December 8, 2014 by Debra Gittler

INCOME INEQUALITY IS SHRINKING IN LATIN AMERICA

According to recent research, as reported in yesterday’s New York Times, income inequality is shrinking in Latin America. But no one is sure why. Nor are they convinced that this is a lasting trend.

When talking about ConTextos, I frequently reference that while Latin America doesn’t have the absolute poverty indices that exist in Africa, it does feature the worst income inequality in the world—particularly the countries in Central America.

You’d think news of change would be promising, but Eduardo Porter’s article “Income Gap Shrinks in Chile, For Better or Worse” paints a confusing picture that implies that, while the numbers are real, this inequality is cushioned by unsound efforts like money transfers and unsustainable international forces (China). Furthermore, it doesn’t look like it’s going to last.

Porter writes:

Latin America’s education boom has driven the proliferation of private colleges, some of which are of lower quality. The students may be of lower quality too — coming from families that received poorer elementary and high school education and are less prepared for college.

Together, these dynamics would reduce the skill level of newly educated workers, shrinking the wage premium they could command over those without a college education…

The World Bank argues that the only viable long-term path for Latin American economies is to increase productivity growth, investing in more skill-intensive industries.

And the only way to develop skill-intensive industries is with high(er)-skilled workers. Workers who are thinkers, problem-solvers and actors. Throughout Latin America (and the developing world, for that matter) we’ve seen enormous strides in improved educational policy that promotes child-centered methodologies to develop skills and competencies. And throughout Latin America (and the developing world) we’ve seen that policy doesn’t make it to the classroom, where instruction continues to be rote and mechanical.

This year will mark 10 years since I started working in Latin America. TEN YEARS. Wowser.

Eight of those years have been in El Salvador. There have been inklings of change in the education system. But nothing close to what needs to happen to develop the high-skill workers key to the region’s longterm economic success. (Not to mention peace, democracy and stability.)

Imagine if ten years ago, things had started right. The first graders then would be graduating high-school in the coming year or two. They could’ve been prepared as “higher quality” students ready to enter college to become high-skill workers. They could’ve. But they probably aren’t.

Debra Gittler
Founder and Executive Director.