Politics, Business & Culture in the Americas

Peru: Counting and Being Middle Class

Reading Time: 4 minutes

Olga Meza with husband, Milton, and their son in Lima. Photo: Jahir Chavez

Reading Time: 4 minutes

Olga Meza, 31, has a job that gives her an insider’s understanding of Lima’s growing middle class: she conducts surveys for Ipsos-Apoyo, going door to door to find out what’s on her neighbors’ minds.

Thanks to her work with the Brazilian-Peruvian survey firm, Olga knows exactly where her family fits in the the Peruvian economy. “We belong to socioeconomic level C,” she says proudly. “Middle class.”

According to Ipsos-Apoyo, Group C has become the largest and fastest growing group in Lima, representing 35 percent of the city’s population. Another poll, by Arrellano Marketing, found that 57 percent of Peruvians identify themselves as middle class—twice as many as eight years ago. Meanwhile, Peru has posted one of the region’s most rapid growth rates over the past decade—reaching 9 percent before the global financial crisis.

The emerging consumer class in Peru isn’t just a sign of the country’s growth; it’s now also a fundamental part of it.

As a result, families like Olga’s are courted by politicians, banks and companies selling shiny new things like the 80-centimeter (32-inch) flat-screen TV hanging in Olga’s living room. Their next purchase will be a car, to help Olga’s husband, Milton, a taxi driver, earn more money on the job.

Milton, 30, works 13 hours per day, six days a week, earning 1,300 soles ($500) per month. Still, his formal employment means he gets health insurance and social security and can qualify for credit cards and loans—benefits which Olga (a part-time worker) and some 80 percent of Peru’s middle-class population who work in the informal sector don’t have access to.

But being a new member of the Peruvian middle class isn’t easy. Olga and Milton work exhausting schedules to support their two children—a toddler and a teenage daughter. They hope to save enough to buy a home one day—even as they are nagged by the knowledge that it could all slip away if Peru’s economic fortunes decline.

“I can plan out the rest of our life, but really, no one knows what will happen tomorrow,” says Olga, who is now conducting a survey for a Peruvian beer company, which brings in an extra 700 soles ($270) per month.

Sunday is one of the few days Olga and her husband can share a hot meal together. Stirring a lamb and cilantro stew to be served with beans and rice, Olga explains that her family usually eats chicken or fish, but enjoys red meat every 10 days or so.

Upstairs, four of Olga’s adult brothers and sisters are busy tending to their own families. The five siblings live largely independent lives, but share the three-story, 10-bedroom house their mother built room-by-room in the 1970s when their neighborhood, Villa El Salvador, was still a dusty slum perched on the hills of Lima.

With the growth of Lima’s middle class, Villa El Salvador itself has undergone a revival. After residents banded together to secure basic services like electricity, water and sewage, the former shantytown became an official district of metropolitan Lima, complete with a mall, an industrial park and office buildings.

Now it’s one of about two dozen districts on the outskirts of the city where much of Peru’s new middle class grew up—often through the sacrifices of migrants like Olga’s mother, a domestic servant, and her father, a gardener.

Her parents met in Lima after migrating to the capital, like many rural Peruvians longing to escape the intense poverty of life in the interior. And like thousands of others, they achieved upward mobility for their children and the shantytowns where they settled. “My mom saved and saved to make this possible,” Olga says. “She wasn’t just a maid; she also sold plants and foodstuffs. But almost everything she earned, she saved.”

Olga and Milton say they are now outgrowing the house and the community they have long called home. The couple also wants to move away from Villa El Salvador to a safer neighborhood. Crime is one of their biggest concerns: they and their neighbors have fashioned metal gates at the end of the residential roads to block access to burglars.

“It’s a gated community,” Olga’s brother, Arturo Meza, jokes in English. He’s visiting Peru for the first time since migrating illegally to the United States 13 years ago.

Arturo was amazed by the changes he saw in his old neighborhood and in his country since he returned. He is now considering whether to join the estimated 80,000 Peruvian migrants who have moved back to Peru since the global financial crisis hit between 2008 and 2009.

“I might come back in the future to start a business here,” he explains, noting that he makes $40 an hour as a foreman for a plumbing company in Fontana, California. “But it doesn’t make sense to try to get a job here in my field. Wages in Peru just can’t support the kind of lifestyle I’m used to now.”

While Peru’s mineral wealth has traditionally powered its economy, making up 60 percent of export earnings and 20 percent of tax revenues, growing domestic demand is now driving the country’s solid growth rates. Thanks in part to the rising consumption of families like Olga’s, Peru’s economy is on track to expand around 6 percent in 2012.

That has given many Peruvians who have struggled to achieve middle- class status the confidence to imagine a better future for their children. Olga and Milton often attend Lima job fairs in search of better earning opportunities that will provide the income to ensure that their 14-year-old daughter, Araceli, goes to university.

“I want my daughter to be a professional. That’s my dream,” Olga says. That’s why she and Milton pay $75 per month to put Araceli in a private school. “I went to a public school and I know what they’re like,” she adds.

“Sometimes, when I do surveys in wealthy neighborhoods like Miraflores and Surco and I see how people live there, I think, ‘How did they get there?’” Olga says.

“I think a lot of them have inherited money from their parents, but I also think some of them got there by working hard. And I think we can do it, too.”

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