Latin America´s Growing Middle Class

article from December 14, 2010

by Julie R Butler

Having addressed the issue of poverty last week, the good news is that Latin America’s middle class is growing.

According to recently published report by the Economic Commission for Latin America and the Caribbean (ECLAC), once the figures are collected,

“Poverty and extreme poverty will fall in Latin America in 2010, thanks to the robust economic recovery in most of the region's countries.”

The report emphasizes that, despite the global recession, poverty rates in 2009 rose by only one tenth of a percentage point and are now back on track with the region’s larger trend that began in 2003. The figures show impressive resiliency in Latin America’s response to the economic crisis.

The study found that six out of the nine nations considered showed reduced poverty levels, and that addressing the vexing issues of child poverty through social aid programs and improvements in the effectiveness of educational systems proves to be the most efficient means of undoing “inequalities of origin,” which is especially promising for countries such as Guatemala and Nicaragua.

The mention of these two nations by the authors, in light of the fact that the only Central American nation that was included in the study, Costa Rica, was one of the three where the poverty level increased, shows some concern for the plight of the people, there. And as Eduardo Sacayón, the director of the Interethnic Studies Institute at the Guatemala University of San Carlos, recently told IPS,

"The situation of the native peoples may be even worse than before. Poverty has increased, the quality of education is very poor, and there is no intercultural perspective in health services."  

Also, the only Caribbean nation to be included in the study was the Dominican Republic, which did show a decrease in poverty, and other nations in the Caribbean still lag behind. It has been successes in the Southern Cone that have pulled the overall numbers for Latin America up, while Mexico, Central America, the northwestern region of South America, and the Caribbean continue to struggle.

Another report was released on 3 December by the Organization for Economic Cooperation and Development (OECD) documenting the growing middle class in Latin America. This report lists Uruguay at the top, with just over 55% of households being classified as “middle class,” and then Mexico and Chile, at around 50%. Brazil, Peru, Costa Rica, Ecuador, and Argentina follow, with decreasing numbers of middle class citizens. Colombia and Bolivia come in at around 30%.

Again, education is stressed as the surest way to promote the rise to higher social and economic status. But also, the report warns that this sector in Latin America is more “economically vulnerable” than those in the more advanced economies of the world:

“There is normally a direct correlation between a sizeable and relatively prosperous middle class and long-term growth, greater equality and less poverty. However, high levels of labour informality, low coverage of social-protection programmes and limited fiscal resources to improve public services could cancel out the possible benefits in Latin America.”

Ángel Gurría, Secretary General of the OECD, summed up the report.

“A growing and vibrant middle class is a sign of good economic prospects in Latin America,” she stated. “However, Latin Americans in the middle of the income distribution still face serious hurdles in terms of purchasing power, education and job security. These groups still have some way to go to be fully comparable to the middle classes in more advanced economies.”

What these two reports show is that, despite some regions being plagued by violent regional conflicts, despite the daunting issues faced by marginalized indigenous peoples, despite long-entrenched social attitudes and structures, despite chronic instability – and perhaps it is because they hold no illusions that there are any easy answers to their ongoing challenges – overall, the people of Latin America are slowly managing to move toward improvements that, if the trend toward finding a delicate balance of economic and social interests continues, could bring a level of sustainability that would be good for everyone.

Julie R Butler is a writer, journalist, editor, and author of several books, including Nine Months in Uruguay and No Stranger To Strange Lands (click here for more info). She is a contributor to Speakout at Truthout.org, and her current blog is Connectively Speaking

email: julierbutler [at] yahoo [dot] com, Twitter: @JulieRButler