Employers Earn 10 Times More Than Workers in 3 Latin American Countries

There are at least three countries in Latin America where the wage disparity is such that the employers earn nearly 10 times the wage of their employees, according to new data released by BBC Mundo.

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In 2017, senior managers in large companies in the Dominican Republic, Guatemala and Costa Rica were paid at least 10 times higher than newly-graduated employees, with the highest disparity ratio in the Dominican Republic (11.5) followed by Guatemala (10.3) and Costa Rica (10.3). Ecuador, Peru and Colombia had disparity ratios of 9.1, 9.3 and 8.4 respectively.

These firms claim their hierarchical salary structure is at par with the "international market," Benjamin Frost, general manager of Reward Products of Korn Ferry, told BBC Mundo. While those at the bottom of the ladder are paid "according to the cost of living" of each nation.

"Therefore, we see the greatest gaps in those countries with the lowest costs of living, which are usually the poorest," he noted.

The economy of the country is also instrumental in determining the salary. For instance, in "mature economies" the ratio between the two salaries ranges between 2.5 and 4.5.

In the United Kingdom, for example, it is 3.4, meaning that managers earn 3.4 times more than workers. In "semi emergent" economies, such as in most Latin American nations, the ratio falls somewhere between 5 and 10. Some fast-growing economies see their ratio at over 10. For instance, China's ratio has reached 12.1.

Since 2003, the Dominican Republic has seen an economic boom as the Caribbean country's GDP has tripled, reaching US$71.58 Billion in 2016.

Areas such as mining, construction and tourism have seen major growth, alleviating poverty from 42.2 percent to 30.5 percent in four years, according to government data.

However, this doesn't indicate that all inequalities have been met as the wage disparity has increased at an astonishing rate. A high-level manager earns an average of US$145,885 a year, whereas an employee receives US$12,654, that is, 11.5 times less.

"Since the (2008) recession, a lot of attention has been paid ... and the focus has been on inequality is not a good thing," he said.

"But what we see in the information thrown by the market is that it continues to grow."

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Nearly 60 percent of the Guatemalan population lives in "absolute poverty" and 23 percent in extreme poverty, according to U.N. High Commissioner for Human Rights Zeid Ra'ad Al Hussein. Yet, their managers are among the highest paid, drawing an average salary of US$162,938, while lower-ranked workers receive about US$15,753.

According to the Economic Commission for Latin America and the Caribbean, ECLAC, Costa Rica and the Dominican Republic were among the top-five fastest growing economies in Latin America.

Costa Rican employees earn an average of US$12,937 against the US$132,654 received by their top-tier managers.