Fotografo de Bodas, Santiago

August 22, 2011

Let’s talk middle class in Chile.

I’ve heard many people I know who live here mention that they are middle class. I usually don’t say anything, because why fight? But usually the people saying this, are not. Even Seba’s family, who lives in Estacion Central is not. They’re upper class.

The problem is the circles we run in. Of my Gringa friends, most travel back and forth to the U.S. at least once a year. Of my Chilean and Gringo friends, not all, but lots of them have cars. For the most part, they live in Providencia or Bellas Artes. They go out to eat fairly often. They live good lives.

And while YES, there are even higher up barrios altos, I think a lot of people fool themselves into thinking that Providencia is not a barrio alto. It may not be the highest of the barrios altos, but it’s certainly not living in the slums. It’s more than a middle class neighborhood. My guess is if you went by the income chart below, you’d find mainly people living in Providencia who are amongst the top 30% of earning households in the country. That’s just a guess, I couldn’t find data to show what average income is per neighborhood in Santiago.

For those of you who don’t know, a barrio alto is both a geographic and a sociographic term in Chile meaning a “high neighborbood.” These neighborhoods are physically higher up in altitude towards the Andes and are also populated in general by families with higher income levels.

According to this graph, the average income per family in Chile in 2009 was 735,503 pesos a month. At today’s exchange rate, that equals 1,570 dollars.

Average incomes are always screwed up though because you just know that somewhere out there some dude is making like 200k a month and put that in the survey and totally messed up the results. And yeah, the same can happen with people on the low end of the spectrum, however, you can’t get any poorer than zero dollars a month, whereas the high end of the spectrum can always keep going up and up and up and there’s no cap.

This graph is a little hard to explain — I had to send out an email asking for help! So basically, the chart is divided up into tenths or deciles. For example, the far right X, that’s the first tenth of the population. So 0-10% of all homes in Chile make 2,958,175+ per month. That’s $6,315+ dollars a month according to today’s exchange rate. 0-20% of all homes in Chile make 1,149,137+ per month. Last year Seba and I made enough to be on the very high end of the IX decile. In all actuality that means we probably made, I’d guess, more than 88% of all homes in Chile and less than 11% of all homes in Chile. That’s pretty mind boggling when you consider that we don’t feel materially rich. I see how people make the mistake of feeling like they’re middle class in Chile, even though they’re not. We were denied a mortgage by the bank multiple times. We have to watch our spending. We budget. We have an old car that’s falling apart. We save, but very little, for retirement. All that doesn’t make us feel like we are in the top 11% percent of highest earning families in Chile, but we are.

ETA: I’ve had multiple explanations for how these deciles are actually interpreted and Emily says, “I think the top decile is an average of $2.9 millones al mes, not $2.9 millones and above. So that actually makes it kind of crazier because in the top 30% it’s not that everyone’s making over $819,000. Some of them are making less (to make the average of that 10% what it is), and they’re still considered top 30%.”

The thing is though, that Chile is EXPENSIVE. If you’re making 625,524 pesos a month, especially between two people, odds are good that you feel like you’re scraping by — according to this, in 2011 the average cost of rent per month in Santiago is 104,000 pesos, though I can’t imagine that price being for rent anywhere I’d feel safe living. So considering the demographic group of people we’re talking about to live in Providencia, El Centro, parts of Nunoa or Las Condes, I’d say the average spent on rent there would probably be closer to 200,000 pesos. Add in another 200,000 pesos per month for food. Plus say 50,000 for things like gastos comunas, electricity, water, etc. Then let’s add on 30,000 more for internet. Add onto that 100,000 pesos per month if you’re paying for private health care for two people. With that, your total is 580,000 a month. You’re left over with 45,000 pesos for any unexpected expenses. It’s crazy to me that somebody making more than 60% of the country can have trouble scraping together enough cash to live a “middle class” life.If you and your partner (boyfriend/girlfriend/person you live with/whatever) make a combined total of 625,524+ then you fall somewhere from 0-40% of the highest earners in the country.

And let’s not even talk about a household with children making that amount. How is it even possible?

Where do you fall on this spectrum? If you’re in say, the top 30% of highest earners in Chile, do you feel that you’re living a rich lifestyle?

If you enjoyed this post, please click +1 or Like! It’s really helpful for me and my business, so I appreciate it!

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30 Comments

First of all I absolutely LOVE that picture. Second of all, I found this post really fascinating. I think a lot of people are really in denial about what class they’re in (my wealthy uncle for example thinks he is middle class because he has friends who are much wealthier than he is…?).

Also I have a blog post request, I just got a new camera (a Cannon G12), But I was wondering if you had any posts or would be willing to write a post about switching to manual (a reminder course in how to use aperture priority for example).

And while I am requesting things – do you have a post about how you came to Chile? you mention it sometimes and i am FASCINATED.

Comment by Deidre — August 22, 2011 @ 7:20 pm

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That’s so true Deidre, a lot of people are in total denial, heck, even I have my moments of denial….

As for a photography starter course, as far as the basics go, you’d find far more better explained info here: http://www.digital-photography-school.com/ I’m sorry to say that especially when it comes to point and shoot cameras, I am totally lost! And aperture priority and things like that are far better explained by people who have a knack for teaching…not me

However, a post on coming to Chile, that I can do. I’m trying to think of whether I have one of those already or not. I’ll look and see and if not write!

Comment by kyle — August 22, 2011 @ 11:57 pm

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Great post Kyle!
I have lived in many parts of Santiago from Santa Rosa Paradero 20 to Independencia and from Santiago Centro (SUPER ENTRETE!!!) to Las Condes.

Would you believe that I shared a room (if you can call it that, because it wasn’t part of the house, more like a tool shed, with some bunks) with a Peruvian friend for $5,000 a month (pesos, not dollars… and yes only 4 digits). You can imagine what it was like! We had to use a blue baby basin that we had to fill with water from an outside tap and clean ourselves under the sun/clouds. (The old had of a lady never wanted us to enter the house)

So I know where you are coming from when people who live in Provi say they are “only” middle class. It IS a nice area, MORE than middle class and as you know, the closer you get to the mountains, the more hideously wealthy the houses (and families) get and these Provi dwellers are probably just comparing themselves to the “mountain folk” and don’t realize just how lucky they are.

Comment by A Kiwi in Chile — August 22, 2011 @ 7:33 pm

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5 lukas a month?!?! HOLY COW. That’s probably the most impressively low rent I’ve ever heard of.

Anyways, so yeah, you know that Providencia isn’t “only” middle class.

Comment by kyle — August 23, 2011 @ 12:03 am

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My Peruvian roommate also paid $5.000 so it was $10.000 in total, and yes, it was during my first time in Chile in 94-95. The sector was very “dodgy” but the locals took care of the only “gringo” mad enough to live in that part of town.

Comment by Rob W. — August 23, 2011 @ 6:03 am

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Great read, Kyle. I think what you talk about is more or less everywhere in the world. My wife and I feel like we are barely getting by, but we both have professional well paying jobs (close to +$6k per month).
Averages are always skewed for the exact reason you said. That’s why it is more important to look at the mean that the average.
Also, I believe perception is based on their lifestyle and the company they hang around. What most people see is friend1 owns a Lexus, and friend2 has a mansion. What they fail to see is that friend1 doesn’t own a house, and friend2 doesn’t own a car. But what you’re left with is that you need both of these or you’re a “lower class’ than your friends.
What scares me the most is what people are doing to survive in the lower 30th percentile. To live in a unsafe neighbourhood and working minimum wage jobs just to afford food and rent. That’s a scary thought.

Comment by Ryan Chan — August 22, 2011 @ 8:05 pm

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That is true, I guess I have never seriously pondered how this same problem manifests itself in other countries. Chile has a bigger income divide and less of a true middle class, which makes the problem here seem more blatant. But you’re SO right, we always compare ourselves to the haves, not the have nots.

Comment by kyle — August 23, 2011 @ 12:05 am

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I think it all comes down to perception and who your peer group is. When I look back on it now, I guess that I grew up in an upper middle class household- we lived in a big house, had 3 to 4 cars, travelled a lot and never wanted for anything. My parents were always able to shell out money for field trips and stupid expensive things that I wanted like Xbox-es and Super Nintendos. But I always viewed myself as middle class because I thought we were just the norm, and all my other friends had all the same things. We weren’t in denial… We were just unexposed to how other people lived so we didn’t realize we had it good. I definitely saw the same thing when I lived in Mexico, but I think that, like Chile, there was more of this assertion of being the “everyman”- therefore absolving some of the upper-class to rich Mexicans of some of their guilt for having so much when their brethren (who were often their drivers, maids, etc) were struggling.

Comment by Oneika the Traveller — August 23, 2011 @ 4:25 am

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Yeah it’s funny how that works. I always felt like the poor one because my mom couldn’t afford all the vacations and things that the other kids have. And now I realize, MAN, did I have it good. We were rich! Well maybe that’s pushing it, but we certainly weren’t bad off…

Comment by kyle — August 23, 2011 @ 12:11 pm

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Thought-provoking post, Kyle. I think the issue here is that “middle class” is more than just income. A sociologist or economist could explain this far better than I can, but class can be defined in many ways, and income is a part of it, but since income changes over the course of a lifetime and the identification of class generally does not, we need to look to other factors, such as education, profession or occupation, power, authority, prestige, affiliations, etc.
One way to define classes is upper (elite, what Chileans refer to as the “aristocracia), middle (which contains many levels but generally refers to white collar, “mental” workers), and working (blue collar, physical workers). According to that traditional definition, los barrios altos de Santiago are very much populated by the middle class. Which clearly does not mean that they are in the middle of the income scale.
En fin… it’s a complex issue that has long been the debate of social scientists around the world…

Comment by Margaret — August 23, 2011 @ 5:55 am

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Yeah, there are a lot of ways to vide middle class, but in this case I’m mostly just referring to income levels and how people perceive themselves (not necessarily in regards to their white or blue collar standing). Whether you call it middle class or not, a lot of people who make way more than an average salary, tend to think that they are living an average lifestyle in Chile, when that’s often not the case. Does that make sense? I’m not very good at at explaining myself!

Comment by kyle — August 23, 2011 @ 12:15 pm

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This is a fantastic post. You’re right on about the disparity. I’ve been able to see a very broad spectrum of lifestyles here in chile with friends in all different classes and it’s been an eye opener. What I am amazed about is how people here in Chile have to borrow on credit from the grocery store just to buy milk and eggs for the week. And that’s a decent amount of people. It’s outrageous how much the basics cost here (I’m just talking about food and clothes). It’s interesting when some of the “middle class” people I know in the US tell me they can’t afford something important… but they’re not talking about meat for the week so they can eat like people I know here in Chile. They’re talking about going out for a 3rd time in the week to margaritas or for a super cool iphone4. Isn’t life funny?

Comment by Angie — August 23, 2011 @ 6:00 am

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Angie, that’s really great that you’ve been able to meet people from different lifestyles, I think a lot of gringas don’t necessarily experience that and in part those are some of the people who think they’re living an average lifestyle because they’ve only seen how those in their very small world live….

Comment by kyle — August 23, 2011 @ 12:17 pm

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Agree!! I’m in the VII decile, but I only have one person in my household. And some months I feel like I’m just scraping by, but I am paying back student loans with that and so sometimes it’s TIGHT. I can’t imagine supporting two people or more on that!

I think because Santiago is so segregated by socioeconomic level, many residents might not realize how good they have it living in Providencia.

That being said, I also think poverty is not as obvious sometimes here because of the easy access to credit. So someone might have nice clothes, a car, a TV, apartment, etc, but be in debt up to their eyeballs. Someone once call it “pobreza de terno y corbata” which I thought was a good description.

Comment by Abby — August 23, 2011 @ 6:07 am

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Abby, isn’t that insane…imagine two people plus a kid! And lots of Chileans manage to do it. That amazes me. My suegra can feed so many people for so little money it’s actually mind blowing.

And you’re definitely right about the credit issue. It’s so easy to be approved for a Falabella credit card (unless you’re a foreigner) or something like that, and then buy everything in cuotas.

Comment by kyle — August 23, 2011 @ 12:20 pm

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Living in England, I have a very different view of ‘class’ than perhaps other nationalities have – as Margaret says, it’s not about income/money. In England, some of the poorest people (in terms of disposible income at least) are upper class. Many of the Aristocracy are incredibly poor, having to service those huge mansions and having little, if any, income. But they’re still Upper Class. And Working Class is essentially that – non-skilled labourers and manual workers who have little education, and work for a living. They may earn £150,000 a year as a plumber, but they’re still working class.
The middle classes are harder to define, because of social mobility – but as a stab, they are middle/upper management employees, or skilled professionals, they are well educated (perhaps private) and have probably attended university. Lower middle class and upper middle class can be quite different, and it’s seen as a bit of a slur to call anyone ‘middle class’ in some circles. “Working Class and Proud” is something you hear a LOT.
My dad and I had a discussion once when I said I was middle class (privately educated, university, home owner, IT professional) and he said I wasn’t because he was working class (his dad was a factory worker, he was a market trader selling fashion) and therefore I was born working class and can’t become anything else…
I find the whole area of class and status fascinating. I also agree that you can be rich on paper but actually not feel it – we also have little to no pension provision and a very old car, although the business is, on paper at least, providing us with a better than average income.

Comment by Eliza — August 23, 2011 @ 8:11 am

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I did notice that in England the class system seems very different than what I’m used to in the U.S. or even in Chile. In the U.S. there is a lot of upward social mobility, in Chile far less, and from the sounds of it, England is more similar to Chile in that, or even stronger grounded in it’s roots of little class mobility.

But I guess the actual term middle class isn’t so much what I meant, as to the actual income. I just meant more that certain people feel that they are earning a “normal” amount of income and living a “normal” life…when in reality they are far more financially wealthy than most. And they don’t realize that.

The discussion on feeling middle class and what you do or don’t call yourself is something I should probably write a whole new blog post on…these comments have been really interesting!

Comment by kyle — August 23, 2011 @ 12:23 pm

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Such a great post and some really thought-provoking comments. I didn’t know what Margaret says about class being more than just income, but I think it’s interesting.
I think that gringos have more discussions about this whole concept. I think that we want to feel like we’re middle class because many of us are used to that and feel uncomfortable thinking that we’re solidly in the top percentage of society, plus of course most of us know people in similar socioeconomic situations and therefore really do think that’s average. Whereas the Chileans I know who are in a similar situation to mine – Providencia, nice apartment but not a house, used car, go out to eat sometimes but still budget-conscious – don’t try to tell everyone that they’re so average. Maybe my experiences are circumstantial, but that’s what I’ve seen.
I have no idea how families live on so little. Food is SO expensive lately, so I’ve tried to buy less red meat, shop at ferias, etc, but the grocery bill is still so high, and I’ve been thinking a lot about people who have a lot less than we do and how they make it work.

Comment by Emily in Chile — August 23, 2011 @ 8:13 am

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That’s interesting Emily. I haven’t had as many discussions with Chileans about the subject at all. Most of the Chileans I know are actually much closer to earning a for real in the middle income. Though I will ask Lucho and some of Seba’s other friends who I’m sure are making in the top 20% and see what they consider themselves. I think Lucho knows he isn’t middle class, but he’s smarter than the average bear

And yes, it does seem like food prices have gone way up recently. I don’t even grocery shop that often and I noticed a big difference.

Comment by kyle — August 23, 2011 @ 12:25 pm

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OMG… I felt soooo dirt poor and financially insecure while living in Chile (how will I save money making this amount, how could we have kids making this amount, how will i pay off my loans making this amount?) and we had it soo good based on that graph!

Comment by Amanda — August 23, 2011 @ 12:08 pm

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It is crazy once you put it in perspective how good you have it! Though to be fair, most Chileans don’t have crazy high student loan payments like we do

Comment by kyle — August 23, 2011 @ 12:25 pm

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Thank you for your article Kyle.

It’s so similar to our lives here in BA. The prices are more than the upper west side of Manhattan now.

xoxo

Comment by Julie — August 23, 2011 @ 1:43 pm

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Yeah Buenos Aires might be even more extreme than Santiago…upper west side, YIKES.

Comment by kyle — August 24, 2011 @ 12:35 am

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These measures are always tough to generalize for many of the same reasons everyone has brought up here. I would say things like purchasing power, levels of household debt, and pension coverage would be interesting complementary stats to this. The one thing that concerns me here in Chile is not so much how much more one group makes than the other, it is movement between brackets. I would go out on a limb to suggest that it is probably tougher to move between tax brackets here in Chile than in the States, Europe, and probably many other larger Latin American economies due to ingrained cultural biases. Status as well all know is a biggie down here – last name, where your parents are from, are your hush puppies real leather? Opportunities more so than income inequality is the key in my opinion and I think the students striking know this as they probably cannot fathom taking on debt and then having to face a job market that already discriminates against you if you do not belong to a certain pre-defined group.

Comment by Peter — August 23, 2011 @ 2:02 pm

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Peter I think you are right that moving between tax brackets is pretty tough here, like you said, a lot due to status and biases that people have…but then also just due to not knowing the right people, not having the right connections. It’s that way all over the world, but I feel maybe even more so in Chile that if you don’t have someone to help you get a foot in the door, you’re screwed!

Comment by kyle — August 24, 2011 @ 12:37 am

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Yep, I feel like that doesn’t get addressed enough, but I believe it is so engrained those addressing it would not really know how to bring it forward without worrying about the expected backlash.

I feel bad for the students right now because in the end free education (although I know that’s not the goal of everyone striking) doesn’t equal increased access. That is just shifting subsidies around and would end up hurting those poorer individuals much more than helping them.

Comment by Peter — August 24, 2011 @ 12:22 pm

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I feel the same way about the students. It worries me that even if they do get free education (which doesn’t seem likely to happen) they are still not going to be upwardly mobile in this country because of so many other factors in play against them.

Comment by Kyle — August 24, 2011 @ 12:54 pm

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Interesting post Kyle. I think about class issues a lot here. I had some thoughts similar to Margaret, that class is somewhat tricky to define but that it isn’t limited to income. I don’t know what the exact sociological definition is but I reckon that it has something to do with getting beyond scraping by and being able to focus on more than just rent and food. Though 735 may be the median income, it would be hard to call that middle class, for me. I think part of the issue is that, regardless of what the median income is, Chile has an enormously large lower class, which isn’t even counting those who fall below the Chilean poverty line. I think the true middle class here is very small and the small filthy-rich class makes a filthy amount of money, ruining that median income number anyway.

Comment by Annje — August 23, 2011 @ 5:41 pm

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Hey Annje! Did you see my response to Margaret? I think that maybe wording this as a post about middle class wasn’t correct wording, because really I mean more that people who make an above average salary still consider themselves to be average earners when they’re really not.

Also, in regards to the poverty line, you reminded me that I forgot to mention this in the post, but meant to add that there are probably even more people under the poverty line but those people are had to track as a lot of the time they don’t have access to phones and internet.

Comment by kyle — August 24, 2011 @ 12:39 am

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Wow, every time I hear more and more about the class system in Chile, it reminds me of the class system here in the UK. People fool themselves into thinking a class system doesn’t exist anymore over here but that’s because they’re either Upper or Middle class and have never had any experience of working class people.

What I find interesting, though, is that whenever I read about the class system in Chile … or, in fact, anywhere in Latin America, it seems as though race and background also plays a big part in deciding which class people fall into.

Comment by Ceri — September 8, 2011 @ 2:13 am

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