San José, Costa Rica, since 1956

Annual Survey Finds Slight Drop in Poverty

TO the surprise of many, includingPresident Abel Pacheco, poverty in CostaRica has not risen over the last year asmany had predicted it would, but has fallenby almost one percent, according tothe annual Household Survey by theNational Statistics and Census Institute(INEC), released Nov. 4. This statisticaldrop comes despite rising inflation, lesssocial spending, lower individualincomes and higher prices for basic consumercommodities.“With what we have received thisyear in immigration, with the issue ofpetroleum, with the hurricanes, with allthe tragedies, I believe it is heroic of theCosta Rican people to have achieved areduction in poverty,” Pacheco told thedaily La Nación while in Argentina forthe Summit of the Americas. “It surprisesme that it has dropped, and I believe inCosta Rica now more than ever.”The survey, which tracks social andeconomic indicators such as employment,the size of the labor force, incomes and thepoverty level, has been conducted everyyear since 1987.“The results were surprising,”University of Costa Rica economist JuanDiego Trejos told The Tico Times.ACCORDING to this year’sHousehold Survey, the percentage ofhomes in poverty fell from the 21.7%recorded in July 2004 to 21.5%, whichtranslates into 237,000 impoverishedfamilies. The percentage of homes inextreme poverty, which are included inthe 21.5%, remained at 5.6%, the same aslast year.For the poverty line, INEC used anurban monthly income of ¢43,350 ($88.47)per person and a rural monthly income of¢34,665 ($70.74).The poverty line is based on the canastabásica (basic food basket) – an establishedlist of staple foods considered theminimum necessary for a family’s survival– and the cost of some non-food necessities.Families whose household income isequal to or less than the cost of the basicfood basket per person are considered inextreme poverty.Rocío Sáenz, Minister of PublicHealth and the head of the President’sSocial Council, said at the press conferencefollowing the President’s weeklyCabinet meeting Tuesday that the slightdrop in poverty was a result of Pacheco’spolicies.“This survey shows that the quality oflife has been maintained in Costa Rica,thanks to government interventions,”Sáenz said.THE Health Minister added that, withoutgovernment policies such as fiscal austerity,the results could have been worse,particularly in the absence of the taxreform package that Pacheco says woulddistribute the nation’s wealth more equallyand benefit the poor. The President hasbeen pushing for the tax plan for the lastthree years, but it remains tied up in theLegislative Assembly.Sáenz also said the survey showed thatthe administration’s efforts to combatpoverty are reaching rural areas, using asexample the decrease in poverty, whencompared to 2004, recorded in the largelyrural regions of Brunca (8.4%), Chorotega(3.8%) and Huertar Norte (2.7%).Trejos, however, explained the steadypoverty rate as a result of the “added workerphenomenon.“When incomes decline, the familysends more family members to work. Forthis reason we saw a large rise in employment,”Trejos said. “This rise in employmentcompensated for the deterioration inindividual incomes. So because familyincomes didn’t fall, poverty didn’t rise.”ACCORDING to the survey, whileindividual incomes fell by 3.7% over thelast year, household incomes grew 2.8%.INEC researchers shared Trejos’ theoryand attributed the rise in householdincomes in the face of lower individualearnings to an unusually large jump in thenumber of people in the labor force. Thesurvey found that the nation’s labor forcehad grown by 134,300 people over the lastyear to a total of 1.9 million people, a 7.6%increase. This compares to a 3% averagegrowth over the last five years.Within the workforce, the number ofemployed persons grew 7.5% to 1.8 millionpeople; however, the number of unemployedgrew by 9.8%, or 11,000 people, to a total of126,000 unemployed workers. This resultedin an unemployment rate of 6.6%, almostequal to last year’s rate of 6.5%.RESEARCHERS also attributed thejump in the size of the labor force to a morethorough study and more inclusive resultsthan last year, thanks to more experiencedand skilled researchers.According to Trejos, further evidenceof the “added worker phenomenon” is thatwhile women make up 35% of the totalemployed population, they constituted51% of the increase in employed workers.In addition, the male sector of the workforce grew 5%, while the female sectorgrew 12.5%.Young people between the ages of 12and 17 and people older than 60 years makeup the age groups whose participation in thework force grew most substantially.When faced with lower incomes andhigher costs, Trejos said, “families sendtheir secondaries, which are young peopleand women, those who are (normally) inthe home instead of in the (labor) market.”HOWEVER, Trejos pointed out, theincrease in women in the workplace doesnot imply a more equitable labor market.“It’s not that there are more workopportunities (for women),” Trejos said.“It is an increase in precarious work, low -quality work and partial workdays.”According to the survey, the percentageof people who work fewer than 15hours a week rose from 9.1% to 10.7% ofthe working population. These part-timejobs account for one third of the growth ofemployed women.

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