Middle class now rivals poor in Latin America: World Bank

Tue Nov 13, 2012 1:31pm EST
 
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By Anna Yukhananov

WASHINGTON (Reuters) - Rapid economic growth and more inclusive social policies in Latin America in the last decade have lifted 50 million people into the middle class, which for the first time rivals the poor in number, the World Bank said in a study on Tuesday.

"Most countries in the region are on their way to becoming middle-class societies; this represents a historic change," World Bank President Jim Yong Kim told reporters.

Rising income levels have also created a 'vulnerable' class, which at 38 percent makes up the largest income group. These people 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, the global development lender, said in a report looking at the middle class and economic mobility in Latin America and the Caribbean.

The World Bank measures the middle class as people who have economic security, facing less than a 10 percent chance of falling back into poverty. For the region, that translates into a daily income of $10 to $50 per person.

Roughly thirty percent of the population now falls into that category, equal to the third of people still in poverty -- a remarkable shift in a continent that has been known for its vast income inequalities, dominated by the poor and a narrow slice of the rich.

Latin America is now the only region in the world with narrowing income inequality, the World Bank said in a report last month, though the rich-poor divide remains higher than in most developed countries.

OUT OF POVERTY   Continued...