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8/28/14

The middle class in Latin America

Greg Weeks over at his blog Two Weeks Notice today features the CEPAL/United Nations data that's been published on the economic strata of Latin America, featuring two of the main charts as well. As is often the case people focus in on the poverty figures and that's normal, but today I got to thinking about the numbers CEPAL has supplied on the middle class in LatAm. For sure we concentrate on the poor, but what about the middle class numbers, just for a change? They have their own story to tell as well.

In order to understand context, here's how CEPAL and many others categorize the economic levels:

1) Poor. Says what it means, standard definitions apply.
2) Vulnerable. This is the sector of the population that has either a) risen out of poverty but is at risk of falling back in if things don't go well or b) dropped away from the secure middle class category and runs the risk of becoming poor. For what it's worth, in LatAm this is usually the a) group.
3) Middle class. Says what it means, standard definitions apply. People just like your author who are fortunate enough to have disposible income and the trappings thereof.
4) Residual. I like that word, much cooler than the rich or the one percent. For example people who live in Peru, run the country's media and tell you how wonderful Peru is. For another example people who live in Venezuela, run the country's media and tell you how crappy Venezuela is.

So with those out the way, the charts that follow zoom in on the middle class sector, those people established in the comfort zone of each country. They're not sweating over the next paycheck, but neither are they wondering which colour their next Ferrari should be. If you want more on the other sectors, including the percentage figures, check out the Greg Weeks post, it's on this link.

This first chart shows the percentage of each country's population that's safely ensconsed in that gossamer cocoon of ennui and neuroses we know as "middle class life". As you can see, we have the figures from the year 2000 lurking in the background and then the latest ones for 2012 as main feature. That's because CEPAL provides both sets of figures, too.


Uruguay is top of the bunch because it's always had a large section in the middle class (being a small population country helps in these things, as does its long-standing reputation as a tax haven in the region). Then many of you out there may be surprised to see Argentina in a clear second place, but that's only because you've been reading too many stupid and unbalanced articles on the country, rather than ever visiting the place. Chile's good for this metric, as are Costa Rica and Panama. Down at the bottom, four Central American countries with a reputation for poverty and instability.

This second chart is perhaps more interesting for the context it shines on chart one. Here we see the difference in percentage scores between the two sets of figures for 2000 and 2012, which gives us a good idea of how many people have managed to make the move up to middle class status in the first part of this century:


Peru is up and thrusting and has added the most in percentage terms to its middle class, so well done indeed. Then come two supposedly pariah states (if you believe the MSM bullshit on LatAm) in Argentina (scoring well again) and Bolivia. Then come a bunch that have added the rough average of 11% or 12% to their scores, all good and laudable (and hey, including Venezuela). Also rans include Uruguay (at or close to a saturation point, so no worries there) and then four countries that have the shame of seeing their percentage of middle class drop.

So, tell me how Argentina is this economic disaster area again?