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Uruguay INCOME DISTRIBUTION AND LIVING STANDARDS
Uruguay's pattern of income distribution remained the
most
egalitarian in Latin America, although it apparently
worsened
under military rule from 1973 to 1985. In 1976 the poorest
fifth
of Uruguayan households received 4.8 percent of total
household
income, the top 10 percent of households took in 30.1
percent of
total household income, and the top 20 percent of
households took
in 46.4 percent of income. Although unequal, this pattern
was
closer to that of the developed world than to the rest of
Latin
America.
Despite erosion of the minimum wage, the net impact of
the
recovery of real wages and pensions in the first year
after the
return to democracy in March 1985 appears to have slightly
improved the distribution of incomes. Both in Montevideo
and
elsewhere in Uruguay, the highest 10 percent of households
were
reported to take in just under 30 percent of household
income in
1986, while the lowest 20 percent of households garnered
just
under 6 percent of income (see
table 5, Appendix).
During the first half of the twentieth century, living
standards in Uruguay approximated those of the developed
world.
Since the 1950s, however, economic stagnation and even
decline
have meant severe falls in real wages (see
table 6,
Appendix).
This process became particularly marked starting in 1968,
the
year in which the government imposed a wage and price
freeze and
abolished the so-called wage councils, in which government
representatives, employers, and unions negotiated
salaries. (The
councils were revived in 1985.)
Real wages grew particularly fast from 1985 to 1987
(see
table 7, Appendix). However, this was less true in the
public
sector, where in 1989 they remained below their 1980
level. The
Colorado government also allowed the real value of the
legal
minimum wage to continue to fall (see
table 8, Appendix).
Although the Colorado government made only cautious
attempts
to redistribute income to the most needy, the revival of
economic
growth helped to produce some improvement in various
indicators
of income distribution. The wage share of national income
grew
from 30.3 percent to 31.4 percent between 1985 and 1987,
while
the income share of the self-employed grew from 10 percent
to
12.7 percent. According to the household survey of the
General
Directorate of Statistics and Census, the proportion of
families
below the poverty line in Montevideo fell from 27 percent
in 1984
to 16 percent in 1987.
Reliable data on rural wages were hard to collect.
Clearly,
they were much lower than in interior towns or Montevideo,
but
official statistics suggested that they did not fall as
far or as
fast as wages in the rest of the economy in the 1970s.
Data as of December 1990
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