when assistance deepens the underlying problem

when assistance deepens the underlying problem

October 13, 2024 – 00:00

The main factor that explains poverty is the sustained deterioration of employment. There is concern that there is a broad consensus that changing labor laws and collective agreements is detrimental to workers and, instead, assistance programs are multiplying to alleviate the consequences of high informality.

Pixabay

Assistance programs are unable to prevent the increase in poverty, since the main source of income in the most humble homes continues to be work. The accumulation and overlapping of programs does not solve the situation. It is necessary to implement transformations that make employment more dynamic.

Currently, data indicates that poverty in urban areas reached 53% of the population during the first half of 2024. To put this in perspective, in the 2002 crisis, poverty was 54%. It is important to remember that this phenomenon stopped being measured between 2007 and 2015, and from 2016 its registration was restarted, registering 27% in 2017, 36% in 2019 and 41% in 2023. In short, the increase in Poverty is a significant and chronic problem.

It is paradoxical that this occurs despite considerable assistance. In the 2002 crisis, the growth of poverty was exponential. A turning point was the creation of the Universal Child Allowance (AUH), which was amalgamated with other assistance plans at the three levels of government.

Specifically, according to INDEC, in 2024, 77% of the family income of urban households comes from labor sources, while the remaining 23% comes from non-labor sources. Among non-poor households, 81% of income comes from work and 19% from non-work sources. On the other hand, in poor households, 53% of income comes from work and 47% from non-work sources.

In itself, the main source of income for families is work. Other sources, such as State transfers, savings and income, are complementary. Furthermore, informal employment prevails in poor households.

The sustained deterioration of employment

The main factor that explains poverty is the sustained deterioration of employment. In the 2002 crisis, among the working-age population, 35% had formal employment, 25% had informal employment, and 40% had no employment (inactive and unemployed). By 2024, only 32% have formal employment and another 32% remain unemployed, while the percentage of informal workers has grown to 35% of the working-age population.

The lack of generation of quality jobs is the cause of this expansion of informality. The worrying thing is that there is a broad consensus that changing labor laws and collective agreements is detrimental to workers and, instead, assistance programs are multiplying to alleviate the consequences of high informality.

In short, it is necessary to change erroneous consensuses and boost the generation of quality jobs, eliminating inflation and anti-competitive regulations, organizing the tax system and adapting labor laws and collective agreements to the current market, which advances with technology and economic possibilities of each company. Likewise, the educational system must focus on improving secondary education.

* QProfessor at the University of CEMA

Source: Ambito

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest Posts