Reuters.- When the Coronavirus arrived in Chile and ended up abruptly with the work of Lorena Rodríguez, the 47-year-old nanny made the painful decision to insist on her jewels- register them from previous decades- to have cash.
Like more than half of Latin Americans, she worked in the informal sector taking care of two children in a luxury area of the coastal city of Valparaíso, but living without trouble with income that with those of her husband reached about 700,000 pesos($ 905) per month.
Suddenly, concerned about the risk of Rodriguez to spread on the bus trip, the family stopped giving him a job in March.
Follow the information about the economy and business in Forbes Mexico
Without a contract, he could not receive benefits such as unemployment subsidy or social support, even though he lives in one of the richest countries in the region.An emergency payment of 100,000 pesos (126 dollars) of the government soon was exhausted, forcing her to go to the pawn house.
"It was like something already last, how to go to this," said Rodríguez, who changed his rings and bracelets for a loan of 340,000 pesos to keep her and her husband, a retired member of the Armed Forces.
"I had a stable job, I could live quite well, without worries about the least (...) I think this never ends."
Millions of people from the middle classes of Latin America are being dragged back into poverty, because COVID-19 has exposed the fragility of well-being networks and the lack of financial resources of governments.The region's labor market has been more affected than anywhere in the world.
After the economic stagnation and crises of the 1980s, Latin America had seen its middle class prosper thanks to the rise of raw materials that promoted growth in the 2000s and helped take 60 million people out of misery.
Now, the 650 million region will see its economy to contract more than 9% this year, according to UN estimates, the worst collapse of the activity in the developing world.
Poverty will return to 2005 levels.
Many economists affirm that the crisis has revealed the indifference of Latin America against weaknesses that are historical: the dependence of low productivity sectors such as mining and agriculture, the inability to incorporate more workers into formal jobs and the lack ofEffective fiscal systems to redistribute the wealth concentrated in a small elite.
"This crisis should serve as a call for attention to mobilize against the disparities and gaps that have resulted in an increasingly fragile world," said Argentina's Foreign Minister Felipe Sola, at a recent G20 meeting.
According to Asier Hernando, regional director of the Oxfam beneficial organization, the pandemic could push 52 million people more to poverty and leave another 40 million unemployed.Indigenous women and groups will be specially affected.
“What happens with Latin America is that you have no mattress.If you fall, you fall a lot, ”she said."That can break the social contract of the region and could be a few years of enormous social conflict."
After protests in several South American countries last year, pandemic has once again highlighted hunger, inequality and lack of state support.
In Chile, where 2019 protests became violent, the recession is resurrecting anger.In Peru, Congress tried to dismiss the President and the Minister of Economy for the lack of support for small businesses.In Venezuela, which was already in a spiral of poverty before COVID-19, protests on scarcity have increased.
Also read: this is what companies do against COVID-19
Boom and fall
The virus was delayed to reach Latin America, but hit hard.
Five of the 10 most infected countries in the world are from the region, in which there have been 34% of the world's deaths, although it only has about 8% of the population.
Epidemiologists cite poverty as a cause.
With up to 58% of workers in the informal sector, according to the International Labor Organization (ILO), many cannot put a quarantine or starve.
About 2.7 million companies, or almost 20% of companies, will close, according to the Economic Commission for Latin America and the United Nations Caribbean (ECLAC).The ILO says that 34 million people have already lost their jobs.
Only 12% of Latin American workers have the right to receive unemployment payments, compared to 44% in North America and Europe.
The situation has exposed an army of autonomous workers and budding entrepreneurs, which could harm growth for years."There are two months that I could not pay my daughter's school," said Goodny Aiquipa, a 36 -year -old clothing merchant in the Peruvian capital, Lima.
His parents had moved from the field to work as street vendors.But she was able to build a house, pay a private education, vacations and plan the purchase of a car.
Now the outbreak in Peru - the most deadly in the world by number of inhabitants - forced her to close her shirt store.“Light and water I am late for a month.What I had to pay for the rent of my premises I spent on food, ”she said.
The poorest have been the most affected in terms of loss of jobs, while almost eight out of ten people already lived with a lower income of the poverty threshold, said Alicia Bárcena, executive secretary of ECLAC.
"It is very difficult to talk about a middle class when these people are very vulnerable," said Bárcena.
A school closes
Subscribe to Forbes Mexico
Regional governments also lack the financial means to emulate the stimulus packages of the United States or Europe.Most of them have low fiscal income and a high debt.
In Guatemala, where social spending is one of the lowest in the region, businessmen Aura Cartagena and Erwin Pozuelos waited in vain for financial support.
To finance their school in Guatemala City, the couple indebted and sold their cars and properties to pay the 25 employees, before closing their doors.
"Right now we don't have a single property that is solvent, everything is indebted," said Cartagena, 51, in the small house to which the family moved, containing the tears.
A series of large companies - from the main airlines to energy companies - had to fire personnel or close.
Economists warn that the crisis will make millions of people stop working on their own to move to informal jobs with lower salaries, less benefits and less protection.
Even in Mexico, the second largest economy in the region, the leftist government of Andrés Manuel López Obrador has avoided a generous rescue, due to the concern for its finances.It is expected that up to 10 million people, many of them from the Mexican middle class, fall into poverty, according to analysts.
Outside a kitchen in Mexico City, Carlos Alfaro, a 51 -year -old driver from Uber who also had a cleaning business, waits for a stew, rice and bread for his 77 -year -old mother and two children.
The work disappeared forcing him to look for aid."I never imagined that I would have to come to do this," he said.
The United Nations World Food Program predicts that 16 million people in the region could face a serious food shortage this year.
In Brazil, the largest economy in the region, the extreme right government of President Jair Bolsonaro abandoned the austerity policies for the social aid that in the short term reduced poverty.
Despite Brazil's social expenses, which even the government admits that they cannot sustain, workers seeking to upload on the social scale are going through difficult times.
Douglas Felipe Alves Nascimento, 21, moved to Sao Paulo at the beginning of the year to work in a textile company after years of part -time work in construction.
Follow us on Google News to always keep you informed
The salary was enough to rent a room, buy basic household items and start finishing the baccalaureate, but when the COVID-19 hit, it was one of the first to lose its job.
In July, he had sold his things to cover the unpaid rent and went to a Catholic mission to get food and coat clothes.
"Everything I had achieved in those three months of work was lost in a month of pandemic," he said.
