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Latin America is Increasingly Middle Class

• November 28, 2012 • 9:10 AM

A few hours ago, the UN’s Economic Commission for Latin America and the Caribbean (ECLAC) issued the encouraging news that Latin America is getting more middle class. The agency’s researchers found that the continent has fewer people in poverty today than at any point in the last three decades. That’s according to the agency’s annual study, “Social Panorama of Latin America.” The whole report is available as a free download here.

The evidence points to one main factor, apparently: better jobs. A million fewer people are in poverty in Latin America than were last year, and that is because more people are working at better jobs than they were a year ago. (Or five. Or ten.) The research suggests evidence that fewer people in the 18 Latin American nations rely on loans, family money, or other sources of income other than a paycheck, to get to the end of the month. Specifically, the reduction in families living in poverty was largely the result of rising wages, rather than an increase in external sources of money, typically wire transfers from relatives working elsewhere, often off the continent.

Regional differences were still large in many cases. Chile, Argentina and Uruguay have less poverty and less income inequality than neighboring Paraguay, Bolivia and Peru. Though narrowing, the gap is still large. Via the UN statement on the research:

The most recent available statistics for 18 countries indicate that, on average, the richest 10% of the Latin American population receives 32% of total income, while the poorest 40% receive just 15% of income.

Still, the trend points to a steady narrowing of that gap, and will be good news for anyone with family or business south of the border.

 

Marc Herman

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