Mexico's Growing Middle Class is Good News for U.S.

A growing middle class in Mexico is good news for the U.S.

June 14, 2013— -- A new study on Mexico helps to explain the recent fall in Mexican immigration to the U.S. It suggests that Mexico is slowly becoming a "middle class country."

The study by Mexico's National Statistics and Geography Institute [INEGI] says that 42 percent of Mexican homes qualify as "middle class" while 39 percent of the country's overall population falls into this social category. It also points out that at the turn of the century the middle class was only somewhat smaller, as it made up 38 percent of Mexico's homes and 35 percent of the country's inhabitants.

So yes, the growth in the Mexican middle class is miniscule compared to what is going on in China, where the middle class grew sixfold over the past ten years. But growth in Mexico's middle class is still large enough to discourage some illegal immigration to the United States, as a recent Washington Post article suggests.

It is also good news for American companies that are looking for new markets for their consumer goods. Most importantly, middle class people are also less likely than "lower class" people to fall into poverty if they lose their job or if an income provider in their family dies. INEGI says that middle class people generally have intangible assets like a college education, or physical assets like a home, which protect them to some extent from economic shocks.

The INEGI study was based on a survey of more than 30,000 homes, which was conducted in 2010.The agency said that in order to determine which social class people in Mexico belonged to, it analyzed 17 variables that included how much people spent on food, whether they had credit cards, how much they spent on internet access and how many rooms each household had.

This analysis is not alone in pointing out a social uptick for Mexico. There are several other indicators that suggest that over the past thirty years, Mexicans have increasingly acquired a middle class "lifestyle." Check out the data below. It was compiled by economists Luis de la Calle, and Luis Rubio in graph form for a book they published last year called "Mexico, A Middle Class Society."

The spike in movie showings across Mexico is a sign that people have more money to spend on entertainment

Mexicans also traveled much more by plane in 2008 than in 1989, another sign of the emergence of a middle class "lifestyle."

More Mexicans are also going to college. The number of people enrolled in higher education in the 2009 academic year was three times greater than those enrolled in 1980.

Meanwhile, poverty rates are decreasing in Mexico. This graph shows how the percentage of Mexicans who can't afford food, education or household goods has decreased greatly since 1950, although poverty still exists in large percentages.