Latin America's worst wage gap for women and minorities? Powerhouse Brazil.
Men earn 30 percent more than women in Brazil, according to a new report from the Inter-American Development Bank. That gap is almost zero in Guatemala and Bolivia.
São Paulo, Brazil; and Mexico City — Mention Brazil today and adulation follows. Its fight against poverty, its growing middle class, and its emergence as an economic powerhouse are all being studied as models to be applied elsewhere. (Read our three-part "Brazil Rising" series for more.)
In one area, however, the country is far behind its peers: income equality. In a new study by the Inter-American Development Bank (IADB), released Monday, Brazil sits at the bottom of a list of 18 regional countries when it comes to how much women and minorities are paid for the same job a white man does.
Men earn 30 percent more than women of the same age and education level in Brazil. In Bolivia and Guatemala, that gap is essentially zero. Compared to Mexico, the other economic engine of the region, Brazil also stands out: Men in Mexico earn just 7 percent more than their female peers. The same gaping divide appears in Brazil when comparing wages for whites and minorities – a blow to a nation where half the population considers itself black or mixed race and prizes itself on being "color blind."
"Brazil is regarded in gender and ethnic terms as a very equalizing country. Everywhere there is inclusion. This is what Brazilians like to think about themselves," says Hugo Ñopo , an IADB economist and lead author of the study. "What the statistics show is that there are important gaps.... We think of it as an invisible wall."
Women: majority of workers in Latin America
With trade liberalization, economic growth, and urbanization, women throughout Latin America have joined the workforce in droves in recent decades, today comprising about 52 percent of all workers. But fair income distribution has not caught up. In the 18 nations studied, men earn on average 17 percent more than women, when accounting for age and educational attainment levels. In most countries, the gap is biggest among those with the least education. Women's participation in the informal sector, such as domestic work that typically is underpaid and without benefits, drives down their earning power.
But in Brazil, the gap is so high, Mr. Ñopo says, because women are absent from the highest levels of corporate hierarchies. According to Leila Linhares Barsted, executive coordinator of Cepia, a Rio woman's rights group, gender gaps have closed over the decades and women now comprise 40 percent of the nation´s workforce – an all-time high, she says. Brazil has good social policies in place, giving women 120 days of maternity leave. That's more than in the US.
But wage inequality looms large. "In spite of government campaigns for equality, there is a still a sector that discriminates, salary wise, against women," Ms. Barsted says.
While old-fashioned discrimination is to blame in part for unequal wage distribution, there are other forces at play, says Ñopo. The study revealed the same gender income gaps for those who are self-employed – data that surprised the researchers and goes against long-held views that the employer is always to blame. "It's the other way around. Self-employment is very attractive for females who have to take care of household responsibilities," Ñopo says. "Having flexibility is invaluable for them. But the result is this flexibility that they look for in the labor market comes at a price."
Brazil also at bottom for racial disparity
For minorities, Brazil is also is ranked at the bottom of the list at 30 percent disparity (followed by Guatemala at 24 percent and Paraguay at 22 percent).
The indigenous, who comprise about 10 percent of Latin America´s population, have made strides in countries such as Bolivia and Ecuador, reasserting their rights to resources and political inclusion. But in the seven countries where data was collected for the IADB study, ethnic and racial minorities earn 28 percent less than their white counterparts.
Mario Theodoro, a director at the government-sponsored research institute Ipea and author of a book on racial inequality in Brazil, says that Brazil's emergence on the world scene has not included everybody.
"What we have shown is that in spite of the growth, in spite of a more diversified economy, in spite of more jobs and higher paying jobs, the difference between blacks and whites remain," says Mr. Theodoro. "The classic economic instruments are not sufficient to resolve problems of racism that are historical and cultural. We need to use different methods."
The government defends Brazil's record. Edson Santos, the Special Secretary for Policies Promoting Racial Equality, says that President Luiz Inácio Lula da Silva has made it a point to address inequality.
"The gaps are high but they are being reduced over time, especially since Lula took power," Mr. Santos says, adding that under Lula the income of the poor has risen by 10 percent while the income of the rich has risen 2 percent.
Ivanir dos Santos, the executive secretary of the Center for the Articulation of Marginalized Peoples, says that the country´s legacy of slavery has taken a toll and that affirmative action programs, such as those developed in the US, are crucial to promote real change. An optional quota for blacks in federal universities, for example, is a step forward but does not go far enough. The government needs to take more mandatory measures, Mr. Dos Santos says.
Compounding the problem, he says, is that Brazil's Congress and the media are dominated by white men and blacks tend not to be in politics in Brazil, in large part because they are poor and uneducated. There is neither an influential lobby nor a thriving black middle class.
"Brazil is growing but the difference between blacks and whites remains the same," says dos Santos. "More concrete measures are needed."