MercoPress. South Atlantic News Agency

Uruguay, Mexico and Chile have the most numerous middle-class in Latam

Angel Gurria, OECD Secretary General

According to the 2011 Latin American Economic Outlook report released on Dec. 3 by the Organization for Economic Cooperation and Development (OECD), Chile has the third highest percentage of middle-class citizens in Latin America.

The report estimated that 49.14% of the Chilean population belongs to the middle class. Only Uruguay (55.51%) and Mexico (52.88%) have higher percentages of middle-class citizens. Countries with the lowest proportion are Bolivia and Colombia.

“The middle class in Latin America doesn’t correspond to the typical stereotype notions of what the middle-class should be,” explained Jeff Dayton-Johnson, Head of America’s Desk at OECD.

“Many have jobs in the informal sector, don’t own their homes or don’t own major consumer durables. They’re vulnerable to falling into poverty and they need public policies to support their upward mobility”.

In Chile, most middle-class citizens work in the transport and construction sector, followed by agriculture. In Argentina, most work in industry, and in Mexico and Brazil, trade and hospitality.

The number of people belonging to this middle social class has been slowly growing in Chile, from 46.6% in 1998 to 49% today. The group which the OECD defines as wealthy, meanwhile, has hovered between 32 and 33%, while the poor in Chile have declined from 20.1% in 1996 to 18.7% in 2006.

Despite its growing middle-class credentials, Chile differs from other Latin American middle-class countries regarding the Horatio Alger, rags to riches mythology: that a person born poor can reach the top by working hard.

While in Mexico, 65.08% of the middle-class believes it is possible to become rich, in Chile only 40% have such confidence.

The OCED study also asked whether poor access to large amounts of credit and poor infrastructure are reducing the opportunities for entrepreneurial initiative in Chile.

Labour market informality remains high among the middle-class and informality goes hand-in-hand with low social-protection coverage, since fewer than half of these workers will benefit from a social safety net when they get old or lose their jobs.

In Chile, 39% of the middle class population does not contribute to any pension scheme. This goes up to 52% and 67% in Brazil and Mexico, respectively, and to an astonishing 95% in Bolivia.

The growing middle class in Latin America speaks of economic progress.

“Latin Americans in the middle of the income distribution still face serious hurdles in terms of purchasing power, education and job security” said Ángel Gurría, Secretary General of the OECD.

“These groups still have some way to go to be fully comparable to the middle classes in more advanced economies.”

By Dominique Farrell  - Santiago Times