Income Disparities in Latin America

Inequality among human beings has been an issue of concern from the ancient times. It has been considered ethically undesirable and many great thinkers in human history have sought to narrow the gap between the haves and the have-nots through their philosophy, teachings and efforts. Yet disparities amongst different groups of people have continued to exist in almost every country and society of the world. The last few centuries, especially since the dawn of the industrial revolution, have seen unprecedented growth in the creation of wealth. Unfortunately, this wealth has been divided most unequally, both within and across countries and regions with the result that vast sections of the world population have been deprived of the benefits of the creation of wealth and development. (UN Human Development Report, 2002. pp. 2-4) Latin America is one region where inequality is particularly pronounced in almost all respects-in terms of income, access to education, health services, water, electricity, political influence (voice), assets and opportunities. This paper focuses on the income disparities in Latin America1 and includes a discussion of the background and history of inequality in the region, its main causes, a review of the data about inequality in different Latin American countries and the trends, the consequences of high-income disparities, and the possible solutions for reducing the persistent inequality. Disparities in incomes on the basis of ethnicity and gender are also discussed.