The inequality of income distribution in Latin America went down between 2008 and 2015, thanks to the priority that certain countries granted to social development goals. However, the decrease rhythm became slower between 2012 and 2015, and the current levels remain too high to reach sustainable development, warned the Economic Commission for Latin America and the Caribbean (ECLAC).

Income distribution is just one of the dimensions of inequity analyzed in the annual report Social Panorama of Latin America 2016, presented in a press conference held in Santiago de Chile by the Executive Secretary of ECLAC, Alicia Bárcena. The survey also delves into the inequalities between men and women regarding the use of time, in the inequalities linked to the ethnic-racial condition, and the ones that become evident during the different phases of the cycle of life.

“Inequality is a historical and structural characteristic of Latin American societies, showed in several vicious circles. One of the goals of the 2030 Agenda for Sustainable Development is to reduce inequality, a goal that was subscribed by every country in the region in 2015. The agenda seeks to leave no one behind”, said Barcena.

The Gini coefficient for personal incomes in 2015 showed an average value of 0.469 for 17 countries in Latin America (0 represents the lack of inequality and 1 maximum inequality), which is an elevated level. Even though the index decreased an annual average of 1.2% between 2008 and 2012, the decrease rhythm dropped to half between 2012 and 2015 (0.6% per year).

These advances were promoted by an improvement of labor incomes in the sectors with lowest income, thanks to the implementation of active policies such as the formalization of employment and the real increase of minimum wages in several countries, explains ECLAC. The rise of monetary transfers to lower income sectors was also rather remarkable.

Nevertheless, a complementary analysis of the functional distribution of income in the region indicates that recent distributive improvements were not necessarily linked to a more equal distribution of capital and work.

This edition of Social Panorama also draws attention to the structure of property (of physical and financial assets) as a fundamental factor for the reproduction of inequality in the region. Using a case study, wealth distribution is confirmed to be even more unequal than people’s current income.

Therefore, ECLAC insists on the need of promoting a progressive structural change in Latin America and the Caribbean that generates quality jobs –with rights and social protection-, higher levels of productivity and better retributions of the labor factor.

The report also states that women remain overrepresented in the lower income deciles, and that the total number of hours worked (including non-paid domestic and caretaking work, as well as paid work), is higher among them than among men, a fact that limits their economic autonomy.

Women use at least a third of their time developing non-paid domestic and caretaking chores, while men use only 10%. In addition, the economic value of non-paid work developed in households and not included in the GDP, equals around a fifth of it.

The ethnic-racial condition is another structural inequality variable in Latin America, says ECLAC. There are around 130 million people in the region who are African descendants (2015), which equals close to 21% of the entire population. Even though Brazil and Cuba have 91%, the African descendant population has presence in every Latin American country. Institutions and government mechanisms have been created in 14 of these countries, to tackle racism and promote racial equality, and regulations to protect their rights have been strengthened.

This group is also overrepresented in the lower income level, and endures strong inequalities in every area of social development, expressed in higher maternal and child mortality rates, higher teenage pregnancy and unemployment rates, and lower wages (compared to non-African descendant groups), reveals the study.

As regards social expenditure, the report states that it reached its higher level in 2015: 10.5% of the GDP for the central government and 14.5% of GDP for the public sector (simple regional average). Social protection (5%), education (4.6%) and health (3.4%) remain the variables of greatest importance regarding the GDP.

However, social expenditure budgets for 2016-2017 register contractions in most countries, while GDP estimations show moderate growth. Considering this situation, ECLAC calls to protect and be cautious in terms of social policies financing to provide sustainability to the advances achieved and face current challenges.