Nearshore Americas

Poverty on the Rise in Latin America, Despite Years of Improvement

During the last three years, the number of people who have descended in poverty in Latin America has increased after more than a decade of declining levels.

In 2014, 28.5% of the region’s population was in a situation of poverty (168 million people), a percentage that increased to 29.8% in 2015 (178 million) and to 30.7% in 2016 (186 million people). Extreme poverty, meanwhile, rose from 8.2% in 2014 (48 million people) to 10% in 2016 (61 million people).

According to the Economic Commission for Latin America and the Caribbean (ECLAC), which unearthed the statistics, regional countries should be fixing their labor and social protection policies to confront the issue.

The good news, however, is that there has been a significant decrease in income inequality, although the pace of the decline has slowed in recent years. The Gini coefficient (where 0 represents no inequality and 1 maximum inequality) went from 0.538 in 2002 to 0.467 in 2016.

“Recent experience indicates that the rise in income among households with the fewest resources has been indispensable to reducing both poverty and income inequality,” says Alicia Bárcena, ECLAC’s Executive Secretary.

“And this growth has clearly been fostered by countries’ distributive and redistributive policies, such as tax reforms, minimum wages, pensions and transfers linked to poverty reduction strategies, and to the expansion of social protection systems.”

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Poverty rates are higher among children, adolescents, young people, women, and the population residing in rural areas.

Elderly people are growing in number compared to the younger population. It is estimated that by 2040, people 60 years and older will exceed the number of people from 0 to 14, and that the population 80 years and older will increase by nearly 20 million.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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