Class in Latin America

The expanding middle
A decade of social progress has created a bigger middle class—but not yet middle-class societies 

The Economist
Nov 10th 2012

JAMMED onto a spit of land that juts into the azure Atlantic near the centre of Recife, in Brazil’s north-east, Brasília Teimosa was until a couple of decades ago a favela of wooden fishermen’s huts. Now its streets are lined with brick houses, some of three stories and clad in decorative tiles but others jerry-built. It has seafood restaurants, shops and a couple of bank branches, but also piles of uncollected rubbish. Many marketing types and economists would hail its residents as members of Brazil’s burgeoning “new middle class”, who have become avid consumers.

That is not how Francisco Pinheiro, a community leader who was born in Brasília Teimosa, sees it. “Economically, it’s much better off than it was,” he says. “But a middle-class person is someone who lives in Boa Viagem”—a smart beachfront residential suburb close by—“with a car, an apartment and an income of 3,000 reais ($1,500) a month.” In Brasília Teimosa, he adds, the majority earn less than two minimum wages ($613)—often shared among a family of four or more.

As it happens, Mr Pinheiro’s finely-tuned sense of social class fits neatly with the definitions deployed by the World Bank in a ground-breaking new study. Having crunched the numbers from household surveys across the region, it reckons that Latin America’s middle class expanded by 50%, from 103m to 152m, between 2003 and 2009. That represents extraordinarily rapid social progress. But it means that only 30% of the region’s population is middle class (see chart). A larger group has left poverty, but only just, as have many of those in Brasília Teimosa.

What it means to be middle class is a matter of definition and debate. Sociologists and political scientists define the middle class according to education, occupational status and ownership of assets. Economists, by contrast, tend to see income as determining class.

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