The advances in Mexico to reduce poverty are positive, but you cannot bet to continue reducing it with the same public policies, since the margin to increase minimum wages, without generating inflation or unemployment, will be reduced over time, according to an analysis of BBVA Mexico.
For the financial group, the only way to increase labor income in a sustained manner is to improve productivity and generate more formal employment, which requires greater investment, which in turn needs an environment of greater legal certainty.
He indicated that the explanation of the reduction of poverty levels could be associated with the labor market and the possible change of labor structure within homes.
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“(Therefore) it is essential to continue promoting policies aimed at reducing informality, to increase investment, and to raise productivity, since these measures constitute key mechanisms to guarantee a sustained reduction of poverty in the country,” he said.
After highlighting the improvements in the fight against poverty reported by INEGI, BBVA Mexico said there are still challenges to face.
For example, access to health services was the only lack of those analyzed by the Institute that not only did not reduce from 2018 to 2024, but increased considerably.
He added that the lack of access to Social Security is the one that has the greatest population: one in two people presents it.
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Another challenge has to do that in 2024 more than half of the poverty population resided in just six entities: the State of Mexico (5.5 million), Chiapas (3.9 million), Veracruz (3.6 million), Puebla (2.9 million), Oaxaca (2.2 million) and Guerrero (2.1 million).
“We must work to reduce structural inequalities between federal entities, since in these six states only 35% of the country’s total population reside,” he contrasted.
When considering that progress in poverty reduction cannot be explained by government transfers, he said that the debate is opened to assume targeting costs to improve the results.
He anticipated that if the transfers were allocated to the lowest deciles of the population, instead of being universal, they would be much more effective in reducing poverty.
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