- March 26, 2013
Poor Lithuanian middle class
Prime minister Algirdas Butkeviciussaid in his recent speech given on the occasion of 100 days of government announced that building a prosperous country will be the main goal of his tenure.
Sociologists and economists are both in agreement that the basis of such a country is so-called middle class. In the meantime, the country debates not only about how strong of a position middle class takes up in the society but most of all whether middle class actually exists in Lithuania.
„It does.”, claims sociologist dr Vladas Gaidys.
In his opinion, disregarding the division of middle class into upper, middle and lower, Lithuanian middle class essentialy consists of qualified specialists who not only earn enough for a living and for paying their bills but also can afford an annual vacation as well as their children education and culture related expenses. What is more, the sociologist emphasises that Lithuanian middle class can be characterized by both material and psychological criteria. Thus, sociologist counts office clerks, educators, scientists, cultural workers and medical workers among middle class. „Therefore we have middle class, for sure.” claims dr Gaidys. However he points out, that sometimes that middle class is very poor.
How poor? – journalists working for a business magazine „Verslo zinios” wrote a report based on statistical data where they tried to estimate the size of the middle class. According to the magazine, each household that can afford to pay their heating bills, to go each year for a vacation and to eat balanced meals every day should be counted among middle class. Therefore, the magazine estimates that there are less than 200 000 hauseholds in Lithuania that can be qualified as middle class. They constitute about 22 % of all hauseholds. During the time of economic crisis over 30 % of hauseholds lost their place in middle class.
However, many experts quite critically look at the estimates of the magazie and the criteria used to verify who belongs to middle class. According to the critics, the criteria that were used can better determine when the social exlusion starts; other critics say that they even mark the poverty line.
The poverty threshold in Lithuania is below 691 lt of income per month for a single person and below 1 452 lt for a four person family (with two kids). According to the data gathered by the Department of Statistics last year, approximately 20 % of the society, that is 660 000 people, lived below the poverty line in Lithuania.
Meanwhile – also according to the Department of Statistics data – a little bit over 30 % of the society lived last year very close to the poverty threshold. Considering that only a small percentage of the society belongs to the group of wealthy citizens, we can conclude that about 45 % of the society can be qualified as the Lithuanian middle class.
The national bank „Lietuvos bankas” uses quite another set of criteria altogether. According to these criteria, a hausehold belongs to middle class if its monthly income is over 4 000 lt. Violeta Klyviene, a financial analyst, says that only such hauseholds are resistant to crisis situations and can be seen as a base of Lithuanian middle class.
In the future, the middle class will get bigger and bigger and until 2030 the number of people belonging to middle class should double, predicts the report of the Organisation for Economic Co-operation and Development (OECD). The report estimates that 5 billions of people in the world will identify themselves as middle class, if the world population reaches 8 billions. Currently, there are 7 billions people in the world and only 2 billions of them qualify as middle class. Only people who earn from 10 to 100 dollars a day can be indentified as middle class, as per OECD criteria.
OECD raport is a good news to prime minister Algirdasa Butkeviciusa who plans on building a prosperous country. There is also a bad news, though. According to the report entitled „Crisis, inegality and poverty”, middle class can disapear in Europe. It is clearly visible in impoverished societies that deal with crisis, for instance in Spain or Greece.
The report says that only two classes will remain in societies – the poor and the rich. The latter will earn on average fifteen times more than the former. The authors of the report warn that if the current policy of cutbacks when it comes to social and public issues and tax policy don’t change, the middle class may disapear in the next 10 years.
Tłumaczenie Justyna Kaczmarek w ramach praktyk w Europejskiej Fundacji Praw Człowieka, www.efhr.eu. Translated by Justyna Kaczmarek within the framework of a traineeship programme of the European Foundation of Human Rights, www.efhr.eu.