神马文学网Latin America's growing middle class
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Latin America's growing middle class
From the Economist:These trends are furthest advanced in Chile. But they are most dramatic in Brazil and Mexico, which between them account for more than half of Latin America's 560m people. In Brazil between 2000 and 2005 the number of households with an annual income of $5,900 to $22,000 grew by half, from 14.5m to 22.3m, while those receiving less than $3,000 a year fell sharply to just 1.3m (see chart 2). In Mexico, according to Alejandro Hope of GEA, a consultancy in Mexico City, the number of families with a monthly income of between $600 and $1,600 has increased from 5.7m in 1996 to 10.7m in 2006.Good article overall. The article argues that the middle class is growing due to formal and informal economic growth, not state run enterprises or protectionism. In the cases of Brazil, Colombia and Mexico, it makes a pretty strong case. For much of Central America and the Andean Region, however, I'm not sure whether that argument currently holds true.Posted by boz at 4:37 AM
Something similar is starting to happen in Colombia and Peru. In Argentina the decline of what had been a predominantly middle-class country until the 1970s reached its nadir in the economic collapse of 2001-02, when a majority of Argentines fell below the poverty line. But a rapid economic recovery has been mirrored in a revival of the middle class. Ernesto Kritz, a labour economist in Buenos Aires, reckons that around 40% of Argentine families, up from 20% in 2003, have the monthly income of $1,000 that he sees as necessary for a middle-class lifestyle.
In Latin America as a whole, according to calculations by Banco Santander, a Spanish bank, some 15m households ceased to be poor between 2002 and 2006. If the trend continues, by 2010 a small majority in the region will have joined the middle class, with annual incomes above $12,090 in purchasing-power-parity terms (see chart 3). In Mexico some 15m out of 27m households could have middle-class incomes by 2012, reckons Mr Hope.
Labels: Brazil, economics, latinamerica, Mexico 13 comments:
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Hmmm, interesting how you and the Economist curiously leave out the one Latin American country whose economy has grown more than any other over the last three years (Venezuela). Curious.
What a game of smoke and mirrors. The Economist totally distorts and cherry picks both the stats and the findings of the UN (ECLAC) report they are working from. If the point is that market friendly policies are finally paying dividends for the poor, they could not be more wrong. Argentina, Venezuela and the Dominican Republic registered the most significant drops in poverty - yet these are also the 3 countries where "economic freedom" has decreased the most during that time.
Yeah, the macro economic snad social situation is much improved today versus just 5-6 years ago. But the region is only finally getting to the point where they were in 1980. We all know what kind of reforms characterized the period of 1980-2002. We all know the trends since then...
Unconscionably, in a piece obsencibly about poverty reduction, not one mention is made of the place where rates have fallen the fastest, and most impressively = Venezuela. HH poverty rates have gone from 55% in 2003 to 30.1% in 2006 - a more dramatic decline than in even Argentina since their collapse.
Meanwhile, the stats regarding the "golden boys" of Mexico and Brazil had to be cherry picked from other sources to sound convincing. The reality is that Brazil has seen a miniscule decrease in poverty rates since '99 (1.5% points), and Mexico barely moved under Fox. Likewise "market friendly" Costa Rica, Panama and Peru recorded the largest poverty INcreases in that time frame. Conversely, the biggest employment boosts in the last 3 years came in Argentina, Uruguay, Panama and Venezuela. The report takes a special look at Argentina and concludes the ("peronist") economic growth of the last few years resulted in hugely better employment and wage results than during even similar growth periods during the "macroeconomic reforms" of decades previous (pg 120).
It is true that informal and temporary employment continues to rise at the expense of permanent private and State jobs. But this is nothing to applaud, as wages, labor rights, stability and social security all go out the window. The ability of States to fund retirees is becoming in serious doubt. In Brazil and Mexico, fewer workers have SS coverage than in 1990. In fact, in only four countries (Brazil, Costa Rica, Mexico and Peru) did the
purchasing power of wages actually fall during the period. In Mexico the real minimum wage also fell.
The simple fact is that Brazil and Mexico lag well behind the pack in nearly every measure, while Venezuela and Argentina strongly lead. To say, market reforms are "FINALLY bearing some fruit" is more than a little digingenous. Shameful.
There's a reason I wrote:
In the cases of Brazil, Colombia and Mexico, it makes a pretty strong case. For much of Central America and the Andean Region, however, I'm not sure whether that argument currently holds true.
I agree that the reduction in poverty and the rising middle class in Venezuela has a different root than in Brazil and Mexico, which is what this article was mainly about.
The simple fact is that Brazil and Mexico lag well behind the pack in nearly every measure, while Venezuela and Argentina strongly lead.
Maybe they should fin more sharks.
Maybe they should fin more sharks.
Uh, what exactly does finning sharks have to do with Venezuela and Argentina's economic progress in the last three years?
I'm oh so curious.
Ahh Justin, you need to put some fresh batteries in your snark detector.
But you see, Randy, to be an effective snark requires cleverness. When one tries to be a smart ass but comes out looking like a plain old ass, few are entertained.
When one tries to be a smart ass but comes out looking like a plain old ass, few are entertained.
Which is exactly why I can't take you seriously, Justin.
Care to explain what's supposedly clever about the "Maybe-they-should-fin-more-sharks" line? Or are you admitting that you're just a plain old ass?
Justin, the shark fin line was a (incoherent) reference to another conversation about Ecuador's new shark finning policy we were having on RPs blog. I didn't exactly share his righteous indignation at Correa's move to allow accidental shark fins to be sold by local fishermen.
Boz, not only is the poverty reduction and growth in the Latin axis of evil of "a different root" but it is a wholly different magnitude. Again, poverty figures (in the UN report) in Brazil and Mexico have hardly moved in reent years, when the rest of the continent saw gains. I can't attest to the non-comparable, non-contextual figures from some Mexican consultancy group (from which the Economist cherry picked some good sounding stats)...
Justin, the shark fin line was a (incoherent) reference to another conversation about Ecuador's new shark finning policy we were having on RPs blog.
I know what it's in reference to, but the line is, as you suggest, completely incoherent insofar as it has nothing to do with Venezuela and Argentina's economic recoveries.
Sort of like Rush Limbaugh rhetoric, but from a guy who claims to be progressive.
Sort of like Rush Limbaugh rhetoric, but from a guy who claims to be progressive.