Inequality on the rise in Argentina. Photo: El Economista

The gap between rich and poor is on the rise, according to a new report by the CEPA think tank. A big caveat though is that the numbers from the report are from the official INDEC statistics agency, meaning that they are suspect since the previous administration was known to fudge figures for political gain.

According to the report, which measures the difference in income between the top 10 and the bottom 10 percent of earners in Argentina, 2016 has seen a marked increase in inequality, reversing a 12-year trend of movement toward greater income equality.

In numbers: in 2015, someone in the top 10 percent of earners in Argentina earned 18.7 more than someone in the bottom 10 percent, this year that figure has soared to 23.2 times.

“Evolution of the gap between the top ten percent and the bottom ten percent on an individual scale”.
“Evolution of the gap between the top ten percent and the bottom ten percent on an individual scale between 2003 and 2016”.

The report expresses inequality in terms of the Gini Coefficient, the most used measure of inequality, whereby 0 represents perfect equality and 1 represents complete inequality, inequality grew from 0.3856 in 2015 to 0.4168 this year.

The report puts the blame squarely on the government’s economic policies. Layoffs, the devaluation of the peso and the removal of export and import controls have meant a decrease of up to 11 percent in the average wage. This loss is made acutely painful by “the acceleration of inflation during the last 10 months, [which] has impacted strongly in the purchasing power of salaries and pensions and in the category of informal workers.”

A similar report by IDESA, based on data from INDEC, confirmed that inequality is an urgent problem in Argentina, though it did not make a comparison with the previous mandate. Fifty percent of workers earn less than minimum wage, according to that analysis.

This brusque increase in inequality is in comparison to the prior twelve years, which saw the gap between rich and poor decrease on the whole. Between the years 2003 and 2015, the inequality gap decreased from the richest receiving an income 33 times greater than the poorest Argentines to 18.7 in 2015.