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Poverty Rates in Latin America Remain Above Pre-Pandemic Levels in 2022, ECLAC Warns

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24 November 2022|Press Release

The Social Panorama 2022 report projects that 201 million people (32.1% of the region’s total population) live in situations of poverty, with 82 million (13.1%) of them in extreme poverty. The regional organization calls for urgently addressing the silent crisis in education to avert the risk of a lost generation.

Despite the slight decline recorded in 2021, projections indicate that poverty and extreme poverty rates remain above pre-pandemic levels in 2022 in Latin America and the Caribbean, the Economic Commission for Latin America and the Caribbean (ECLAC) warned in its Social Panorama of Latin America and the Caribbean 2022 report, which was presented today in Santiago, Chile and which addresses education as a central issue along with its role in the debate on policies for the region’s recovery.

“After a sharp increase in poverty and a slight increase in income inequality in 2020 as a result of the COVID-19 pandemic, the extreme poverty and poverty rates declined in 2021 and the middle-income strata grew, but not by enough to fully reverse the negative effects of the pandemic,” the publication explains. Thus, in 2021, Latin America’s poverty rate reached 32.3% of the region’s total population (marking a 0.5 percentage point decline from 2020), while the extreme poverty rate was 12.9% (0.2 percentage points less than in 2020).

ECLAC projects that by the end of 2022, poverty will stand at 32.1% of the population (a percentage equivalent to 201 million people) and extreme poverty at 13.1% (82 million), which points to a slight decline in overall poverty and a slight increase in extreme poverty versus 2021, due to the combined effects of economic growth, labor market dynamics and inflation. These figures mean that an additional 15 million people will be living in poverty in comparison with the situation before the pandemic and that there will be 12 million more people in extreme poverty than there were in 2019.

The extreme poverty levels projected for 2022 represent a 25-year setback for the region, the regional organization underscores.

As in past years, ECLAC indicates that the incidence of poverty is greater in some population groups in the region: more than 45% of the child and adolescent population lives in poverty, and the poverty rate of women from 20 to 59 years of age is higher than that of men in all of the region’s countries. Similarly, poverty is considerably higher in the indigenous and Afrodescendent populations.

In 2021, income inequality (as measured by the Gini index) declined slightly versus 2020 in Latin America, reaching 0.458, which was similar to 2019 levels.

Meanwhile, the unemployment projected for 2022 represents a setback of 22 years, particularly affecting women, whose unemployment is seen rising from 9.5% in 2019 to 11.6% in 2022.

“The cascade of external shocks, the deceleration of economic growth, the weak recovery in employment and rising inflation are deepening and prolonging the social crisis in Latin America and the Caribbean,” José Manuel Salazar-Xirinachs, ECLAC’s Executive Secretary, stressed during the presentation of the document. “We have not been able to reverse the pandemic’s effects on poverty and extreme poverty, and countries face a silent crisis in education that is affecting the new generations’ future,” the senior official warned, calling on countries to invest decidedly in education and to turn this crisis into an opportunity for transforming educational systems.

Latin America and the Caribbean experienced the longest educational blackout worldwide (with an average shutdown of educational establishments of 70 weeks, versus 41 weeks in the rest of the world), which exacerbated pre-existing inequalities related to access, inclusion and educational quality. In this period, one of the main limitations on educational continuity was unequal access to connectivity, equipment and digital skills. In 2021, in 8 out of 12 of the region’s countries, more than 60% of the poor population under 18 years of age had no connectivity in their household.

If action is not taken now, ECLAC points to the risk of permanent scarring in the educational and labor trajectories of the youngest generations in the region. According to the United Nations regional organization, learning losses in the Caribbean have already been measured, and, in Latin America, the percentage of young people from 18 to 24 years of age that neither studies nor does paid work increased from 22.3% in 2019 to 28.7% in 2020, especially affecting young women (36% of them were in this situation, compared with 22% of men).

In addition, significant gender gaps persist in terms of performance and areas of education. Female students have poorer performances on average in mathematics and science during basic education, with deeper disparities in the lowest income quartiles. Furthermore, in the majority of the region’s countries, the proportion of female graduates in STEM (science, technology, engineering and mathematics) fields does not exceed 40%.

Despite the progress made in recent decades on access and educational inclusion at all levels, from early childhood to higher education, the region’s countries still had serious pending issues in terms of educational equality and quality prior to the crisis prompted by the pandemic, which were already hampering efforts to achieve the targets of Sustainable Development Goal (SDG) 4 by the year 2030. In line with the United Nations’ Transforming Education Summit held this year, the document provides numerous policy recommendations to turn this crisis into an opportunity for transformation.

The social institutional framework is a critical factor for the effectiveness of social policies and is a cross-cutting element for achieving inclusive social development, ECLAC sustains in the Social Panorama 2022.

Social spending by the central government reached 13% of GDP in 2021 in Latin America, below the level seen in 2020 but far above what had been recorded in the last two decades. In the Caribbean, social spending reached 14.1% of GDP in 2021, marking a historic high.

In 2021, education spending amounted to 4.1% of GDP (30.5% of total social spending) in Latin America and the Caribbean. “While public spending on education in the countries of the Organisation for Economic Co-operation and Development (OECD) in 2019 averaged 4.9% of GDP, a figure similar to that of the region (4% of GDP in 2019), spending per student in OECD is six times the equivalent in Latin America and the Caribbean in pre-primary, 5.7 times in primary, 5.3 times in secondary and 6.1 times in tertiary,” the publication specifies.

“We are facing a cascade of crises that has exacerbated the region’s inequalities and shortfalls. This is not a time for gradual changes, but instead for transformative and ambitious policies,” José Manuel Salazar-Xirinachs, ECLAC’s Executive Secretary, reiterated. “Intersectoral public policy efforts are needed that would link educational offerings to health, work and social protection, and that would allow for establishing mechanisms to guarantee a certain level of well-being and income in an era of volatility and uncertainty,” the senior official argued, urging countries to build “new social compacts accompanied by fiscal contracts to make progress on strengthening democracy and social cohesion and to ensure the financial sustainability of social protection systems in the region.”