Addressing Racial Exclusion in Latin America’s Labor Markets

By Isabel Morales

It was not until recent years that Afro-Latinos' issues in relation to economic development were noticed by major institutions in the international development community. The first major recognition was given by the Inter-American Development Bank (IDB) 25 years ago in 1996. However, Afro descendants in Latin America have been suffering from discrimination and economic exclusion since the time of colonization. There are around 134 million people in Latin America who identify as Afro-Latinos (PAHO, 2021). They represent about 38 percent of the population, yet they comprise around 50 percent of all the people living in extreme poverty (World Bank Group, 2018). Economic inequality gaps and poverty are representative of structural barriers in Latin America that prevent Afro-Latinos and other minorities from entering and rising within the labor market. These structural barriers stem from the widespread racial discrimination and colorism that is ingrained into Latin American society. Discrimination in the labor market is reflected by several factors including significant income inequality gaps, educational access, and statistical discrimination.  

A simple yet often overlooked idea within development economics is that poverty is not always clearly presented. Numbers and percentages calculated from economic formulas will tell us if poverty decreased, but they will not reflect how inequality changed. For instance, between 2000 and 2015, over 50 percent of Afro-Latino households earning less than $5.50 a day were no longer under the poverty line in Brazil and Uruguay (Freire et al., 2018). The same thing happened for 20 percent of Afro-Latinos in Ecuador and Peru (Freire et al., 2018). However, what is usually not shown is how upper classes in Latin America experienced significant gains in their incomes from this poverty reduction, which further widens the inequality gap. Income may be rising for Afro-Latinos who live in poverty, but they benefit less from a rise in income than those who are white or mestizo. Therefore, significant inequality gaps that existed prior to the reduction in poverty persisted (Freire et al., 2018). In Brazil, monthly income per capita for Brazilians of European descent is more than double that of Afro-Brazilians (Morrison, 2015). Additionally, Afro-Brazilians that are employed earn less than half of what white Brazilians earn (UN, n.d.).  

High levels of poverty and income inequalities show several barriers in entering the labor market, such as access to education. In Latin America, a large portion of the population rarely gets the chance to even graduate from high school. This is especially true for Afro-Latinos who, in countries like Colombia and Ecuador, obtain a university degree at half the rate of the national average (Morrison, 2015). For Afro-Latinos in Latin America, poverty has limited their ability to access quality education. The lack of opportunities to obtain an adequate education level causes Black Latinos to work in jobs with low-paying wages, making it harder to educate the next generation (Sanchez & Bryan, 2003). This is a vicious cycle that places Afro-Latinos at the bottom of the social ladder without giving them the opportunity to climb up. A study carried out by the World Bank found that completing secondary and tertiary education would reduce the likelihood of Afro-Brazilians living in poverty by 16 and 23 percent (Freire et al., 2018). These results suggest that it is crucial to invest in educational policies that acknowledge specific needs to change the cycle that disproportionately affects Afro-Latinos (Freire et al., 2018). 

Another barrier for Afro-Latinos to enter the labor market is related to statistical discrimination. Statistical discrimination is an economic theory that explains racial profiling and gender and aged-based discrimination in the labor market (Moffatt, 2019). This phenomenon is highly prevalent in many of Latin America’s hiring and job processes. Afro-descendants and Indigenous individuals are less likely than white candidates to be hired. In Peru, white Latin Americans are 62 percent more likely of being called back for interviews than Black Latin Americans who have similar qualifications (Morrison, 2021). Afro-Latinos may also experience age and gender-based discrimination on top of the prejudice they receive due to race, further reducing their chances of getting a job. This not only prevents Black individuals from moving up in society, but it also hinders the country’s economic development by promoting inequality.  

Many studies show that these discriminatory systems and practices indeed contribute to hindering economic growth in Latin America and the Caribbean. The results suggest that institutions that invest less in training Afro-descendant individuals miss the economic potential of a large portion of their population (Sanchez & Bryan, 2003). In addition, a report by the Inter-American Development Bank showed that Brazil and other Latin American economies could expand by over one third if people of color were integrated into their countries’ formal labor force (UN, n.d.). For example, Afro-Brazilians make up around 56 percent of the Brazilian population, but their economic participation is only 20 percent of the country’s total gross domestic product (GDP) (Nugent & Paulo, 2020). This is not to say that ending racial discrimination should be thought of as a means for economic growth, but rather as a means for an increased standard of living, opportunities, rights, and equality for everyone, regardless of the color of a person’s skin. 

Economic inequalities and limited economic barriers are part of a multilayered issue of social exclusion that do not tell the whole story. Factors such as income inequalities are important to study because they are reflective of deeper societal problems. However, many times governments and larger institutions will attempt to address the outer layers of issues like social exclusion while ignoring the underlying factors that are causing them (Freire et al., 2018). For instance, Latin American institutions have policies in place that aim to help their Afro-descendant populations, but discrimination is still widespread. One example is the implementation of racial quotas in the workplace that will not be effective if obstacles in the education system are not addressed. However, for any reform or policy to work, one must address the colorism that is fixed in day-to-day behaviors that naturalize discrimination within all areas of society, such as hiring practices and the workplace.  

 


 

References 

Freire, G., Díaz-Bonilla, C., Schwartz, S., Soler, J., & Carbonari, F. (2018). Afro-descendants in Latin America Toward a Framework of Inclusion. The World Bank. https://openknowledge.worldbank.org/handle/10986/30201 

Moffatt, M. (2019, April 10). The Economics of Discrimination: What Is Statistical Discrimination? ThoughtCo. https://www.thoughtco.com/the-economics-of-discrimination-1147202 

Morrison, J. A. (2015, August 5). Behind the Numbers: Race and Ethnicity in Latin America. Americas Quarterly. https://americasquarterly.org/fulltextarticle/behind-the-numbers-race-and-ethnicity-in-latin-america/ 

Morrison, J. (2021, August 26). Cerrando brechas raciales en los mercados laborales de América Latina. Inter-American Development Bank. https://blogs.iadb.org/trabajo/es/cerrando-brechas-raciales-en-los-mercados-laborales-de-america-latina/ 

Nugent, C., & Paulo, T. B. R. (2020, December 16). How Black Brazilians Are Looking to a Slavery-Era Form of Resistance to Fight Racial Injustice Today. Time. https://time.com/5915902/brazil-racism-quilombos/ 

PAHO. (2021). Afro-descendants in Latin American countries live in starkly unequal conditions that impact health and well-being, PAHO study shows. PAHO/WHO | Pan American Health Organization. https://www.paho.org/en/news/3-12-2021-afro-descendants-latin-american-countries-live-starkly-unequal-conditions-impact#:%7E:text=In%20Latin%20America%2C%20134%20million,the%20overall%20maternal%20mortality%20rate. 

Sanchez, M., & Bryan, M. (2003). Afro-descendants, Discrimination and Economic Exclusion in Latin America. Minority Rights Group International. https://minorityrights.org/publications/afro-descendants-discrimination-and-economic-exclusion-in-latin-america-may-2003/ 

UN. (n.d.). Race and Poverty in Latin America: Addressing the Development Needs of African Descendants. United Nations. https://www.un.org/en/chronicle/article/race-and-poverty-latin-america-addressing-development-needs-african-descendants 

World Bank Group. (2018, August 28). Eliminating Afro-descendant Exclusion in Latin America is Vital for Development. World Bank. https://www.worldbank.org/en/news/press-release/2018/08/29/eliminating-afro-descendant-exclusion-in-latin-america-is-vital-for-development 

 

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