Introduction to Mexico’s Middle Class Expansion
During the recent “Mañanera” led by President Claudia Sheinbaum, the Mexican government unveiled a report titled “Growth of the Middle Class in Mexico.” The report revealed that between 2018 and 2024, the middle class in Mexico expanded by 12.4 percentage points, making it a regional leader in social mobility.
Comparison with Other Countries
To put this figure into perspective, the report compared Mexico’s growth with other nations: Brazil (+7 points), Costa Rica (+6.8 points), Paraguay (+4.1 points), and Honduras (+1.6 points). Conversely, countries like Uruguay (-0.5 points), Ecuador (-1.9 points), Peru (-4.4 points), and Argentina (-6.3 points) experienced a decline in their middle class.
Understanding Middle Class Growth
Two distinct methodologies confirm the same trend. The World Bank, using income measurements, reported a 13.6-point decrease in poverty and a 12.4-point increase in the middle class, indicating a direct transition from poverty to the middle class.
The National Institute of Statistics and Geography (INEGI) corroborated this trend using a multidimensional measurement. The population classified as “non-poor and non-vulnerable” – encompassing middle and upper classes – rose from 29.3% in 2018 to 42.3% in 2024.
Defining the Middle Class
It’s essential to understand that “middle class” refers to a technical threshold, not an aspirational identity. The World Bank defines it as an income of at least 17 USD per person per day, measured using Purchasing Power Parity (PPP) in 2021. This adjustment accounts for real purchasing power based on comparable 2021 prices instead of market exchange rates.
The calculation also considers total current income, which includes salaries, commissions, business profits, remittances, and public transfers (pensions, scholarships, support).
Implications of Middle Class Expansion
The expansion of Mexico’s middle class has several consequences:
- Increased domestic market and consumption as a driver of GDP growth
- Greater fiscal rigidity, as part of middle-class ascension depends on government transfers to individuals
- Credit expansion and pressure for vertical housing and small apartments
- A higher “reserve wage” pushing up salaries and, consequently, service inflation
Middle Class Expectations and Demands
Key Questions and Answers:
- Q: How does middle-class growth impact society? A: The growing middle class leads to increased domestic market consumption, greater fiscal rigidity, and higher demand for housing and services.
- Q: What are the implications of middle-class expansion for government policies? A: The government must address the middle class’s demands for better security, healthcare, education, and mobility services. Failure to meet these expectations may result in political backlash during elections.
