The myth of Mexico’s extreme poverty

Recently it came to my attention that according to some sources, Mexico’s extreme poverty increased during Obrador’s administration. I was skeptical of this conclusion because according to my own analysis of the changes in income distribution between 2018 and 2020, it was the poorest who experienced the biggest benefits.

This is not the first time I’ve heard the argument that somehow leftist policies do not actually lift people from extreme poverty, but actually make it worse, which does not make any logical sense to me.

So I decided to investigate the claim.

Quick math

Most sources seem to point to an article published in Associated Press, which makes the following claim:

Curiously, there are about 400,000 more Mexicans in extreme poverty than at the beginning of his term, according to government data.

Associated Press

They do not mention what this “government data” is, which is a strange tendency I’ve seen in corporate “professional” articles. Most amateur articles provide links to their sources, and even Wikipedia articles do that, but I digress.

Thanks to Google I managed to find what appears to be the source of this claim: a press communication from CONEVAL in 2023: The CONEVAL presents multidimensional poverty estimations 2022.

In that document one of the bullet points contains:

The former indicates that the number of people in extreme poverty changed from 8.7 to 9.1 million between 2018 and 2022.

CONEVAL

That’s 400,000 more people, so yeah: Associated Press reported correctly that there’s more people in extreme poverty. Case closed.

Not so fast.

Just because the total number of violent crimes in a city increased by 6,000 that doesn’t necessarily mean the average citizen is experiencing more crime. If the population of a city increases by 10%, logically you would expect the total number of violent crimes to increase by 10%. So what matters is the increase per capita.

So how much did extreme poverty increase in Mexico per capita?

Well, between 2022 and 2018 the population increased 4.1%, so naturally you would expect the people in extreme poverty to also increase 4.1%, from 8.7 million to 9.05 million. If in 2022 the people in extreme poverty were 9.1 million, that’s a relative increase of 0.04% of the total population, or 52 k, not 400 k.

In other words: from 7.02% to 7.06%.

But 400,000 is more of a headline than 0.04%, right?

If you don’t believe me, you can look up the official source:

But wait

An increase of 52,000 people is still bad, right? Even if it’s just 0.04% of the total population.

Not necessarily. First we need to understand how Mexico measures “extreme poverty”, and it turns out it’s anything but straightforward.

Naively one would expect that poverty is measured in terms of income, but that isn’t the case. Income is part of the equation, but equally important is access to education, health services and many other factors. So even if a person is receiving a higher income in 2022, if he has less access to health services he might be now considered in extreme poverty while he wasn’t in 2018.

Even if we focus only on income, by law CONEVAL must update the guidelines to measure poverty regularly, and it does that every 10 years, the last time was in 2019. So, it’s entirely possible that the changes between 2022 and 2018 are due to the change in guidelines that happened in 2019.

Moreover, one of the metrics to decide if a person is in extreme poverty or not in terms of income is based on a threshold called the “well-being line”. That threshold is not only based on inflation, but inflation of a basic basket of goods. So if say the global inflation is around 8% in a given year, it’s entirely possible that the well-being line increases by 10%, because what matters is not all good and services, but the goods and services that most Mexicans need to survive. For example the price of cosmetic services do not matter, but the price of tortillas definitely does.

Plus, this threshold is updated month by month.

So if a person is above the well-being line of $1,600 MXN in 2018, but below $2,100 MXN in 2022, does that mean that he or she has necessarily experienced a reduced standard of living? No.

And even if the income of that person had managed to stay above the well-being line, he could still be considered in extreme poverty due to other reasons.

If we only consider income, then the percentage of people in extreme poverty decreased from 14% to 12.1%.

Why didn’t AP mention the fact that in terms of income the poorest have experienced an increase? It’s obvious: because the author Chris Sherman has a clear bias and agenda, which you can easily see in his X account: @chrisshermanAP. The tendency for corporate media to have a bias in favor capitalist or neoliberal agendas should not be a surprise to any objective observer.

Conclusion

I’m not going to pretend that Mexico doesn’t have a problem with poverty, but let’s be realistic: no administration can simply erase a problem that has existed for centuries in one term.

Even in relative terms, we all know what happened between 2018 and 2022 that made the economic prospects of all people around the world dire.

Is anyone going to pretend that somehow Mexico can exist outside reality and the president can wave some magic wand in order to make a severe global economic crisis not affect Mexico?

Considering COVID-19 and the guideline changes in 2019, it’s actually commendable that “extreme poverty” only increased 0.04%.

But let’s remember that Mexico has 6 year presidential terms. In order to say anything definite about extreme poverty, we need the numbers from 2024, which will not be available until 2025. To say that extreme poverty increased based solely on one number that doesn’t take into consideration population increase, is from 2022, encompasses guideline changes, is severely affected by global inflation, and does not explain the context that income increased, but access to health services decreased is disingenuous at best.