This paper describes the significant fall in income experienced by a majority of the population in Latin America during the 1980s and how this also increased inequality. The sharp fall in the income of many households, who previously had been part of the middle-class, meant a rapid increase in the “new poor”. The paper considers the scale of the “new poor” and how they differed from the people who were already poor prior to the 1980s crisis. It also includes an in-depth study of the “new poor” in Argentina and a consideration of the differences between them and the structural poor in terms of unsatisfied basic needs.