SANTIAGO – Chile suffers from an extreme inequality in incomes and quality of life that persists even when the economy is growing strongly, two experts with the U.N. Economic Commission for Latin America and the Caribbean say in a new report.
“What is needed is a change in the focus of public policies,” according to Ricardo Infante and Osvaldo Sunkel, author of the document released Tuesday by Santiago-based ECLAC.
The study found that the top 20 percent of Chile’s 17 million people receives upwards of 13 times more in income than the bottom fifth.
Chile’s economy is also characterized by high unemployment and a proliferation of hiring on short-term contracts that further undermines job security, the ECLAC document says.
Infante and Sunkel note that while most of the dynamism in the Chilean economy is concentrated in a comparatively small sector marked by high productivity and decent salaries, the majority of workers are stuck in poorly paid jobs in industries where improving productivity is not a priority.
As a result, they say, expansionary periods bring few gains to the mass of workers.
The ECLAC economists say Chilean policymakers should begin focusing on the idea of relative poverty, which Sunkel and Infante define as a household income lower than 0.6 percent of the median.
Reducing inequality would require an ambitious program of structural transformation lasting as long as 20 years, according to the authors of the study.
Such an effort would aim to gradually boost productivity and incomes while assuring a minimum standard of living for all Chileans, Infante and Sunkel said. EFE