These segments, into which the population is divided, are vital for decision-making in order to generate wealth and reduce poverty.
Mariana Salazar was asked to carry out a class consciousness exercise. They asked him what social class he belongs to: high, middle or low. Without hesitation, he replied: “Come down. The money is not enough to pay my debts ”.
However, Mariana works in a shipping company and earns $ 550 per month, that is, $ 18.33 per day. When she was told that with that income level she is considered middle class by both the National Institute of Statistics and Censuses (INEC) and the World Bank, she was astonished: “I have never considered myself middle class.”
The parameters for defining social classes in a country may vary depending on the methodology applied. However, there are general aspects and certain characteristics, stipulated by entities such as the United Nations, which are repeated.
These segments into which the population is divided are vital for decision-making in order to generate wealth and reduce poverty. Citizens must know what class they occupy in order to demand an improvement in their living conditions. THE UNIVERSE details it.
Who is considered the lower class (poor and extreme poor) in Ecuador?
According to the INEC, with cut-off to June 2021, a person is considered poor if they have a per capita family income of less than $ 84.71 per month, which is equivalent to $ 2.82 per day. And a person is in a condition of extreme poverty when he receives less than $ 47.37 per month, which is equal to $ 1.60 per day.
Per capita income is calculated by adding all the income of a household and dividing the total by the number of people in it. In Ecuador there are, on average, 1.6 income earners in each household.
Jorge Soliz lives in the Las Delicias sector, in the northwest of Guayaquil. Take care of cars and earn $ 80 a month; it is the only income your family has. He falls into the category of poor and belongs to the 32.2% of the population of Ecuador that is located in that social class. Meanwhile, the extreme poor are 14.7% of the population.
In urban areas, poverty reached 24.2% and extreme poverty 8.4%. Finally, in rural areas poverty reached 49.2% and extreme poverty 28.0%. That is to say, about 5.7 million people are living in poverty. And of this total, about 2.6 million live in extreme poverty.
The poverty rate increased dramatically compared to 2019 (25%), a prepandemic year. Due to the lack of resources, the consumption of the poor and extreme poor class is low compared to the average or high, says analyst Jorge Calderón. The increase or decrease of this social class shows the success or failure of the governments’ economic measures, he adds.
Who is considered middle class in Ecuador?
It is a class that demands and consumes products. It is considered “key and vital” for the country’s economy. When this portion is affected economically, it has a direct impact on the decrease in trade, says Héctor Delgado, an economic analyst.
“And if trade decreases, well, many indicators are affected, such as job creation, tax collection, business confidence. That is why the middle class is extremely important, ”he says.
The middle class has per capita incomes of between $ 13 and $ 70 per day. According to the World Bank, the Ecuadorian middle class fell from 33.3% to 30.4% in 2021. This is also an effect of the pandemic and the economic crisis that the country had been facing.
“This social class invigorates the economy, and that is why tax, economic, and labor measures can affect it. By increasing taxes, for example, they are left with less income to consume, ”says Calderón.
For the specialist, it is vital that the governments give sufficient incentives to the people of the lower class so that they can rise to the average: “Generate work, reduce taxes, boost consumption, improve the environment to generate wealth.”
-Vulnerable population-
A category called “vulnerable population” also appears in international indicators. It is made up of people whose per capita income ranges between $ 5.50 and $ 12.99 per day, according to the World Bank. That is, they cannot be considered poor or extreme poor. Some organizations define this segment as “lower middle class”.
At least 344,833 new suitable jobs were created between October 2020 and October 2021, according to INEC data
This parameter is not measured by the INEC. Despite this, the World Bank assures that this segment of the population has already surpassed the middle class in Latin America. The vulnerable population grew to 38.5%, while the middle class fell to 37.3% of the population in the entire region.
Who is considered upper class in Ecuador?
The richest quintile in the country has an average per capita income of $ 637. For every dollar that the families of the poorest quintile generate, those of the upper class receive $ 12.50. They have great facility to save and invest in new and better productive means, says Calderón. They are about 2% of the population.
“They are the owners of the factors of production, companies, industries. They have the ability to invest in the economy and to hire people from the lower and middle classes, ”he says.
Although this class is affected by the rise in taxes, the blow is not as great as the middle class, says Delgado: “They have the ability to afford luxury and buy abroad.” (I)
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