Guardian: Latin America's income inequality falling, says World Bank
Region now has as many middle class people as those who are poor thanks to rapid growth in incomes, study reveals.
Income inequality is falling in Latin America even as it rises elsewhere in the world, according to a World Bank study that encourages government intervention to reduce the wealth gap.
Over the past 15 years, more than 50 million people have risen into the middle class, which is now – for the first time – about the same size as the population of poor in the region, says the report, which was unveiled on Tuesday. ...
... He said the main reason for the reduction in inequality is not a compression of income from the rich at the top, but because of a rapid growth in the incomes and spending power of those at the "bottom of the population pyramid".
About 30% of the region's population is now in the middle class, which the World Bank defines as those who have less than a 10% chance of falling back into poverty. This is similar to the proportion who are classified as poor. In between is the biggest group, the 38% who are considered "vulnerable" because they live just above the poverty line on an income of between $4 and $10 a day. ...
... The report, titled Economic Mobility and the Rise of the Latin American Middle Class, recommends improvements in public education and healthcare as a way of consolidating the upward mobility of the population. Currently, one of the biggest gaps is not in spending power, but in access to decent social services. In many countries, poorer families have no choice but to put their children in low-standard schools and their sick in poorly-funded hospitals, while the middle class spend substantial sums on private education and health care.
The World Bank's president, Jim Yong Kim, emphasised the role played by the private sector, which he said creates 90 percent of jobs in developing countries.
But he said the great strength of the story in Latin America was that countries that have self-consciously focussed on reducing inequality have also experienced rapid economic growth. ...
