By the Blouin News Business staff

Will Mexico’s middle class follow Brazil’s?

by in Americas.

A group of people protest against Mexican tycoon Carlos Slim, in Lima on May 3, 2013. Photo: Reuters.

A group of people protest against Mexican tycoon Carlos Slim, in Lima on May 3, 2013. Photo: Reuters

The global middle class continues to awake as a political force. In Latin America, Mexico is a likely candidate to challenge its ruling elite.

Mexico’s middle class hasn’t yet scaled to the extent of Brazil’s, but it is seen as more vulnerable to falling back down the social scale. A recent study published by Mexico’s statistics institute, INEGI, based on data from a survey on household income and spending, showed that the middle class in 2010 accounted for 39.2% of Mexico’s population, a 4 percentage points increase over the previous study done in 2000. Brazil’s middle class, by contrast, accounted for 52% of the country’s population in 2012, a 14 percentage points increase form 2002, according to numbers released by its government.

With 59.1% of Mexicans still belonging to the lower class by INEGI’s reckoning, falling back into poverty is a real risk for middle-class families. The majority of Mexican households today still suffer from some form of deprivation and remain highly vulnerable to shocks, says The Economist Intelligence Unit. They can claim to be the forgotten ones as the country’s economy expands and reforms are set in motion.

State and local corruption, a source of discontent for the emerging middle classs worldwide, is more deeply routed in Mexico than in Brazil, where it is largely seen confined to the police force. Brazil ranks 69th out of 176 countries evaluated by Transparency International for its most recent annual corruption perception index; Mexico scores far worse, being ranked 105th.

President Enrique Peña Nieto has embarked on structural reforms to loosen some of the de facto monopolies throughout the economy such as in telecommunications and oil and gas sector. Though it won’t yield results quite yet, the program is potentially a double flash point. It could be ignited by either the increasing breakdown of the historic links between government and private companies, or the impatience of the population for access to better consumer products and services, as well as to state-provided welfare services — the consumption of both private and public goods increasingly augmenting income as the mark of being middle class.

An early sign of discontent, and potential uprising, may be a social movement launched in Mexico a year ago ahead of last year’s July 1 presidential elections that Peña Nieto won. YoSoy132 was formed as a reaction by students to perceived political bias in the media and the need for truly democratic elections. It has subsequently led student protests in Mexico’s largest cities, all of which are seen to be approaching consumption and income levels that could make broader middle-class protests feasible.

YoSoy132 wants to become a broader national force and is distancing itself from all political parties. It might provide a kernel for Mexico’s middle class to take to the streets in protest against what they see as a distant ruling elite that is out of touch with their concerns, just as happened in Brazil. Mexico should look South to realize that a globally admired economy isn’t enough to appease its population.