As the rise of Latin America's middle class brings the region closer to more widely shared prosperity, a report warns that without a new set of reforms, both fiscal and social, those advances risk falling by the wayside.
Consider the following.
In 2011, more people were part of the middle class in Latin America than living in poverty.
For the first time ever, a decade of strong economic growth within the region saw employment increase and wage inequality drop, contributing to an unprecedented reduction in poverty and an increase in prosperity for all levels of society.
These are just a couple of the findings of a new report, Shifting Gears to Accelerate Shared Prosperity in Latin America and the Caribbean, launched today.
Underscoring the World Bank’s new twin goals of eradicating extreme poverty and boosting prosperity for the bottom 40% of the population by 2030, this new report proposes a framework to help Latin America stay on track as well as speed up future gains.
Not only has employment increased, but average real incomes in Latin America have also risen by more than 25% since the turn of the millennium. And with the lowest wages increasing considerably faster than the regional average, it has been the poorest 40% who have benefitted the most.
As one of the most unequal regions in the world, strengthening this link between growth and wage equity will be crucial if Latin America is to continue making strides towards shared prosperity.