The Lewis two-sector model. Lewis assumed that Latin American economies were made up of two sectors: (1) a traditional rural subsistence sector, characterized by a surplus of labor with zero or very low productivity, and (2) a modern urban industrial sector high productivity in which labor from Latin America entered. subsistence sector is gradually transferred. The main focus of the model is both the process of job displacement and employment growth in the modern sector. Both labor displacement and urban employment growth are driven by the expansion of production in the fashion sector. The speed with which they occur is given by the rate of accumulation of industrial capital in the modern sector. Such investments are made possible by the excess profits of the modern sector, on the assumption that capitalists reinvest all their profits in the expansion of capital. Finally, the level of wages in the urban industrial sector is assumed to be constant and determined as a fixed premium over a constant subsistence level of wages in the traditional agricultural sector. Lewis hypothesized that the urban wage should be at least 30% higher than the urban wage. the average rural income to induce people to migrate from their areas of origin to the cities. The model therefore assumed that rural-urban migration was an essential part of the development process, and was, therefore, a good thing. People expected that ISI would lead to the overall development of a country through a series of related processes: the growth of urban industry; the migration of people from unproductive jobs in rural areas; the expansion of employment in the modern productive sector; and an increase in total wages earned by workers. Once this process has started, then, presumably,... in the center of the card... a plane struggling to take off (initial ISI). Then, as capital is reinvested and more workers are employed in the modern sector, and those workers begin to purchase more goods with their higher incomes, the modern sector will expand further. And so on, as the economy “took off”. The expansion of the modern sector into urban areas of Latin America has caused millions of people living in rural areas to relocate and leave the countryside, seeking better-paid jobs in the city. The modern sector has not been able to absorb all the newcomers. The result has been the growth of poor neighborhoods, mostly located on the outskirts of cities. People living in poor urban neighborhoods earned their living by doing odd jobs such as washing cars, working part time, becoming servants in middle class families, selling items on the street, such as newspapers, cigarettes, chewing gum..