FEATURE STORY

Mexican Middle Class grows over past decade

November 13, 2012

STORY HIGHLIGHTS
  • The middle class has grown 50% in Latin America from 2003 to 2009, according to a new World Bank report.
  • 17 percent of Mexico’s population joined the middle class in a decade.
  • Income inequality in Mexico has declined, according to international parameters.

Osmaida Pineda Santiago has two small sons. She and her husband are both working. They just bought a house, partly with a loan that they are now starting to pay back. “We are limiting ourselves a lot so we can be just fine, and don´t need anybody to help us, but can live well,” she explains.

Based on its income, her family is part of the Mexican middle class. According to a new World Bank study, the middle class in Latin America are people who make between US$10 and US$50 per day and per person.

Many Latin Americans from the middle class dream of having their own home, and Osmaida has recently achieved it. Her house in Oaxaca is decorated with false lizards outside and religious pictures inside. There are toys, pencils and exercise books on the living room table.

The building has two floors, including a spacious kitchen and a living room with a TV. Osmaida’s family is living comfortably, but they cannot afford luxury or superfluous things.

“We can´t deviate and buy other things, because now the cost of the house is large…it’s school, fuel and food,” she says.

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We can't deviate and buy other things, because now the cost of the house is large…it’s school, fuel and food Close Quotes

Osmaida Pineda Santiago
Mother of two

Inequality declines in Mexico

From 2003 to 2009, the middle class - people who are not poor, nor vulnerable, but not yet rich – has grown 50% in Latin America, more than it has ever grown before, according to the new World Bank report “Economic Mobility and the Rise of the Latin American Middle Class”.

Mexico’s middle class is among those that have grown the most in Latin America in 15 years. In fact, 17 percent of its population joined the middle class between 2000 and 2010. Moreover, inequality in the country has gone down, according to international standards ( about 7 points on the Gini Index, the international index to measure income inequality) in a decade, more than Argentina or Brazil.

According to the study’s findings, the Mexican middle class goes to school in average a little less than 12 years.  That compares to about 6 years for the poor, 8 years for the vulnerable - those that the authors of the study consider as not poor any more (earning from US$4 to US$10 per day), but still at risk of falling back into poverty  - and about 14 years for the upper class.

An Escape from Poverty

Also, poverty in Latin America declined from more than 40% to 30% in a decade, meaning that 50 million Latin Americans escaped poverty in that lapse of time. That means that the middle class and the poor now represent roughly the same share of Latin America’s population.

The study also concludes that at least 43% of Latin Americans changed social classes in more than a decade, and most of them switched to a higher class. However, the authors of the study point out that mobility between generations is still relatively low.

The majority of children currently in the middle class in Latin America go to school, the study shows. For Osmaida, giving her children the opportunity to go to a good school is very important. “We are making efforts so that they can go to a private school and they get a good education,” she says.