Colombia's Economy
Inequality and Informality
Why Colombia is one of the most unequal countries in Latin America, how its socioeconomic strata system for utilities works, and the 2021 protests over tax reform.
Colombia is among the most unequal countries in Latin America.
Estratos
Colombia divides homes into strata from 1 (poorest) to 6 (richest):
- Higher strata pay more for utilities, subsidising lower strata.
- Critics say it labels people and neighbourhoods.
Informality
Over half of workers are informal.
Land
Land ownership is highly concentrated.
2021 protests
A proposed tax reform during COVID sparked mass protests; the reform was withdrawn.
Reforms
Later reforms raised taxes on high earners and extractive firms.
The utility bill
A family in stratum 6 pays much more for electricity than one in stratum 1 for the same usage.
Thinking all utility prices are equal
Colombia's strata set different prices.
Key takeaways
- Colombia is highly unequal.
- Strata set utility prices.
- Over half of workers are informal.
- 2021 tax reform protests forced withdrawal.
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