DEVELOPMENT-ARGENTINA: Middle Class Suffers Identity Crisis

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Dec 7 2000 (IPS) - Argentina’s traditional middle-class is caught up in a silent identity crisis. This previously homogeneous sector, with its dreams of prosperity, is breaking apart, with most of the fragments falling into poverty.

The statistics, which fail to reflect the widespread sense of anxiety over declining living standards, indicate that 48.2 percent of Argentines with incomes below the subsistence level once belonged to the middle-class, and now make up the category of the “new poor” or the “income poor.”

While hyperinflation was the most pressing public concern in the early 1990s, today it is high unemployment, which officially stands at 15.4 percent. Social workers who assist the homeless say there is also a category of “new homeless” – young males with schooling and middle-class backgrounds.

According to the Foundation of Research on Economic Development, a family of five needs at least 1,280 dollars a month to cover the basic basket of essential goods and services. The new poor, meanwhile, have an average monthly income of 490 dollars.

At the other end of the middle-class spectrum are the “nouveau riche” or “upper-middle-class”, a minority who in the 1990s saw their living standards rise even more than expected.

“They travel to Europe, and have houses in ‘countries’ [upscale residential areas on the outskirts of the capital] and imported cars,” said pollster-analyst Rosendo Fraga.

At the middle range of the spectrum are the professionals, retailers, teachers and skilled workers who have stable incomes and a consumption level which, although lower than that enjoyed by their parents in their day, at least allows them to cling to their middle-class status and lifestyle.

“The gap between those who rose from the traditional middle- class to the upper-middle-class, or who sunk to the lower-middle- class, is as wide today as the divide between the upper and lower classes in the 1960s,” said Fraga, director of the New Majority Research Centre.

A study by the Equis consultancy indicated that the category of the “new poor” has grown the most in recent years, while it is also the bracket that has been most heavily ignored by the government. The “income poor” have education but no jobs, or severely diminished resources.

In this Southern Cone country of 38 million, 14 million people have fallen below the poverty line, in both urban and rural areas, according to Ministry of Social Development reports released this year.

The director of Equis, sociologist Artemio López, told IPS that 60 percent of the poor in the city of Buenos Aires came from middle-class backgrounds. “They live in well-constructed homes, and have a good level of schooling, but they are ‘income poor’ and are caught up in a situation of socioeconomic decline.”

Social psychologist Alfredo Moffatt, director of the cooperative El Bancadero, a mutual support group providing psychological assistance, said the sensation of failure, uncertainty and fear of continuing to slide is overwhelming for the middle-class, who are not accustomed to living in poverty.

“There is a loss of identity in general, which depresses and distresses people from the middle-class, rather than generating a sense of indignation and anger,” said Moffatt. “Education no longer guarantees access to employment, the youth feel like they don’t belong, and alcoholism is increasingly showing up among the young.”

Only a small fraction of the middle-class has been able to situate itself in such a manner as to avoid the decline, he added. “They are the ‘skilled labour’ of the system,” he said, referring to managers and executives of large companies, who continue to enjoy a high standard of living.

Parallel to the phenomenon of the sliding middle-class income has been the disappearance of the welfare state that guaranteed free education and high-quality health care, stable, well-paid jobs, and public utilities – gas, power, telephone and transport – at affordable rates.

The private sector’s growing participation in education, health and other public services drove up costs in those areas, leaving less income for other expenses. The middle-class have increasingly had to do without restaurants, the movies, the theatre, vacations, cars, books, transport in taxis instead of buses, clothing, or home repairs and improvements.

The more than decade-old decline in consumption among the middle-class hit a new low over the last year due to the heavy recession and the continuing high rate of unemployment.

The Graciela Romer y Asociados polling firm found in a survey last month that 88 percent of the middle-class “was unable to save money” in the previous 12 months, and that many were forced to cut back on consumption.

Of those interviewed for the Romer study, 74 percent said they had cut their recreational activities over the previous year, 69 percent had stopped going on vacation, while 68 percent began to choose lower-priced brands of food.

In addition, 58 percent bought no home appliances, 56 percent found it difficult to pay their utility bills, 52 percent made no repairs to their homes, and 44 percent stopped taking taxis, buying books or paying for professional development courses.

Meanwhile, 28 percent of respondents said they had cancelled cable TV – to which subscription is widespread in Argentina – 22 percent sold their cars, 20 percent fired their domestic help, and 20 percent found a cheaper source of health insurance.

“I got a job as a professor at the university just to have health insurance,” psychologist Rosaura Paulero told IPS. Her new post only pays 70 dollars a month, but she and her husband and two kids will have access to the university health care services, meaning a monthly saving of 210 dollars in private health coverage.

But the middle-class hold strong to their belief that the route of education will provide them with opportunities for betterment similar to those enjoyed by the wealthy: just four percent of respondents said they had pulled their children out of private school, Romer pointed out.

Two middle-class couples, with two children each, commented to IPS that the area of spending they were not willing to cut was their children’s tuition.

Fabián García, the owner of a small ice cream parlour, works day and night in his company when business is strong. In the winter, he closes and works as a private chauffeur. His sons are nine and 11, and go to a bilingual private school that costs 420 dollars a month for each boy.

“It’s an excellent school. They learn English, and they go to a sports camp for rugby, hockey, soccer or track,” said García, while scooping out ice cream. He has to sell thousands of cones to be able to afford his children’s tuition.

Adriana Oliveira, married with two children, finds herself in a similar situation. She works in her father’s cardboard box company, and her husband is a public employee.

“We have monthly bills amounting to 2,000 dollars a month, nearly half of which is the kids’ tuition. Sometimes we’re tempted to pull them out of private school, but I think that as long as we can hold out, we have to make the effort because….where else would we send them?”

Oliveira works full-time, which means that in the eight hours she is at work, her kids are in school, and “luckily” there is no need to pay for a baby-sitter or nanny. The cooking, shopping and other chores are done in the evening. “We all pitch in, because we can’t afford to pay someone to help,” she said.

The responses to Romer’s study also highlighted the middle- class concern of “saving” the children from the decline. When asked about the future that lay ahead for their children, 75 percent of respondents said they believed the country would be in the same situation or worse in 2001, while 46 percent said things would remain at a standstill in 2010.

In a Latin America survey conducted earlier this year by the World Bank, 63 percent of Argentines interviewed said their living standards were lower than those of their parents.

Perhaps for that reason, 50 percent of middle-class respondents told Romer that they would like to leave the country to which their forebears emigrated from Europe – mainly Italy and Spain – nearly a century ago in search of a promised land of opportunity and good living, while 38 percent said they would recommend that their children emigrate.

At the turn of the century, Argentina was the tenth-largest trading country in the world, and the sixth in income per head.