News about the decline in purchasing power in Latin America. Last Minute WORLD headlines and events

CARACAS –

According to a World Labor Organization report, the real minimum wage in Latin America fell by 1.7 percent in the first half of the year. This figure is almost twice the world average. The report also says that social unrest could intensify.

Latin America is one of the places hardest hit by inflation, which intensified with the pandemic and the subsequent invasion of Ukraine. The real minimum wage in the region fell by 1.4 percent in 2021 and by 1.7 percent in the first half of this year, after rising by 3 percent in 2020.

According to a report prepared by the World Labor Organization, rising prices, especially for basic services such as food, housing, transportation and electricity, water and communications, are affecting low-income people who use most of their wages to meet their basic needs. needs. For example, in Mexico, the bottom 10 percent of the income distribution use 42 percent of their wages for food, while the figure is 14 percent for those in the top quintile.

The report shows that in the period 2021-2022, the cost of living for low-income households will be 1-4 percent higher than for higher-income households.

Rosalia Vasquez, a wages expert at the World Labor Organization, said: “With purchasing power on the decline, many people, especially women and low-income people, are trying to support their lives by borrowing money. The high percentage of undocumented workers in Latin America and the failure to implement incentives similar to those in developed countries during the pandemic have exacerbated the impact of the crisis.

Venezuela has the lowest purchasing power.

According to official data, the highest inflation in the region today is in Venezuela – 155.8 percent in October. Independent institutions in Venezuela, which ranks first in the global inflation league, report that inflation has reached 213 percent as of November.

In Venezuela, the country with the lowest purchasing power due to unstoppably high inflation and rising exchange rates, the minimum wage today has fallen to less than $10 from $252 a decade ago. The monthly cost of a kitchen for a family of five in the country is over $400.

The lowest inflation rate in the region is in Bolivia at 3.5 percent, while the highest minimum wage is in Costa Rica at $541.

According to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), the number of poor in the region with a population of about 660 million will reach 201 million, and the number of extremely poor will reach 82 people. million by the end of the year.

The region, which is expected to grow by 3.2 percent this year, is expected to halve next year.

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