Wealth Concentration: Share of Total Income That the Top 1% Gets
Mexico and Peru's top 1% earn nearly a third of total income, far exceeding global norms.
There’s no way to sugarcoat it: the pandemic has only worsened the problem of global economic inequality. And perhaps nowhere is this more true than Latin America, which has been named the most unequal region in the world by, among others, the United Nations and IMF.
But while it’s not breaking news that global crises further inequalities and concentrate more wealth in the hands of the rich, it may surprise you to learn where this is most the case.
The Dominican Republic, Peru, and Mexico are all among the most unequal countries in the world by WID figures, with the top 1% of each country earning between 25-30% of the country’s total income.
Yes, you read that right. The richest Mexicans earn over a quarter of the money flow in the country; the richest Dominicans, nearly a third.
The three countries rank only behind Mozambique and the Central African Republic by this metric, but the problem is far deeper throughout the region. Brazil and Chile both occupy painfully high spots as well, with around 22% of each country’s wealth being held by the countries’ richest citizens. This places these two major economies somewhere between Russia and a number of Gulf states that are either run by royal families or engulfed in civil war.
There are some expected results… and some surprises. Uruguay, which has emerged in recent years as Latin America’s success story, is the region’s most equitable society. That makes sense. But El Salvador falls far below its neighbors in terms of the share of wealth held by its richest citizens – a rare bit of good news.
Here at Latinometrics, we’re all about giving flowers to the countries and people growing Latin America, whether that be in Colombia or the Dominican Republic. But growth must include all people, not just the very richest. It can be a challenge to ensure development is sustainable and widespread – just ask recently-elected presidents like Gabriel Boric and Lula da Silva – but the only way the region will grow well is if everyone’s wealth grows with it.