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Jobs behind the sharp drop in Latin American poverty rates

‘Poverty reduction was most related to increases in job-related income for poor households,’ the UN agency’s report said.

UESLEI MARCELINO/REUTERS

Growing job income helped lift one million people out of poverty this year in Latin America and the Caribbean, helping reduce the region's poverty rate to the lowest in three decades, the UN's economic body for the region said in report on Tuesday.

Around 167 million people in Latin America and the Caribbean, or roughly 28.8 per cent of the total population, lived in poverty this year, a sharp drop from a decade ago, according to Santiago-based Economic Commission for Latin America and the Caribbean.

"Poverty reduction was most related to increases in job-related income for poor households," ECLAC said in its report. "Public and private transfers and other income helped, but less significantly, in reducing poverty."

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The export-dependent region's booming economic growth has helped cut poverty rates over the past decade. But the UN body recently estimated the region's economic growth would moderate to 3.2 per cent this year from 4.3 per cent in 2011 and about 6 per cent in 2010.

The UN body on Tuesday warned that the pace of poverty's fall was easing in the region, chiefly due to low-quality employment and a reduced focus on social spending. The rate dropped 0.6 percentage points in 2012 from 2011, slowing its pace from a 1.6-percentage-point fall in 2011 from 2010.

A decade ago, around 225 million people were considered poor, or 43.9 per cent of the total population at the time, according to the report.

The number of people in extreme poverty remained at 66 million in 2012, unchanged from 2011 levels.

The report provided no specific thresholds for poverty and extreme poverty in Latin America. But it added that in different Latin American countries, people living in poverty received substantially less than the median income.

Paraguay, the Dominican Republic and Colombia have some of the highest poverty rates in the region, while Argentina, Uruguay and Chile have the lowest, the report added.

ECLAC highlighted vulnerable jobs, extensively citing female domestic workers, as risks to further poverty reduction. A potential end to the increase in government social spending that occurred in past years was also underlined.

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The United Nations said earlier this month that the pace of hunger reduction in the region was ebbing due to weaker economic growth and high levels of inequality.

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