Pandemic crisis has thrown 400,000 people into poverty

Por TPN/Lusa, in Economía, Negocios · 24-06-2021 18:00:00 · 0 Comentarios

Around 400,000 people have fallen below the poverty line due to the crisis caused by the Covid-19 pandemic, widening the gap between the rich and the poor in Portugal.

"Compared to the scenario without crisis, 400,000 new individuals fell below the poverty line, defined as 60 percent of the equivalent median income, increasing the at-risk-of-poverty rate by 25 percent as a consequence of the Covid-19 pandemic," concluded the study by the Social Observatory of the "la Caixa" Foundation, authored by the Center of Economics for Prosperity (PROSPER) of the Catholic University of Lisbon.

According to the document to which Lusa had access, which considers that the government's measures have partly minimised the increase in poverty and inequality, the pandemic resulted in "substantial loss of income for the Portuguese population", with the median annual income falling from 10,100 Euros in the scenario without crisis to 9,100 Euros in the scenario with crisis.

Furthermore, the crisis caused by Covid-19 "had asymmetric effects", as the lower-middle classes, the Algarve region and people with schooling up to ninth grade "were the groups most affected by this crisis, with losses clearly above the national average", the study said.

According to the study, most of the people most affected by the crisis were already in the lower half of the income distribution in the non-crisis scenario, which caused inequality to increase.

"The results show that the pandemic led to a staggering 25 percent increase in poverty over one year when comparing the with and without crisis scenarios, jeopardising the progress made over the last twenty years and reversing the trend of continued poverty reduction that began in 2015, when the poverty rate was 19 percent," the document states.

The study, authored by Joana Silva, Anna Bernard, Francisco Espiga and Madalena Gaspar, also points out that the protection policies implemented by the Government in 2020 have mitigated the increase in poverty and inequality in Portugal.

"Without their implementation, the initial eight-week confinement would have produced approximately the same impact on poverty and inequality as that calculated for a full year," the PROSPER document adds, advancing that the simplified lay-off scheme, aimed at employees, and the extraordinary support for self-employed workers "were effective in mitigating the impact of the crisis."

"The pandemic, still ongoing, and the resulting economic crisis, bring with them substantial budgetary challenges, since government efforts of great magnitude may be difficult to sustain for a prolonged period," warns PROSPER, for whom it is "clear that without a strong recovery, a reduction in protection policies can have a substantial negative impact on poverty and inequality."

The "Social Observatory of the la Caixa Foundation" is a new project that is being developed in Portugal with the aim of making diagnoses on the social reality in the social, educational and cultural areas.



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