Understanding Income Inequality in Mexico

INCOME INEQUALITY IN MEXICO
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Income Inequality in Mexico
Rising poverty levels is one of the major societal problems affecting many countries around the world. Under-developed and developing countries in Africa and some parts of Asia and Latin America have for centuries been plagued by dwindling economic fortunes characterized by low standards of living of the majority of their citizens. Various parameters have been used to measure poverty in countries such as Mexico and include nutrition, clean water, housing, education, healthcare and access to quality and essential services. One of the significant factors that have been attributed to the increasing levels of poverty in these countries is income inequality. Mexico has witnessed widening income inequality resulting not only in increasing poverty levelsб but also in the gap between the rich and the poor. Despite sharing the border with an economic powerhouse in the United States, Mexico has failed to replicate the same success, and the majority of its citizens have languished in deplorable living conditions for decades. The affluent families have continued to amass their wealth while the poor suffer even to put food on their tables. The research paper, therefore, seeks to examine the aspect of income inequality in Mexico with an emphasis on the contributing factors, the impacts on the country and the recommendations on how to address the problem.
Understanding Income Inequality in Mexico
According to Veronica Amarante (2016) “income inequality refers to the unequal distribution of household or individual income across the various participants in an economy.” The concept of income inequality, therefore, refers to the unfair spread of income levels in a country where the rich have a disproportionally larger share in comparison to the general population. The rich control various aspects of the country’s economy and primarily own most of the industries and factories that employ many people but at low wages. Income inequality is a significant problem in Mexico, and the government has continuously failed to instigate effective policies to address the issue. The nation’s wealth is unevenly distributed with reports indicating that 10% of the country’s wealthiest people have about 45% of all income whereas 10% of the nation’s poorest have 1.3% of the remaining income. These statistics indicate the dismal spread and distribution of income in Mexico where the wealthy individuals control the country’s GDP. In the same regard, Carlos Slim who has considerable investments in many Mexican companies and was ranked 8th as per the recent Forbes’s listing of the World’s richest billionaires has a personal fortune that is almost 8% of the nation’s GDP. Individuals such as Carlos Slim have had significant backing by the national government which does not entirely support underprivileged businesses and on the contrary promote the establishment of monopolies both in the public and private sectors.[del Castillo Negrete Rovira, Miguel. "Income Inequality In Mexico, 2004-2014." Latin American Policy 8.1 (2017): p.103.]
The concept of income inequality can also be traced back to the colonial per...