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Everything You've Heard About the Middle Class is Wrong

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January 4, 2013

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Christopher Sabatini, Editor-in-Chief of Americas Quarterly and Senior Director of Policy at Americas Society/Council of the Americas, discusses how Latin America’s vulnerable middle classes can better achieve social and economic stability in a special article for CNN World-GPS. 

Everything you’ve heard about the middle class is wrong

By Christopher Sabatini

Whether its growth is being hailed as a major advance for Latin America or its alleged decline in the developed world is taken as a sign of the global North’s impending fall, the middle class has assumed almost totemic status in popular discussions.  The reality, though, is more complex.

The confusion stems in large part from how we define the middle class.

In the seemingly interminable 2012 U.S. presidential election campaign, the U.S middle class loomed like an endangered species, so much time was spent by the candidates positioning themselves as the savior of the supposedly beleaguered middle class. Lost within the debate was the matter of whether the U.S. middle class was actually shrinking and why – or why not.

According to Brookings Institution scholars Scott Winship and Ron Haskins, the U.S. middle class has not contracted. That’s largely because most measures have failed to include the tax and social benefits that U.S. policy provides and are currently on the chopping block in the negotiations over the fiscal cliff.

Maintaining or expanding state support, though, is not enough. As Winship and Haskins argue, to rise above this state-supported floor, what is required is a more competitive educational system (the U.S. ranks among the lowest scorers in international student achievement tests) and job growth. In short, the answers to the U.S.’, until now, non-shrinking middle class is a mixture of state and market.

Then there’s the issue of the middle class in the emerging economies. Here there’s a lot of variety that belies the optimism of businesses and economists. World Bank economist Luis Felipe Lopez-Calva provides one of the objective and realistic analysis of Latin America’s middle class, arguing that the threshold is $10 income per day.

Even here though, two questions emerge. The first is the vulnerability of the middle class. When many discuss the middle class, they carry a load of assumptions about the middle class’ security and political orientations – much of this based on the role and imputed role of the middle class in economic and political development in more developed economies.

Few of those apply to Latin America.

Read the rest of the article here.




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