The economic impact of the stoppage of activities by the coronavirus pandemic It affects all sectors, but fundamentally damages the middle and low sectors. In the first quarter of 2020, the poverty index climbed to 45% of the population driven by the quarantine arranged by the Government to control the spread of the virus, according to estimates by the Argentine Catholic University (UCA).
So warned Agustin Salvia, director of the Social Debt Observatory of the UCA, who pointed out that the indicator would have increased between 5 and 6 points. In the previous measurement corresponding to the third quarter of last year, poverty stood at 38% according to reports from the UCA Social Debt Observatory.
“We will be in 45% poverty,” said Salvia in dialogue with radio Futurock, adding that the result is “obvious” as a result of the impact the country suffered from the coronavirus pandemic, that forced social isolation measures, which caused a collapse in economic indicators.
“The impact this produces is an employment and work shock that lowers weekly earnings. This was partially compensated in some way by policies of income transfer, AUH bonus, family income, etc., which produce a compensation effect, but it doesn’t palliate “, explained Salvia.
However, the director of the Observatory maintained that this compensation does not reach the segments that had incomes of $ 30,000 or $ 40,000, which could be lower middle class but not poor, because in case state aid reaches them, it does not cover those incomes . In this sense, he considered that there is a significant impoverishment of the lower middle classes, which have now fallen into poverty or deepened their situation.
“That means that we do not have an impoverishment of the poorest, but of the lower middle class. Those are the sectors that have deepened the situation of poverty, “he said. For Salvia, this is explained because” medium and small companies suspend, reduce hours or cut wages in half, “and their skilled workers or employees see reduced their income.
Regarding the numbers of the impact of the pandemic, the UCA analyst considered: “The Government put it in points, said that it could bank 10 points of poverty in this situation, and it is more or less the expected that has happened.” Regarding 38% poverty in December 2019, he stated that “it is expected that the March shock has increased it by at least 5 or 6 points.”
On the possible way out of the crisis after the coronavirus pandemic, Sage he said it should be done through “a redistributive pact”. “We are going to need to export more in a world that we hope to buy from us, but we are also going to need to produce more for the internal market and for there to be more consumers. This implies an economic and social agreement and at the same time a political one,” he estimated.