The world is in recovery. There is no doubt that recent figures show this, a mixture of low bases of comparison, but also due to impulses coming from the private sector, supported by the unprecedented fiscal and monetary stimuli applied by the authorities. However, and as could not be the exception, there is a heterogeneous recovery between high-income and underdeveloped countries, mainly due to the health situation and the progress of vaccination processes, but also due to differences in the basis existing before the pandemic was declared. Moreover, within the emerging countries (within the developed ones too, mind you) there are also inequalities in the recovery between sectors, with a part of the population that has hardly suffered from the recession, while others will probably suffer the scars long after it is over.

In this context, our country is no exception. Growth data at the margin are encouraging, although, as we wrote in our previous column, there are still several sectors that are still in need of improvement. The labor market, in particular, will take time to recover and may never fully recover as we know it. In a recently published report, the OECD estimates that the local labor market will be one of the slowest to return to pre-pandemic levels, recovering only around 2023. And within this, the least skilled, transient, younger, female and automated workers are likely to face structural changes that mean they cannot be easily relocated to other sectors, requiring government assistance or state programs to facilitate retraining or, quite simply, direct transfers.

I mention this because we recently learned the results of the CASEN survey. Perhaps overshadowed by the political processes that Chile is currently facing, in my opinion it did not arouse the interest that its results should have meant. Without wanting to go into methodological explanations (which there are to consider compatibility with previous editions), the poverty rate in the country rose from 8.6% in 2017 to 10.8% in 2020, which would reach more than 2.1 million people. Of these, just over 830 thousand, 4.3%, live in extreme poverty. That is, their income, in a four-person household, does not exceed $306,355. For a two-person household, $188,584. At least to me, this is shocking. It is true that, thanks to state aid, the number of poor and extremely poor people increased less than it "should" have. It is true that, within the region, we are one of the countries in which this percentage increased the least. But it seems to me that this is the least that the richest country in Latin America should do for its inhabitants in a context as complicated as the one we are experiencing. I am not going to fall into the cliché that most of these columns have, saying that poverty has a face and is not just a number, because I know that, I lived it and nobody has to come and teach it to me. For that very reason, it is a national shame. Every poor person in the country, man, woman, young, old, born here or immigrant, left or right, is a defeat for our society. 

Therefore, the recovery of the labor market is vital to reverse these numbers. Several studies conclude that in order to reduce poverty and inequality (which we will talk about in another column), more and better jobs must be generated, but also skilled workers who have the conditions (childcare, good public transportation, etc.) to be able to complete those occupations. This is not only a task or discourse of the presidential candidates, it is a responsibility that we all have. 

Nathan Pincheira

Chief Economist of Fynsa