In the traditional collection of demographic data in Latin America, it was obviously important to obtain age/sex distributions.  Such distributions are obviously important in the planning for area such as education, healthcare, labor, pensions, etc.  More so than some other places, it was also important to collect information about socio-economic characteristics.  Why?  Latin America is marked by sharp socio-economic inequalities, whereupon social and political policies will impact different classes in radically different ways.

Whereas the definitions of age and sex are unambiguous, socio-economic level is much more difficult to articulate. In the USA, it is customary to use annual household income (before taxes and including wages, tips, alimony, interests and other sources of income) as the single variable that would best encapsulate spending power. This is possible through a unique set of circumstances that do not necessarily exist elsewhere (for example, income taxes are filed each year so that most people in the USA have at least an approximate idea of their 'reported' household incomes). In Latin America, household income is problematic due to a variety of reasons:- hyper-inflation, non-cash and barter activities, unsteady cash flows, absence of household financial bookkeeping, differences in costs of goods and services, as well as a general reluctance to reveal household wealth.

In most Latin American countries, standardized systems of socio-economic levels are in place.  In a number of Latin American countries, the definition of socio-economic level was formulated under the aegis of the national marketing associations.  Typically, these definitions were obtained through a careful examination of a large number of variables and selecting just those essential, non-redundant variables that convey the most information about socio-economic well-being. The approach is necessarily reductionistic, since the objective is to ask as few questions as necessary to determine the socio-economic level.  In each country, the selected variables are those that best reflect the social and economic realities there.  Consequently, it is expected that the definitions would be different across countries.  The differences begin with the number of socio-economic levels and continues to the details in those definitions.  

In the table below, we show the nomenclature of the various socio-economic levels that are in used in the Latin American countries that are currently served by IBOPE Media Information.  This is verily an 'alphabet soup' in which all manners of alphabets, numerals and labels come into play.  

In the following sections of this page, we will provide brief characterizations as well as sample pictures of various socio-economic levels in Latin America.

• Multimillionaires

• Owning rent-producing properties

• Living in comfortable luxury

• Residences located in exclusive residential neighborhoods

• Living like a rich person, but not really so

• Earning high salary at work

• High-level executives or professionals at large firms

• Living in as much luxury as salary allows

• Same habits as Levels "A" and "B" for mass consumption

• Different from Levels "A" and "B" in that they will be affected if they have to quit work

• Members of first-class clubs and organizations

• Children enrolled in first-class schools

• Own or rent residence in residential zone

• Living in comfortable style

• Earning middle salary at work

• Professionals, executives or employees of mid-sized businesses

• Enjoy some of the nice things of life

• Able to easily meet their primary needs

• Live in detached house or modern building in middle-housing area

•  Social positions depend on economic situation

• Able to enjoy some convenience but at the cost of economic sacrifice

• Able to meet their primary needs

• Employees of small business or informal company

• Lower or middle income

• Large family sizes

• Live in heavily populated area

• Live in apartment building or small detached houses

• Almost no convenience goods

• Barely able to meet primary needs

• Low-level worker at small company

• Generally large family size

• Living in heavily populated area or informal housing

• Unable to afford any product or service

• Almost unable to meet their primary needs

• No steady work

• Generally large family size

• Living in makeshift housing (of straw matting, cardboard, corrugated iron and boards) in marginal zones

Why should people care about inequality in wealth?  That depends on who you are.  For example, the market for luxury goods is restricted to those who can afford to pay; therefore, a large wealthy population would yield higher and sustainable revenues.  At a deeper level, there are also concerns based upon reasons of moral and social justice.  If inequality in wealth were solely the consequences of personal choices about work, effort and savings, then people are getting what they desire and deserve.  But if wealth inequality is due either to the legacy of historical problems or contemporary corruption and lack of transparency, then this becomes a major social and political problem.

In the history of Latin America, it is possible to identify many instances of wealth inequality as being caused by foreign hegemonists, multinational corporations, dictators and oligarchies.  In more recent history, though, Latin American countries have been largely democratically elected, and government policies seemed to cater squarely to the median voter and not to a small elite --- committing to universal education and healthcare, providing job training programs, creating environments that attract foreign investments, imposing progressive taxation, stabilizing currencies, imposing price controls, privatizating large government-owned enterprises, etc.  Yet the irony is that the inequality in wealth has worsened during this period.  It would seem that good intentions alone may not be enough to bring about social justice.  Alternately, the rich and powerful are more insidious than we think ...

(posted by Roland Soong, 10/4/2001)

Related Link: 

• Chile and Poverty  Santiago Times, October 22, 2006.

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