How a middle-class home's expenditures might look. How a middle-class home's expenditures might look. euromonitor international

Mexico’s middle class 47% of households

Research firm defines middle class as having annual income between $15,000 and $45,000

How do you define who makes up Mexico’s growing middle class? The simple answer to the question, which has been the subject of some debate, is people who are neither rich nor poor, says Sarah Boumphrey of the market intelligence firm Euromonitor International.

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But the definition is an important one, as Milenio business columnist Barbara Anderson points out, because it has become an important economic driver.

Euromonitor has gone beyond the rich-poor definition to suggest that Mexico’s middle class is made up of those whose household income is between US $15,000 and $45,000 a year. It’s enough to keep one away from poverty but not enough that you’re rich, says Boumphrey, who was speaking last week at the Mexico Business Summit in Guadalajara.

She estimates that 14.6 million Mexican households — 47% of the total — fall within that income definition, up from 9.1 million 15 years ago. The average household income of the middle-class family is $20,000, a figure that is comparable with India, Russia, China, Indonesia and Turkey.

What the middle class spends its income on is an important question as well because the sector, based on Euromonitor’s figures, is the biggest single contributor to Mexico’s Gross Domestic Product, ahead of petroleum, automotive and tourism, at 70%.

A Euromonitor survey of middle-class Mexicans found that half of household income goes toward discretionary spending on goods and services, meaning they spend more on education, eating out, communications and entertainment.

Middle-class homes are likely to have a refrigerator, a color television set and a cell phone. Only half have a vehicle, which Boumphrey found surprising because of Mexico’s burgeoning automotive sector, they live in urban areas and participate in the formal economy. To have a dishwasher is rare.

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Another finding by the research firm was that for six of 10 middle-class Mexicans financial security is important. In spite of that, however, more than half those surveyed said they preferred spending time with their families over making more money.

Indeed, one of four said they would turn down an employment offer if it meant giving up time dedicated to their personal lives.

Five of 10 respondents said planning their purchases is something they do as a habit. When buying consumer goods most view quality and design as more important than price.

What do they want from government? A social security net, health care, education, law and order and stable economic growth.

Growth in Mexico’s middle class is not expected to slow. Boumphrey forecasts that another 3.8 million households will join their ranks by 2030.

Source: Milenio (sp), CNNExpansión (sp)

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  • Henry Wilson

    Interesting given the fact almost all previous surveys show more than 60% + of the population live in poverty beneath the international poverty line. I don’t know where all of those middle class Mexicans live as in my travels in Mexico I have come across very few of them.

    • Francis Dryden

      Sounds like you stick to the beaches or the bushes Henry! Try Mexico City, Guadalajara, Puebla, Veracruz, Monterey, León, Guanajuato, San Luis Potosi, San Miguel Aliende… granted there is 52% poverty but 47% middle and 5% wealthy sounds right.

      • Henry Wilson

        “Sounds like you stick to the” Gringo Expat communities Francis which have as much connection to the real Mexico as do the barrios of south LA to nearby Disneyland. obviously you have never traveled in states such as Chiapas, Oaxaca, Tabasco, Puebla, Veracruz, etc.

    • Francis Dryden

      Sounds like you stick to the beaches or the bushes Henry! Try Mexico City, Guadalajara, Puebla, Veracruz, Monterey, León, Guanajuato, San Luis Potosi, San Miguel Aliende… granted there is 52% poverty but 47% middle and 5% wealthy sounds right.

    • Josh Byron

      Henry Wilson you’re completely wrong. That poverty rate is based on national poverty line. On international poverty line the percentage is actually quite small, granted international poverty line is the $1, $2, $3 dollar a day type.. but you’re wrong in your assumptions. Sure Mexican Middle class is not like American Middle class, but they don’t live in poverty, not the 47% mentioned here.

      • Henry Wilson

        And you are living in a fantasy world, not the real world of the typical Mexican worker with a wife and children.

  • Pat

    Much of the discretionary spending that the “supposed” middle class spends is not in cash but rather with credit cards. This skews the actual numbers because credit cards are a more recent way to pay for things for the poorer classes. Looking at the default rate for credit cards would put this spending trend in perspective.

  • Güerito

    Average annual family income in Mexico is $9,500 $USD.

    Only 40% of Mexican households make over $8,700 USD a year.

    30% make over $10,000 USD a year.

    And only 20% make $15,000 a year.

    Above $34,000 USD a year is the top 10%.

    So, Euromonitor is describing “Middle Class” as the top 20% in income.

    http://www.excelsior.com.mx/opinion/leo-zuckermann/2015/07/27/1036869

  • Michael Hogan

    90% of the 1,600 students at our school in Guadalajara are Mexicans. The annual tuition is $11,000 USD. There are many schools like ours throughout the Republic. So, some of these comments are clearly mistaken and the article is closer to the truth. I also suspect that the figures quoted below in the comments refer to individual income not household income. Most of our students come from a household where both parents work. They are not rich families but middle class. Rich families send their kids to exclusive private schools in New England or Europe.

    • Güerito

      If you read the Excelsior column I linked to, you’ll see the statistics cited are for family income, not individual earner income. And the stats come from Inegi, the equivalent of the Mexican Census Bureau.

      • Michael Hogan

        Thanks. I just now read the whole column. You’re right it is family income.It was quoting figures from 2012 and comparing them to 2014. There were no USD amounts in the article. So, I assume you were dividing by 17 to get your USD amounts. That skews the figures. Divide by 12 (which was where the peso was at the time) and you have a closer fit to the article and it also makes sense in terms of what I am seeing in our middle class community.

        • Güerito

          Thanks for the response. And you’re right about the currency exchange rate. I used 16.5, but through most of 2014, it was at 13.0.

          So, the adjusted average family income in 2014 was $12,200 USD. And the adjusted numbers show that the top 20% earn about $19,100 USD a year. The top 10% earned $43,300 USD.

          The Excelsior columnist defines the middle class as those that fall into the top 60-90% in family income. That sounds reasonable. To qualify for middle class, then, using the 13.0 exchange rate for 2014, your yearly family income falls between $11,150 and $19,100 USD yearly.

          That’s substantially below the figures used in the study referenced in the article above, which uses a middle class as defined as those earning between $15,000 and $45,000 USD yearly.

    • Güerito

      If you read the Excelsior column I linked to, you’ll see the statistics cited are for family income, not individual earner income. And the stats come from Inegi, the equivalent of the Mexican Census Bureau.

  • Lupe Delg!dillo

    They all lies,just like in the USA about 5% unemployment ,all lies

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