Although income inequality has fallen in recent years, Latin America remains the most unequal region in the world. In 2014 the richest 10% of people in Latin America had amassed 71% of the region’s wealth. If this trend continues, according to Oxfam’s calculations, in just six years’ time the richest 1% in the region will have accumulated more wealth than the remaining 99%.
From 2002 to 2015, the fortunes of Latin America’s billionaires grew by an average of 21% per year —an increase that Oxfam estimates is six times greater than the growth of the whole region’s GDP.
Much of this wealth is held offshore in tax havens, which means that a sizeable portion of the benefits of Latin America’s growth are being captured by a small number of very wealthy individuals, at the expense of the poor and the middle class. This extreme income concentration and inequality is also confirmed by analysis of the tax data available on personal income in selected countries of the region.
Gender inequality: a cause and a consecquence of income inequality
And yes, there are more poor women than men in Latin America and the Caribbean. Women make up the majority of low-paid workers and those in the most precarious forms of work and who face disproportionate responsibilities for unpaid care work, which restricts their chances of taking up leadership positions or professional or technical jobs.
On average worldwide, women spend nearly 2.5 times more time on unpaid work than men each day and studies have shown that their responsibilities for unpaid care work do not reduce as they increase their participation in the labor market.
Gender inequality is both a cause and a consequence of income inequality. The IMF recently found that in countries with higher levels of income inequality, gender inequalities across health, education, labor market participation and representation were also higher. The gender pay gap, where women earn less than men for doing the same jobs, is also found to be higher in more unequal societies and this is compounded by occupational segregation and unpaid care responsibilities. Women get much less of the economic pie than men do, and the very highest incomes are reserved almost exclusively for men – 445 of the 500 richest people in the world are men.
Youth suffer most from economic crisis
‘We shouldn’t lose sight of the fact that recovery is not universal and that almost 43 percent of the global youth labor force is still either unemployed or working yet living in poverty. It’s still not easy to be young and starting out in today’s labor market.’
Although the effects of the 2008 global recession have varied widely, youth are consistently the most affected. Moreover, youth have been hit harder than in previous recessions. A study of 17 middle-income countries found that youth experienced the largest rise in unemployment rates, which was even higher for young women, youth members of another marginalized group, and those living in rural areas. In 15 of the 17 countries included in the study, wage rates also decreased for youth.
In Latin America, despite relatively low overall unemployment rates over the past decade, youth represent over 40 percent of all unemployed people, despite comprising only 18 percent of the population.
How to tackle inequality
What is needed is a multi-pronged strategy to rebalance power within global and national economies, empowering people who are currently excluded and keeping the influence of the rich and powerful in check.
This is necessary for economies to work better in the interests of the majority and in particular in the interests of the poorest people, who have the most to gain from a fairer distribution of income and wealth. Governments in particular must work for citizens, representing the will of the people rather than the interests of big business, and must tackle extreme inequality.
This goes hand in hand with effective governance. The public interest should be the guiding principle of all global agreements and national policies and strategies.
Photo: Jesús Aurazo Dávila - Oxfam
- Alicia Bárcena y Winnie Byanyima (2016), América Latina y el Caribe es la región más desigual del mundo. ¿Cómo solucionarlo? (https://blogs.oxfam.org/es/blogs/16-03-16-america-latina-y-el-caribe-region-mas-desigual-mundo).
- Rosa María Cañete Alonso (2015), Privilegios que niegan derechos, Desigualdad extrema y secuestro de la democracia en América Latina y el Caribe. (https://www.oxfam.org/es/informes/privilegios-que-niegan-derechos).
- Jennifer Glassco y Lina Holguin (2016), BOLETÍN INFORMATIVO DE OXFAM, JOVENES Y DESIGUALDAD, Es tiempo de apoyar a los jóvenes como actores de su propio futuro. (https://peru.oxfam.org/sites/peru.oxfam.org/files/file_attachments/J%C3%B3venes%20y%20desigualdad_2_0.pdf).
- Deborah Hardoon (2017), Una economía para el 99%, Es hora de construir una economía más humana y justa al servicio de las personas. (https://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-economy-for-99-percent-160117-es.pdf).