There is much media coverage about Latin America's economic growth and how in the last decade 50 million have been lifted out of poverty. Spectacular growth is notoriously easy from a low base. Less said is the fact that 38 per cent, the largest income group, are those who hover just above poverty, living on a daily income between $4 and $10 per person. "As poverty fell and the middle class rose ... the most common Latin American family is in a state of vulnerability," the World Bank said.
The World Bank measures the middle class as people who have economic security, facing less than a 10 per cent chance of falling back into poverty. For the region, that translates into a daily income of $10 to $50 per person. Roughly thirty per cent of the population now falls into that category, equal to the third of people still in poverty.
While families have improved their situation in the last decade, children are often still bound by the incomes and education of their parents, meaning mobility between generations remains low, the World Bank said. "The poor from an intergenerational point of view suffer a double whammy. They are poor…and they are likely to stay there," said Mr Augusto de la Torre, the World Bank's chief economist for Latin America and the Caribbean.
If Argentina was 47 percent middle class in 1983 and 46 percent middle class now (according to the World Bank), where is the real, long-term progress?
Argentina’s official inflation data and a repressed exchange rate give an unduly rosy view — middle-class status is gained for as little as a monthly 1,425 pesos on the World Bank scale (7,125 at the top end) so that in these terms a middle-class Argentine could be earning less in pesos than a pauper in dollars in the United States (where the poverty line is an annual 23,050 dollars or 1,920 dollars a month). The World Bank report quantifyies the poor at 16 percent with the “vulnerable” (on the brink of poverty) 35 percent and an upper class of only three percent.
The World Bank measures the middle class as people who have economic security, facing less than a 10 per cent chance of falling back into poverty. For the region, that translates into a daily income of $10 to $50 per person. Roughly thirty per cent of the population now falls into that category, equal to the third of people still in poverty.
While families have improved their situation in the last decade, children are often still bound by the incomes and education of their parents, meaning mobility between generations remains low, the World Bank said. "The poor from an intergenerational point of view suffer a double whammy. They are poor…and they are likely to stay there," said Mr Augusto de la Torre, the World Bank's chief economist for Latin America and the Caribbean.
If Argentina was 47 percent middle class in 1983 and 46 percent middle class now (according to the World Bank), where is the real, long-term progress?
Argentina’s official inflation data and a repressed exchange rate give an unduly rosy view — middle-class status is gained for as little as a monthly 1,425 pesos on the World Bank scale (7,125 at the top end) so that in these terms a middle-class Argentine could be earning less in pesos than a pauper in dollars in the United States (where the poverty line is an annual 23,050 dollars or 1,920 dollars a month). The World Bank report quantifyies the poor at 16 percent with the “vulnerable” (on the brink of poverty) 35 percent and an upper class of only three percent.
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