Mexico fears pandemic pushing millions into poverty

by Christine Murray | @chrissiemurray | Thomson Reuters Foundation
Monday, 11 May 2020 22:20 GMT

A man receives free food at public park, as the outbreak of the coronavirus disease (COVID-19) continues in Mexico City, Mexico May 7, 2020. REUTERS/Edgard Garrido

Image Caption and Rights Information

Fallout from coronavirus could translate to at least 70 million Mexicans, 56% of the country, not earning enough to cover basic needs

Coronavirus is changing the world in unprecedented ways. Subscribe here for a daily briefing on how this global crisis is affecting cities, technology, approaches to climate change, and the lives of vulnerable people. 

By Christine Murray

MEXICO CITY, May 11 (Thomson Reuters Foundation) - The economic fallout from coronavirus could add nine million people to Mexico's poor, according to a government study released on Monday calling for aid like pensions and insurance in the country that provides no federal jobless benefits.

Increased hardship could translate to at least 70 million Mexicans, 56% of the country, not earning enough to cover basic needs, said CONEVAL, the autonomous public agency that measures poverty.

That would be an increase from about 50% in 2018.

Mexico's overall poverty rate, a different measure that includes income and factors like education and access to food, dropped in the decade before 2018 to about 42% of the population, it said.

During that time, access to health care and the quality of housing improved most, the report said.

"The general conclusion is that this crisis threatens Mexico's advances in social development and will disproportionately affect the most vulnerable groups," CONEVAL said.

"Facing this challenge, it is necessary to broaden and strengthen the response measures."

Mexico has about 35,000 confirmed cases of coronavirus, which has killed at least 3,400 people.

With businesses forced to close to help stop the spread of the disease, more than 346,000 formal jobs were lost between mid-March and early April, the government said, with further layoffs expected as the economy shrinks.

CONEVAL suggested policymakers consider introducing minimum universal pensions, unemployment insurance or universal basic incomes to help the most vulnerable.

Currently, there is little help for workers who lose their jobs because Mexico has no federal unemployment benefits.

Jobless workers are mostly forced to rely on savings, their families or upon private charity to survive.

The effects of losing a job are long lasting, and many workers in Mexico earn salaries near the poverty line, said David Kaplan, lead labor market specialist at the Inter-American Development Bank (IADB), a lender to governments in the region.

"It doesn't take a big hit to knock these people into poverty," he told the Thomson Reuters Foundation.

In Mexico, women have been particularly vulnerable to the pandemic as they make up the majority of healthcare workers and face longer hours, risk of illness and housekeeping responsibilities, the report said.

Related stories:

Universal Basic Income: Here's what you need to know

Portugal's low-income households struggle to survive pandemic

(Reporting by Christine Murray; Editing by Ellen Wulfhorst. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

Our Standards: The Thomson Reuters Trust Principles.