Thursday, November 15, 2012

Latin American Middle Class

Outstanding article in Financial Times on the middle class in Latin America. The problem is that things are not changing as much as often claimed.

Rising incomes are, of course, to be cheered. But the World Bank also points to “abysmally low” levels of intergenerational mobility in the region: while people’s fortunes have improved within the current generation, there are still enormous barriers to social mobility between generations. In other words, the class you are born into is a bigger factor than any other in determining your future prospects. The children of poor parents still face daunting challenges making their way in the world. 
“We are measuring the extent of correlation between parents’ backgrounds and their kids’ achievements,” says Augusto de la Torre, the World Bank’s chief economist for Latin America and the Caribbean (though not one of the report’s authors). “The correlation is very high in Latin America compared with other regions. Family background is much more important.” 
De la Torre describes this as a probable result of “self-sorting” behaviour. 
“Better off families send their children to schools that less well-off families can’t afford,” he says. “That’s different from Asia, for example, where public education is relied on by everybody.” 
It’s not just education. Better-off Latin American opt out of public health systems by buying private health insurance. They opt out of public security services by paying private guards – typically sitting in a makeshift hut on the street, collecting monthly payments from residents. They even opt out of public electricity services by buying their own generators.

Yes to all that. Rising incomes are good for everyone, but they can often obscure long-standing barriers to advancement. There's a tremendous amount of de facto segregation.


Justin Delacour 12:05 PM  
This comment has been removed by the author.
Justin Delacour 12:07 PM  

"while people’s fortunes have improved within the current generation, there are still enormous barriers to social mobility between generations."

Indeed, a deeply entrenched problem that is increasingly being replicated by the United States. In fact, if the World Bank were to look at what's happening in the United States with the same scrutinizing eye that it looks at Latin America, it may find that some of the things going on here are even more scandalous. For example, data is now coming out that female life expectancy in the United States is tumbling or stagnating in one out of five U.S. counties. As the Norwalk Citizen just reported, "the last time life expectancy fell for a large number of American women was in 1918, due to Spanish influenza." The trend is quite obviously tied to growing inequality and the increasing economic stresses of motherhood in an era when women are having to work more while getting little federal or state assistance with child care.

Defensores de Democracia 2:54 PM  

VIDEO : This wasn't the best analysis of Cenk Uygur and his American Friend in Bolivia about Latin America - Cenk is very intelligent but his analysis is incomplete : NO mention that the best success stories are Mild Capitalism and not Socialism

Cenk Uygur is very intelligent and I follow him, but this wasn't the best analysis, it's incomplete. And I am not 100% anti-socialist, some countries in Scandinavia are model societies. I don't like Plutocracy and Plutocrats.

The best success stories in Latin America after Brazil can be Four countries of the Pacific Ocean : Mexico, Colombia, Peru and Chile. Cenk and friend do not talk about them. They ignore their success in economic development.

They are capitalist countries and are moving towards some form of mild capitalism and free markets with regulation. They have been slowly progressing without great recessions or depressions and growing at good rates of 5% or more during the last decade.

I agree with Cenk that some other "socialist" countries in Latin America can be happy with their governments and the people can feel some economic progress. But these "socialists" are more backward in any sense than the four of the Pacific Ocean.

Venezuelans can have some "good" standard of living compared to others in that region, but that is due only to Oil Production and exports and not to entrepreneurship, and business acumen. Venezuelan Industry and Entrepreneurship is very backward, static, and castrated by wrong politics. ( compared to better examples in Latin America ).

Whereas in the Four Countries of the Pacific you see more industrialization, Entrepreneurship and economic dynamism.

Latin America - Model for Growing Middle Class?


Anonymous,  1:00 AM  

I don't usually take the time to comment but based on 3 preview comments i'd likely make an exception.

I am a middle class originally from Dominican Republic living in USA. Based on their comments and my experience, all i can see the usual cherry pinking view of 'one story; one view' of Latin America.

This is not to say that their story is not true. It is true. The main problem is that their story is not the only one.

This is an outdated view but still prevalent on some places like Dominican Republic and Honduras, to name a few.

This is mostly a short sight and fewer will be in denial as you wisely declared: [there is an] obscure long-standing barriers to advancement. There's a tremendous amount of de facto segregation."

Anythings else that remain a challenge?
- Well, if you know Latinamericana this is like saying: 'Can you eat an elephant?" How can i start!

I'd like to think that many of those readers and writers on this blog want some change as long as those changes do not treat their traditional statues quo.

This is a big elephant and is still nice, u know to be son/daughter of "papi & mami".

Also it is still nice to has unrestricted access to "inside info" about contracts and loads and have uncles and families in position of authority that know somebody, that knows somebody, that know... (You get the idea)

Where should you bite first?
You need to start somewhere. firstly you should assume that some decision have been made and then attack head on the disclose of confidential information outside of 'the need to know' person.

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