UN: Mexico leads Latin America in poverty reduction thanks to minimum wage increases – Mexico News Daily

Report on Poverty and Inequality Reduction in Latin America: An SDG Perspective

Progress Towards SDG 1 (No Poverty)

A recent United Nations report indicates significant progress towards Sustainable Development Goal 1 (No Poverty) in Latin America, with Mexico leading the region. The analysis, conducted by the U.N. Economic Commission for Latin America and the Caribbean (ECLAC), highlights a substantial reduction in poverty metrics.

• Mexico concluded 2024 with a 3.1 percentage point reduction in its population living in poverty.
• Across Latin America, income poverty affected 25.5% of the population (162 million people) in 2024, a 2.2 percentage point decrease from 2023 and the lowest recorded figure.
• Extreme poverty in the region fell to 9.8% (62 million people), though this remains 2.1 points higher than 2014 levels.
• Multidimensional poverty, which aligns with SDG Target 1.2 to reduce poverty in all its dimensions, saw a notable decrease from 34.4% in 2014 to 20.9% in 2024, primarily due to improved housing and services.

The Role of SDG 8 (Decent Work and Economic Growth) in Poverty Alleviation

Mexico’s success in poverty reduction is directly linked to policies that support SDG 8 (Decent Work and Economic Growth). The primary driver identified in the report is the government’s minimum wage policy, which has improved earnings for low-income workers.

• According to ECLAC, a 135% real-term increase in the minimum wage between 2018 and 2025 explains approximately two-thirds of Mexico’s poverty reduction.
• Mexico’s performance was the principal contributor (60%) to the overall decline in poverty rates across Latin America.
• A major challenge to achieving SDG 8 persists, as 47% of the region’s employed population remains in informal work, lacking social protections and decent working conditions.

Persistent Challenges in Achieving SDG 10 (Reduced Inequalities)

Despite progress in poverty reduction, significant obstacles remain in achieving SDG 10 (Reduced Inequalities). The ECLAC report underscores that Latin America and the Caribbean continues to be the world’s second-most unequal region, with extreme concentrations of wealth and income.

• In Mexico, the wealthiest 10% of the population controls one-third of the national income, while the poorest 10% receive just 2%.
• Regionally, the richest 10% hold 34.2% of total income, while the poorest 10% receive only 1.7%. More comprehensive data suggests the income share of the top 10% may exceed 50%.
• Mexico has shown progress in reducing inequality, with its Gini coefficient decreasing from 0.50 to 0.43 over the past decade. However, global economic challenges threaten to stall this trend.

Policy Recommendations for Accelerating SDG Progress

To address these persistent challenges and accelerate progress towards the Sustainable Development Goals, ECLAC has proposed a series of policy recommendations focused on education, labor, and social inclusion.

1. Achieve SDG 4 (Quality Education): Implement free and universal secondary education, with inclusion policies for disadvantaged groups. This is critical, as 28% of the population aged 20-24 has not completed secondary school.
2. Promote SDG 8 (Decent Work): Formalize the labor market by creating quality jobs with fair wages and social protections.
3. Advance SDG 5 (Gender Equality): Introduce policies to increase the participation of young women in the formal job market.
4. Strengthen SDG 10 (Reduced Inequalities): Enact policies to improve workforce participation for people with disabilities, Indigenous populations, and migrants.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 1: No Poverty

   • The article’s central theme is poverty reduction in Mexico and Latin America. It explicitly states that Mexico led the region in poverty reduction, with its population living in poverty reduced by 3.1 percentage points. It also discusses the rates of income poverty, extreme poverty, and multidimensional poverty across Latin America.

2. SDG 10: Reduced Inequalities

   • The article extensively discusses economic inequality as a major concern. It mentions the Gini coefficient for Mexico, the vast income disparity where the richest 10% of the population controls a significant portion of the national income (one-third in Mexico), while the poorest 10% receive a very small share (2% in Mexico).

3. SDG 8: Decent Work and Economic Growth

   • The primary reason cited for poverty reduction in Mexico is the “sharp increase in the minimum wage.” This directly relates to fair wages and decent work. The article also highlights the challenge of informal employment, stating that 47% of the region’s employed population works on an informal basis, and one of ECLAC’s suggestions is to formalize the labor market by creating quality jobs.

4. SDG 4: Quality Education

   • The article points to educational challenges as a factor in persistent inequality. It notes that in 2023, “28% of the Latin American population aged 20 to 24 had not completed secondary school.” Furthermore, one of ECLAC’s key recommendations for reducing inequality is to provide “Free universal secondary education.”

5. SDG 5: Gender Equality

   • Among the suggestions offered by ECLAC to reduce inequality and poverty is “Advancing gender equality to increase young women’s participation in the job market,” directly connecting the issue of economic disparity to the need for equal opportunities for women in the workforce.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 1.2: Reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions.

   • The article directly addresses this target by reporting on the reduction of poverty in Mexico by 3.1 percentage points and the decrease in both income poverty and multidimensional poverty across Latin America.

2. Target 10.1: Progressively achieve and sustain income growth of the bottom 40 per cent of the population at a rate higher than the national average.

   • The article’s focus on the income share of the poorest 10% (receiving only 2% of income) versus the richest 10% (controlling one-third) highlights the core issue of this target. The increase in the minimum wage is a policy measure aimed at boosting the income of the lowest earners, directly aligning with this goal.

3. Target 8.5: Achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.

   • This target is relevant through the discussion of the 135% real-term increase in the minimum wage in Mexico, which addresses the “equal pay for work of equal value” component. The mention of high rates of informal employment (47%) and the recommendation to create “quality jobs” also connect directly to achieving decent work for all.

4. Target 4.1: Ensure that all girls and boys complete free, equitable and quality primary and secondary education.

   • The article identifies a key challenge related to this target by stating that 28% of young adults (aged 20-24) have not completed secondary school. ECLAC’s recommendation for “Free universal secondary education” is a direct policy suggestion to meet this target.

5. Target 5.5: Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life.

   • ECLAC’s suggestion to advance “gender equality to increase young women’s participation in the job market” directly supports the goal of ensuring women’s full participation in economic life.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Indicators for SDG 1 (No Poverty)

   • Proportion of population living below the national poverty line (Indicator 1.2.1): The article provides this data, stating Mexico’s poverty was “reduced by 3.1 percentage points” and that 25.5% of the Latin American population lived in income poverty in 2024.
   • Proportion of population living in multidimensional poverty (Indicator 1.2.2): The article mentions a decrease in multidimensional poverty in Latin America from 34.4% in 2014 to 20.9% in 2024.

2. Indicators for SDG 10 (Reduced Inequalities)

   • Gini coefficient (Indicator 10.2.1): The article explicitly mentions this indicator, stating that “Mexico’s Gini coefficient… decreased from 0.50 to 0.43.”
   • Proportion of national income received by the bottom 10% and top 10% of the population: While not an official SDG indicator title, this data directly measures income distribution. The article states the poorest 10% in Mexico receive 2% of income, while the richest 10% control one-third.

3. Indicators for SDG 8 (Decent Work and Economic Growth)

   • Real minimum wage levels: The article uses the “135% in real terms” increase in Mexico’s minimum wage as a key indicator of progress.
   • Proportion of informal employment in total employment (Indicator 8.3.1): The article provides this statistic for the region, noting that “47% of the region’s employed population was working on an informal basis.”

4. Indicators for SDG 4 (Quality Education)

   • Completion rate (secondary education) (Indicator 4.1.2): The article implies this indicator by stating its inverse: “28% of the Latin American population aged 20 to 24 had not completed secondary school.”

5. Indicators for SDG 5 (Gender Equality)

   • Female labor force participation rate: This is an implied indicator. The recommendation to “increase young women’s participation in the job market” suggests that this rate is a key metric for measuring progress toward gender equality in the economy.

4. Summary Table of SDGs, Targets, and Indicators

Source: mexiconewsdaily.com