COSTA RICA NEWS — High unemployment and only tiny salary increases this year have contributed to in increase in the percentage of persons living in poverty, the National Census Institute (INEC) has found. Poverty increased from 20.7% last year to 22.4% in 2014.

Photo from Lita's Blog
Photo from Lita’s Blog

The survey was conducted in July of this year. The sheer size of the survey, 33,000 households containing a quarter of the population (1.1 million) assures accuracy. Institute manager Floribel Mendez noted that the increase could have economic impact even beyond the poor families.

The loss of income means a lack of resources to buy goods and services, she notes, the ripple effect resonating with everything from neighborhood pulperias to international retail chains. Putting even more of a squeeze on these families is that the cost of basic goods and services has grown 5%.

The glut of persons seeking jobs has held wages nearly frozen, especially in private enterprise. Wages actually dropped 0.4% from last year. Since powerful government unions exert pressure to raise public workers salaries according to inflation,, the situation is probably worse than even the figures indicate.

In fact, Annia Chaves, coordinators of the survey, said that the so-called informal sector of the economy actually suffered a sharp decline of 8% in income. The informal sector are those who work in such jobs as house to house sales and, moreover, receive none of the social benefits such as Social Security.

The Chinchilla Administration attempted to relieve the situation by scholarships for the poorest students and salary subsidies but even this failed to halt the decline. As can be predicted, some areas such as the San Carlos and Upala cantons were hit hardest with a 26.8% poverty level.

Comment: The increasing job gap could force the Solis Administration to adjust its political ideology to become more business-friendly. The left of center Citizen Action Party (PAC) has traditionally treated private enterprise at arm’s length but could woo international companies more aggressively.

Article by

Stay up to date with the latest stories by signing up to our newsletter, or following us on Facebook.