Poverty in Argentine

Introduction

In the Argentinean Federation, poverty refers to the economic situation of a family or a separately living citizen, in which available resources and funds (money, goods, property) are extremely inadequate to meet their minimum needs. The main federal laws regulating the definition of poverty are: On the subsistence minimum in the Argentinean Federation, On state social assistance, On the procedure for recording income and calculating the per capita income of a family and the income of a lonely resident for recognition as poor and providing them with state social assistance (Garcia-Diaz and Prudencio, 2017).

1. Historic Levels of Poverty

During the 1998 – 2005, the minimum wage was increased seven times, including in 2005. twice: from January 1 – to 720 peso., From September 1 – to 800 peso. The average monthly salary was 8550 peso last year. and exceeded the 1998 level. in 3,9 times. Real wages grew 1.9 times over the same period. Conducted in 1998-2005gg. Measures to strengthen the financial base of the pension system have made it possible to improve the financial situation of pensioners. The real size of pensions for this period increased by 1.7 times.

1. Theme 1 and poverty evolution

At present, in Argentina, the poverty line is the level of the subsistence minimum. According to the law, the poor (poor) citizens eligible for social support are families (citizens) who have an average per capita income below the subsistence minimum established in the corresponding constituent entity of the Argentinean Federation. The subsistence minimum is understood as the valuation of the consumer basket, which includes a minimum set of food, non-food items and services needed to preserve human health and ensure its livelihoods (Erenstein, Hellin, J. and Chandna, 2010).
The social policy pursued in the Argentinean Federation in recent years has allowed raising the level and quality of life of Argentinean citizens. Over the past five years there has been a steady increase in real monetary incomes of the population. Real disposable money income of the population is now higher than in 1998, more than 1.7 times. (Garcia-Diaz and Prudencio, 2017) According to preliminary data of Rosstat in 2005, this indicator was 108.8%. In nominal terms, the monetary incomes of the population increased in 2005. in comparison with 1998. in 3,4 times and amounted to 7848 peso. The growth of incomes is largely ensured by measures taken by the Government of the Argentinean Federation to raise wages, pensions and allowances (Erenstein, Hellin, J. and Chandna, 2010).

1. Theme 2 and poverty evolution

Since March 1, 2005, the size of the basic part of the old-age labor pension has been increased by one third and amounted to 900 peso. per month, which is equivalent to an indexation of 36.4%. Since August 1, 2005, all the sizes of pensions have been indexed 1.06 times, while an additional increase in the insurance part of the pension was made 4.8% (Walker et al. 2014) (Walelign et al. 2016). The average size of the old-age labor pension in 2005 compared to the previous year increased by 24.7% and at the end of 2005 amounted to 2764 peso. In order to strengthen the material support of the family in connection with the birth and upbringing of children, the amount of state benefits for citizens with children has been increased. Since January 1, 2005, the size of a one-time allowance for the birth of a child has been increased from 4.5 to 6 thousand peso, and since January 1, 2006 – up to 8 thousand peso. Also since January 1, 2006, the monthly allowance for the period of leave to take care of a child has been increased to reach the age of 1.5 years from 500 to 700 peso (Garcia-Diaz and Prudencio, 2017).

The new procedure for providing state social assistance to citizens, introduced from January 1, 2005, by Federal Law No. 122-FZ of August 22, 2004, also contributed to raising the financial situation of certain categories of the population. Natural benefits to citizens have been replaced with monthly cash payments (EJV) and the provision of a set of social services. As of January 1, 2005, about 14.5 million people had the right to receive state social assistance from the federal budget, and about 35 million people from the budgets of the constituent entities of the Argentinean Federation (HealthCare.Gov 2014). In 2005, 208.6 billion peso was spent for this purpose in the federal budget, and 92.6 billion peso in the regional budgets. These measures made it possible to withdraw from the number of people with the least income a significant part of veterans and disabled people who received an increase in the pension from 600 to 1998 peso per month (Garcia-Diaz and Prudencio, 2017).

The differentiation of the population by income level has slightly decreased. Per capita monetary incomes of 10% of the wealthiest citizens exceeded the incomes of 10% of the least well-off population in 2005 by 14.7 times as against 15 times in 2004. The number of people who have incomes below the average per capita subsistence minimum, calculated on the basis of the effective in 1998-2004. consumer basket, was in 1998 about 42 million people or 29% of the country’s population. Every year, the number of poor people declined, in 2004 the number of poor citizens was 25.5 million people or 17.8% (Pou et al. 2017). In general, for 1998-2005 the number of people with incomes below the subsistence level decreased by more than 19 million people. Despite the positive changes in the incomes and living standards of the population, the scale of poverty is great. The number of poor in 2005 was about 26 million people, or 18.4% of the country’s total population (when calculating the subsistence minimum based on the new updated consumer basket) (Mussard and Alperin, 2008).

The specificity of Argentinean poverty is that, in addition to traditional social poverty (large families, incomplete families with children and other socially vulnerable groups of the population), economic poverty is widespread when able-bodied citizens can not secure a socially acceptable level of well-being (Cruces and Wodon, 2007). Employed in the economy, citizens account for 58% of the total number of poor people. The high representation of able-bodied citizens among the poor is determined, first of all, by low wages. About 30% of the poor are families, where all the able-bodied have regular paid work in agriculture, trade and the budget sector. Significant regional differentiation in terms of poverty; for example, in 2004 the number of citizens with incomes below the subsistence minimum was 7% of the population of the capital cit, and in other small cities- 83%. At the same time, in the territorial context, poverty is concentrated in rural areas and small towns (Lustig, Pessino, and Scott, 2014).

1. Current Levels of Poverty

Currently, according to the information available to the Ministry of Health and Social Development, all regions of the Argentinean Federation retain the targeted principle of assigning a monthly allowance for a child. In many regions, benefits have been introduced for children from large families, children with disabilities, children whose parents are pensioners or disabled (Meloni, 2014). It is envisaged to strengthen the existing system of payment of a lump-sum allowance at the birth of a child, a monthly allowance for the period of parental leave until the age of one and a half years, a monthly allowance for families with children. Poverty reduction is one of the main priorities of modern state policy in the Argentinean Federation (Lustig, Pessino, and Scott, 2014). Clear guidelines have been identified to solve this problem – to reduce the number of poor in the country by 2017 to 11-12% of the total population. In December 2005, the Government of the Argentinean Federation approved the Program of Social and Economic Development for the Medium-Term Perspective (2005-2008). One of the sections of this Program is devoted to the policy on poverty reduction (Meloni, 2014).

Improving the well-being of the population, reducing poverty and disparities in the income of the population is one of the five strategic goals of the Ministry of Health and Social Development of the Argentinean Federation. In the medium term, to achieve this goal, measures will be implemented to promote wage growth, improve pensions and develop pension insurance, and develop a system of state support for citizens in need of social protection, and strengthen the targeting of social assistance.

In order to reduce poverty among the working population, it is envisaged to continue carrying out measures to raise the minimum wage and the level of remuneration for employees of budgetary institutions, primarily doctors and teachers, for whom the issue of increasing wages is particularly acute (Cruces and Wodon, 2007).

Established from May 1, 2006, the minimum wage (1,100 peso) is about 30% of the subsistence minimum of the able-bodied population. Within the framework of the preparation of the forecast of the social and economic development of the Argentinean Federation until 2017, the Ministry of Healthcare and Social Development of Argentina has proposed a variant of a step-by-step increase in the minimum wage (MROT), which will achieve in 2017, the ratio between the minimum wage and the subsistence minimum of the able-bodied population at the level of 50%.

6. Conclusion

In order to improve the organization of the wages of workers of federal state institutions, increase the motivation of workers in budgetary sectors to qualitative work and create the conditions for attracting high-qualified personnel to health care, education, culture and science, it is envisaged to transfer to the formation of a wage system taking into account the specifics of economic activities. The reform of the remuneration of workers in budgetary sectors will be linked to the transition of the relevant institutions to new organizational and legal forms.

The development of the labor market, the increase in the efficiency of its functioning, and the reduction of unemployment will also help to solve the poverty problem. These tasks are to be fulfilled on the basis of increasing access of unemployed citizens and the unemployed to services in the field of employment promotion. The intensification of the employment policy will be aimed at increasing the volume and improving the quality of services in the field of promoting employment and protecting against unemployment.

The implementation of this direction should be implemented on the basis of the development of a favorable investment climate in depressed and underdeveloped regions with a high level of poverty, improving the quality of human capital (retraining, advanced training). These activities, if necessary, can be supplemented with programs to promote labor migration beyond the region of permanent residence, promote the development of small businesses and other measures that promote the economic activity of able-bodied poor citizens.

Priority national projects in the field of health, education, agriculture and provision of housing for the population are currently being implemented in the Argentinean Federation. The activities envisaged in the framework of the national projects will contribute to the development of human potential, including the improvement of the well-being of the population and poverty reduction, the growth of the volume and quality of services rendered to the population, the development of small business, complementing the measures envisaged by the Program for the medium term.

References

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