Jose Sanchez
Research expert covering society, economy, & politics for Latin America
Poverty and inequality in Mexico - statistics & facts
Poverty is not a new problem in Mexico, a society with high underemployment, a significant part of employees working in the informal sector, rising prices, and severe wealth inequality. Consequently, the situation has only worsened over the decades and reached over 46.8 million people (about twice the population of Mexico City) in the country living through economic hardship. That is 36 percent of the population below the subsistence level and around 7.1 percent in extreme poverty conditions. This also includes non-income dimensions, such as literacy levels, quality housing, access to basic services, and other conditions of vulnerability.
In contrast, states in the north, including Baja California Sur and Nuevo Leon, ranked with the lowest moderate and extreme poverty rates. Northern states represent some of the most industrialized regions in Mexico, which also implemented various development programs such as the “Northern Border Free Zone” with tax reductions, higher minimum wage, and standardization of energy prices with the United States.
The long story of inequality
The Aztec country is full of contrasts. Some of the richest people in the world live in Mexico, while 29.4 percent of the population is at risk of social deprivation. The issue goes even further; in the distribution of the national wealth, around 79.1 percent belongs to the richest 10 percent, ranking the country in the top ten Latin American countries with the highest income inequality. Namely, Mexico's Gini coefficient for wealth disparity remained almost unchanged for the last 21 years, scoring between 48 and 43, where zero would be perfect equality and 100 the highest degree of disproportion. The Mexican government has taken measures to try and counter the situation, such as transfer programs like "Prospera"and "Proagro" or almost doubling the minimum wage in the last three years; nevertheless, the results have been underwhelming in most scenarios.Moderate and extreme poverty
The National Council for the Evaluation of Social Development Policy (known in Spanish as CONEVAL) defines poverty as having at least one out of six social deprivation indicators (educational lag, access to health services, social security, housing sufficiency, basic services, and food). At the same time, a person with extreme conditions lacks three or more indicators. The degree of the problem varies throughout the national territory, and Chiapas ranks as the state with the highest poverty rate with two out of three inhabitants with at least one social deprivation, and one out of five with three or more. This is not surprising due to the lack of productive factors, low educational levels in rural communities, and the constant conflict between the government and the indigenous population.In contrast, states in the north, including Baja California Sur and Nuevo Leon, ranked with the lowest moderate and extreme poverty rates. Northern states represent some of the most industrialized regions in Mexico, which also implemented various development programs such as the “Northern Border Free Zone” with tax reductions, higher minimum wage, and standardization of energy prices with the United States.
Inflation and COVID-19
Mexico has been one of the most impacted Latin American countries after the COVID-19 pandemic, specifically, its GDP fell by around eight percent in 2020 and increased by only 4.8 percent in 2021. Moreover, the global energy crisis, wars, and supply shortages also added to the current uncertainty that put pressure on economies all over the world. Even though Mexico has an inflation rate significantly under the Latin American average, the impact of it was higher for low-income families. In addition, the product group with the highest CPI in June 2024 was food and beverages, the category where the lower percentiles spent the highest share of their income, exacerbating the existing poverty problem and putting in danger countless other families.
