Covid-19 pandemic triggered poverty in Latin America

The pandemic widened the gap between rich and poor 2:24

(CNN Spanish) -

2020 ended with an additional 22 million poor people in Latin America and the Caribbean.

In total, 209 million people live in poverty, according to the annual report of the Economic Commission for Latin America and the Caribbean (ECLAC).

It is an unprecedented figure, according to the agency.

In addition, Latin America worsened in inequality indices, employment rates and labor participation, especially for women, the report says.

Of the 209 million people in poverty at the end of 2020, 78 million of them are in extreme poverty.

They are 8 million more than in 2019.

And what comes is not better.

According to ECLAC projects, the region will register a 7.7% drop in Gross Domestic Product (GDP).

The report "estimates that in 2020 the extreme poverty rate stood at 12.5% ​​and the poverty rate reached 33.7% of the population."

LOOK: "Poverty multiplies the possibility of dying from covid"

Government measures helped

ECLAC says that the emergency actions that governments took in 2020 helped alleviate the increase in poverty.

"The governments of the region implemented 263 emergency social protection measures in 2020. These reached 49.4% of the population, approximately 84 million households or 326 million people," says the organization and calculates that without these measures the extreme poverty would be 15.8% and poverty 37.2%.

advertising

(MAURO PIMENTEL / AFP via Getty Images)

Those most affected: low- and lower-middle-income people

«It is estimated that in 2020 some 491 million Latin Americans lived with incomes up to three times the poverty line.

Around 59 million people who belonged to the middle strata in 2019 experienced a process of downward economic mobility, ”says the ECLAC report.

Inequality will also increase as a result of the pandemic

ECLAC affirms that inequality in 2020 could reach a Gini index 2.9% higher than that of 2019. The Gini coefficient measures inequality in income distribution and ranges from 0 to 1, where 0 is perfect equality and 1 perfect inequality.

LOOK: Could the gap between wealth and poverty be reduced by forgiving university debt?

"Without the transfers made by governments to mitigate the loss of labor income, the distribution of which tends to be concentrated in low and middle income groups, the expected increase in the average Gini index for the region would have been 5.6%" .

(NORBERTO DUARTE / AFP via Getty Images)

Working market

At the end of 2020, unemployment reached 10.7%, an increase of 2.6 percentage points compared to 2019.

The fall in employment and the departure of people from the workforce due to the pandemic affects more women, informal workers, youth and immigrants, the report says.

Actions requested by ECLAC

"There is no doubt that the costs of inequality have become unsustainable and that it is necessary to rebuild with equality and sustainability, aiming at the creation of a true welfare state, a long-overdue task in the region," says Alicia Bárcena, executive secretary of the United Nations regional commission, cited in the report.

Based on this, the organization urges, among other measures, that countries create a welfare state that includes, in the short term, policies such as an emergency basic income, a bonus against hunger and an emergency basic income for women.

In the medium and long term, ECLAC calls for a universal basic income that gives priority to families with minor children, and calls for universal systems of social protection.

Poverty