Economics: Less inequality, but new trouble areas

MEXICO - Report 12 Aug 2019 by Mauricio Gonzalez and Francisco González

Last week’s release of the National Statistics Institute’s bi-annual National Household Income and Expenditure Survey (Enigh), which corresponds to the period between 2017 and 2018, and the accompanying analysis of how the various dimensions and degrees of poverty have evolved from Coneval, delivered at best a bittersweet taste of how conditions are evolving.

The report showed a narrowing of inequality compared to 2016, though mainly as a result of average household incomes falling among the top three income deciles, with most of the contraction confined to the very top tier. That erosion of money flowing to the most affluent families was largely a result of pronounced reductions in income from rental properties, and from corporate and partnership sources. All other deciles showed growth ranging from 0.1% to 1.9% while a notable reduction in transfers – which accounted for between a fifth and more than a third of current family incomes of the four lowest deciles – limited growth in the amount of money entering low income households.

There were contrasts in almost every part of the report. The gender income gap closed a bit as women’s average incomes rose and those of men fell to a similar degree. The tenth decile of households receives 33.6% of current income in Mexico, while the first decile obtains only 1.8%.

There was some good news from Coneval’s readings of multidimensional poverty, as the percentage of people living in poverty narrowed by about 1.5% (but still accounts for 42% of the population), while those in extreme poverty slipped to a 10-year low. Inside the poverty indicators, an improvement was observed in the case of access to quality education and housing, but it worsened for the first time in ten years in the case of access to health services, social security, and basic housing services, while access to food fell for the first time since it recovered following the 2009 recession.

Overall, the income and poverty outlooks are not promising, especially considering significant rises reported in some multidimensional poverty indicators that had been improving for years.

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