is comparable among countries), around 12% of the Latin American and Caribbean population is thought to be living with at least one disability, which represents around 66 million people.

Lastly, the Commission states that "we need a new balance in terms of the role of the State, the market, families and the community in the provision of care". It calls for a new social contract to establish a fairer distribution of roles and resources among men and women in families and society, and to promote a new link between the public and private work spheres with positive effects for productive development.

As for the role of the State, it is vital to set up national care systems with public institutions capable of integrating policies and services, linking organizations and public, private and civil society resources, and of ensuring the relevance, comprehensiveness and quality of those services.


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