Latin America is the region with the second highest inequality in the world after sub-Saharan Africa, with Mexico, Brazil and Chile being the countries with the highest income concentration and, therefore, the highest level of inequality, according to the Regional Human Development Report. Management of the United Nations Development Program.
“Despite decades of progress, the region remains the second most unequal in the world, and income inequality in countries in Latin America and the Caribbean (Latin America and the Caribbean) is greater than in other regions with similar levels of development,” the agency said. Inequality, like poverty, is multidimensional and transcends income.
Among Latin American countries, Chile, Mexico and Brazil had the highest concentration of income in 2019: 10 percent of the population captured more than 57 percent of the national income, and the highest one percent, more than 28 percent.
In Mexico, the top 10 percent of the population captured 59 percent of the national income, while the top 1 percent captured 29 percent between 2000 and 2019
In contrast, Uruguay, Argentina and Ecuador had the lowest levels of income concentration in the region between 2000 and 2019, although they are still high in absolute terms, and the concentration in Argentina and Ecuador appears to have decreased since 2010.
Given that Latin America is mired in a “high inequality and low growth trap”, these phenomena interact in a vicious cycle that limits the ability to advance on all fronts of human development. Besides the high level of inequality, the region is also characterized by volatile and generally low growth, as a result of low productivity.
Another distinguishing feature among the countries of Latin America and the Caribbean is high perseverance and low mobility in the region, which is not limited to education. Data from Brazil and Mexico show that intergenerational occupational persistence is higher in these countries than in the United States.
He explains that “low incomes and occupational mobility can dampen educational mobility by reinforcing the idea of low returns to investment in human capital, while high levels of educational attainment can continue to determine achievement in higher-paying, higher-income occupations.”
For Ernesto O’Farrell, president of Grupo Bursamétrica, Mexico’s inequality is the product of low growth and lack of investment, while the federal government’s social programs have made no difference.
“If there is no growth, there is no investment and there are not enough jobs, and as a result poverty increases,” he said, warning that inequality will continue to increase “as long as conditions remain the same, where trust does not return because it does not respect the rule of law, because it is still There are some public policies against private investment.”
José Luis de la Cruz, director of the Institute for Industrial Development and Economic Growth (IDIC), said that to tackle inequality, the first ingredient needed is formal job creation. Brazil and Mexico in particular, have very large economies with high informality, generating poor quality jobs with scarce social benefits.
“The second factor is to talk about a generation of companies that promote shareholders, companies with greater added value, and social responsibility that allow greater social mobility for families. The third element is the educational system to generate people who through knowledge can have this social mobility; as Public spending should have more social meaning, and not in relation to the welfare issue.”
With information from Guillermo Castañares.