Latin America: Chile and Mexico lead OECD in income inequality

Chile and Mexico have the highest level of income inequality among the 34 countries in the Organization for Economic Co-operation and Development (OECD), the group announced on Jan. 23. The other OECD members with the widest gap between rich and poor are Israel, Turkey and the US, according to the OECD’s new report, Reducing Income Inequality While Boosting Economic Growth: Can It Be Done? (PDF), Chile and Mexico are the only Latin American countries in the organization, which is mostly composed of higher-income nations. The US is the high-income nation with the worst record on income inequality.

“Rising inequality is one of the major risks to our future prosperity and security,” OECD chief economist Pier Carlo Padoan warned in a statement. With the global downturn continuing more than three years after the September 2008 financial crisis, the OECD is pushing member countries to use tax reforms to reduce the level of inequality and to spur growth. Specifically, an OECD report released on Jan. 17 advised Chile to reduce poverty and create a tax system that does more to redistribute income. The report also called on Chile’s government “to make more of an effort to improve the quality of education and to guarantee a more equitable access to high-quality education”—the same reforms that a militant student movement has been pushing for since last spring.

An OECD report in May 2011 noted that in Mexico the gap between those with the highest wages and those earning the minimum wage has been increasing since 1985. (AFP, Jan. 17, via Prensa Gráfica, El Salvador; Huffington Post, Jan. 23; La Jornada, Mexico, Jan. 24)

From Weekly News Update on the Americas, Jan. 29.

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