Myth and Reality: How much do I need to earn to be middle class in Mexico?

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The Inegi, through a study, revealed the average income that a middle-class person receives on a monthly basis.

The issue of social classes in Mexico always sparks an intense debate, since it is not easy to determine in which rank a family is, in addition to the fact that people are recurrently placed in strata higher or lower than theirs, so no one knows exactly. where does it belong?

7,594 Clase Alta Imágenes y Fotos - 123RF

However, in order to shed some light on this debate, the National Institute of Statistics and Geography (Inegi) has carried out an exercise since 2010 to measure social classes in the country, which led it to create the analysis ‘Quantifying the middle class in Mexico’.

To carry out this study, quantitative and qualitative aspects of the economic and sociological issues of the population were taken into account, so now it is known how much you need to earn to be part of the middle class.

According to Inegi and based on spending patterns in the National Household Income and Expenditure Survey (ENIGH), middle-class households have an average monthly income of 22,297 pesos.

In urban areas, on average a ‘middle class’ household has an income of 23,451 pesos per month, while in rural areas the monthly average is 18,569 pesos.

What other characteristics does the middle class have?

According to Inegi, until the year 2020, 42.2 percent of households in the Mexican territory belong to the middle class, which represents 37.2 percent of the total population.

Most households in this sector live in Mexico City, followed by Colima, Jalisco, Baja California, Sonora, Baja California Sur, Quintana Roo, Sinaloa, Nayarit, and Aguascalientes.

55.9 percent of the middle class works as a formal wage earner, and 43.2 percent is a director, manager, or boss while only 6.4 percent is an independent worker.

Perteneces a la clase media? - Rankia

In addition to an average monthly salary of 22,297 pesos, other characteristics of the middle class are that some have access to domestic services, private school, credit cards, pay TV, car, and internet.

Most of their expenses are focused on gasoline, consumption of food, beverages, and tobacco outside the home, clothing, and footwear, education, culture, and recreation, as well as debit cards.

No, you’re not middle class

Many Mexicans believe they are middle class. Most are wrong. The misunderstanding prevents solving the most pressing problems of the country and perpetuates policies that only benefit the elites.

Many in Mexico believe they are middle class, but they are not. 61 percent of the population identifies as such but only 12 percent is. Half the country lives with a serious misunderstanding about their income level, a confusion shared by rich and poor alike.

It is imperative that the average Mexican stop deluding himself about his standard of living. The reality is that 84 percent of the population does not have job security or a salary that allows them to meet the needs of their family, but they deny it. Denying reality prevents having concrete and clear political demands.

Like a doctor who must first assess what disease his patient has, the average Mexican must be able to accurately diagnose his shortcomings or privileges in order to know what to ask of the authorities. It is time to start doing it to strengthen the middle class and demand the necessary policies to expand it.

However, in Mexico, no one seems to be very honest with their own diagnosis.

The rich think they are middle class. Alice Krozer’s studies have shown that even among the nation’s richest 1 percent, two-thirds believe they are middle class. The myth that we-are-all-middle-class is repeated at all income levels: Mexicans who earn 120,000 pesos a month, for example, believe they have an “average” salary when in reality they earn more than 90 percent of the country.

The same happens among the poorest. Considering that 61 percent of Mexicans believe they are middle class, including two-thirds of the richest, there are at least 43 million Mexicans who live in moderate poverty but believe they are middle class. They are not, because to be middle class they would need to earn 64,000 pesos a month for a family of four, a salary level that only the richest 10 percent in Mexico earn.

It is not enough to stop being poor to be middle class. In fact, there are almost 37 million people who are not technically poor but have basic needs such as access to health, social security, or education. This is because the Mexican government’s poverty line is too low. CONEVAL calculates that with 3,200 pesos a month a person can meet all of her needs, something far from reality in many areas of the country.

To be middle class, according to the Social Development Index of Evalúa of Mexico City, it is necessary to have sufficient income to satisfy the needs of education, health, sanitary services, drainage, telephone, social security, electricity, fuel, basic durable goods and not work more than 48 hours a week. On average, the middle class in Mexico achieves this by earning an average of 16,000 pesos per person.

The federal government must not focus exclusively on eliminating poverty but must become a mediator for a deep and urgent expansion of the middle class. It is correct that López Obrador’s agenda is to temper poverty, but this is only the first step. The creation of a strong and broad middle class must be the ultimate goal of his administration.

Among the 15 million Mexicans who are indeed middle class, there is an even more important responsibility: to understand that they are in danger of extinction and that they will continue to do so as long as they continue to think that they must share their political agenda with the richest. The rich do not represent the middle class. The current economic model does not promote social mobility but rather stagnation. Right now, members of the middle class are more likely to become poor than rich.

That is why the middle class must wake up and manage to create a specific economic agenda. And for this, Mexicans must face their preconceived ideas with data and information.

An important myth to overthrow is the widely held idea that incomes in Mexico do not rise due to a lack of education. In reality, as the study by Nora Lustig, Gerardo Esquivel and Raymundo Campos has shown, which analyzes data from 1989 to 2010, Mexicans have significantly increased their educational level without increasing their income. Productivity has also increased. Wages don’t.

In fact, in Mexico, education pays less and less and this is especially true among Mexicans with higher secondary education. Part of the reason that inequality fell, on average, at the beginning of this century was not because the income of the most educated increased, but because educated people who used to find good jobs now no longer have them.

In part, this is because Mexican shareholders and bondholders have become accustomed to getting the whole pie. While in the United States they only keep 21 percent of the added value created by the company, in Mexico, they keep 71 percent.

It is time to eliminate the myth that the country has a large and broad middle class. That prevents creating a political coalition that changes the way of doing business that has caused the middle class not to grow. And that has concentrated purchasing power in a handful of families.

The agenda of this new middle-class political coalition must understand, among other things, that increasing education is not enough to create development. And that creates formal jobs either. There should be talk of promoting salary recovery and promoting the reform of the tax code so that the richest 10 percent do not have the same tax burden as the ultra-rich. The State must grow to invest in quality public services and prevent the middle class from having to resort to paying for private services, despite paying taxes to have access to public services.

Among the most critical agendas must be the elimination of monopolies that have enriched a few at the cost of weakening the small businessman and charging high prices for the products they offer. The fortunes made under the cover of power are especially toxic for the middle class.

The State must become a development lever that supports productive industries that generate good jobs and competitiveness through innovation and quality. It must always be clear that generating wealth for all is easier than generating wealth for a few, and then having to fight politically to redistribute it.

Mexico Daily Post

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