Wednesday, January 26, 2011

A Matter of Inequality

"Truthfuly, we need a social transformation that comes from the bottom-up" said Gov. Fortuño, in response to the wave of violence in which almost 100 people have been murdered in the first month of the new year. In January 2010, there were a total of 76 murders. The government alone cannot solve the issue of crime, according to Fortuño. The root of the problem, said the Governor, is the lack of values. In order to come up with a solution, the Governor has organized a gathering of representatives from non-profit organizations, religious leaders and government officials. Dialogue certainly does no harm, but if Fortuño is serious in attacking many of the island's societal ills, he must pay closer attention to something more consequential: income inequality.

An article published in ReVista, the Harvard Review of Latin America, it is estimated that the top 15% of the wealthiest households control 60% of the island's income. This egregious disparity is comparable to those of other Latin American countries. On the cover article of the latest issue of The Economist, the increasing gap between the rich and the poor is cited as "one of the main global risks" in a survey conducted at the World Economic Forum held in Davos, Switzerland. An obvious solution, as mentioned in the article, is to invest in education and other programs which would help lift low to middle income households up. It is no secret that the island's public education system is in tatters. At a cafeteria which I often frequent, on many occasions, I have seen a boy of about 12 years old managing the cash register during lunch hour. I asked him why he wasn't in school, and he said because the teacher didn't show up.

I simply can't imagine anything more important for a country's future than Education, which has always been a tool for upward social mobility. Unsurprisingly, the countries with the highest math and reading test scores are found in Asia and Europe. These countries have obtained the greatest economic growth and achieved higher standards of living. Perhaps, as Gov. Fortuño says, government should not be seen as a panacea. However, when 58% of the island's criminals are high school dropouts, the government must re-evaluate and re-direct resources to areas in which a true "social transformation" can take place.

(Image obtained from The Economist)


Mitch said...

Income inequality is a problem only if you see economics as a zero-sum proposition.

From The American Thinker blog: "Some view wealth as static. There is only so much to go around. If you take a piece of the pie, there is less left for others. But capitalism allows individuals to make the pie bigger so that everyone benefits. When individuals profit by creating new ideas that generate new jobs, they make the pie bigger. Their profits do not correspond with others' losses."

adriana said...

Hello Mitch,

Thanks for your input. While capitalism rewards those with great ideas and innovations, as we've seen with this financial crisis, the system is not perfect. The huge government bailouts of some of Wall Street's biggest firms, at the expense of taxpayers, is just one example.

In Puerto Rico, austerity measures have led to massive government layoffs and budget cuts mostly affecting the less well off. Unfortunately, this has not been accompanied by investments in education and the re-training of workers for a 21st century economy.