Today, it takes two generations for a poor family in Denmark to reach the country’s median income. In France, it is six generations, and in Brazil nine. That is, those who were born to low-income families have more options to buy a home, get a good education and experience a better life than their parents if they are in the Nordic country. This was indicated by the Global Social Mobility Index of the World Economic Forum, which classifies 82 countries according to the ability of their citizens to reach their highest potential, regardless of their socioeconomic background.
The study assesses the current state of social mobility, taking into account factors such as access to health, education, social protection, access to technology, wages, and employment opportunities. The United States ranks 27th and China 45th. The top 12 Latin America country’s on this analysis of global social mobility rank as follows:
- 35 Uruguay
- 44 Costa Rica
- 47 Chile
- 57 Ecuador
- 58 México
- 60 Brasil
- 63 Panamá
- 65 Colombia
- 66 Perú
- 68 El Salvador
- 69 Paraguay
- 74 Honduras
The top 10 in the global ranking are:
- Low countries
“There is little social mobility in Latin America,” says Thierry Geiger, head of Comparative Analysis at the World Economic Forum. “That lack of mobility is related to the high levels of inequality in the region.”
However, countries like Uruguay or Costa Rica have a better position in relation to their neighbors. “Education in Costa Rica is relatively good and there are more job opportunities than in other Latin American countries,” says Geiger.
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“But the distribution of wealth continues to be a problem,” he adds, since inequality has increased in Latin America, as it has also in other parts of the world.
Most economies have failed to provide the conditions for their populations to prosper, explains the expert. That is why a person’s opportunities are often directly related to their socioeconomic status at birth.
“Historically, little attention has been paid to making economic growth inclusive,” he says. “The global economic system tends to reproduce inequalities. So in many countries the circumstances in which you were born and not your talents determine your future.”
In this sense, he argues, it is necessary to equalize the opportunities. A topic that remains at the center of the debate, given that technological development has polarized the inequalities that exist in societies by reducing the demand for low-skilled workers.
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The report states that the digital division has been exacerbated by the so-called “superstar companies”, which are the firms with high profit margins and little use of labor.
The World Economic Forum proposes some measures for governments to promote a higher level of social mobility:
a) Improve fiscal progressivity (for those with more resources to pay more taxes).
b) Decrease concentration of wealth.
c) Change the balance of tax sources.
d) Stimulate social spending with public funds and incentives.
e) Increase support for education and lifelong learning with public and private funding.
f) Increase social protection for workers
And in the case of companies, the study suggests certain practices that can add oil to the gear of mobility in societies:
- Promote a culture of meritocracy in recruitment.
- Provide professional education.
- Retraining and improving the skills of your workforce.
- Pay fair wages.
- Create plans to reduce historical inequalities in each economic sector.
The study points out that there is evidence that companies that put a purpose over profits do better in the long term. Companies, he adds, are realizing that they face risks stemming from unresolved social challenges, such as inequality.
The vision that is present in the study is that if societies are more equitable, consumer bases grow, operating environments become more stable and there is greater trust between customers and the parties involved in the business. “Paying fair wages and eliminating the gender pay gap will also be crucial in boosting social mobility,” concludes the study.