Charles Kenny's Weekly Foreign Policy Column on Mexico's inequality
From the article
Mexico is the most staggeringly unequal society on the planet -- but it doesn't have to stay that way.
The biggest loser from early August's global market gyrations may well be Carlos Slim, chairman of Mexico's Telmex. Bloomberg estimated on Aug. 5 that he was down $8 billion in four days following the Mexican stock market's decline over concerns about the U.S. economy. But before you shed too many tears for Mr. Slim, remember that $8 billion was less than half the distance between him and the No. 2 on Forbes's global rich list, Bill Gates. That, along with the fact that Mexico still has millions of people living in absolute poverty, suggests the country has some serious issues with its governance. The good news is the situation is getting better -- even if it has a long, long way to go.
This March, Forbes calculated that the 71-year-old Slim had a net worth of $74 billion, beating out Gates by $18 billion. To put that in perspective, $18 billion is enough to extend wireless broadband to 98 percent of Americans or equal to the entire wealth of Facebook's Mark Zuckerberg. What makes Slim's wealth all the more amazing is that he is living in a country that still contains some of the very poorest people on the planet.
Worldwide, absolute poverty is defined as living on $1.25 a day or less. It is a level of income that suggests 60-plus percent of expenditures are going to food -- although the diet it can purchase is almost certainly too limited to provide adequate nutrition. That $1.25 figure is in "purchasing power parity" -- a dollar goes further in a poor country than it does in a rich one, and the poverty calculation takes account for that. At market exchange rates -- the ones you pay at the bank -- the absolute poverty cutoff in Mexico is closer to 79 cents a day. More than 3.5 million people in Mexico lived on less than that in 2008, according to the World Bank. So the money Slim lost in the first few days of August is equivalent to more than seven times the yearly income of all 3.5 million people in Mexico living in absolute poverty.