Middle-class Portugal “living way beyond its means”, says OECD
One in five middle-class families is spending more than it earns.
This is the gist of reports today on the latest OECD (Organisation for Economic Cooperation and Development) report on “the squeezed Middle Class” throughout the world.
Portugal is one of the many countries that emerged from the study as ‘the norm’: one with a Middle Class looking “like a boat in choppy waters”.
In Portugal’s case, the boat may be slightly smaller and less seaworthy.
Say media reports: “69% of Portuguese middle class families are financially vulnerable and admit to having difficulties getting to the end of the month (meaning salaries don’t last long enough)”.
The only countries where families apparently feel more squeezed are Chile and Greece.
In other words, Portugal is pretty much at the top of the table of misery.
Least stressed when it comes to cost of living versus available salaries are Lithuania and Estonia.
But what does this all mean? According to State news agency Lusa, it means we’re once again at the point where families’ debt levels are unsustainable.
Add to this the fact that house prices have “increased three times more rapidly than family budgets” and much of the country is rolling very unprotected on those choppy waters.
National statistic Institute INE warns that families are only able to save an average of €4.60 per €100 of income.
But the wider scenario is what’s perhaps most alarming: the fact that young people are finding it harder and harder to “reach the middle class”.
ECO online has broken down the OECD numbers in terms of Portugal, saying the families over their heads in debt come to 36% of the so-called middle class, and this suggests that in Portugal’s case, one in three middle class families is spending more than they earn (that’s two more than the OECD average).
However the report is interpreted, it doesn’t make for uplifting reading anywhere.
One of the grimmer statements, coming from ECO online, is that Portugal is among the countries within the study where less citizens even identify as belonging to the middle class.
Inequality – a constant criticism of ‘the way things are’ in Portugal – is also cited by the OECD report that found that “families with the highest incomes and older people get the largest portion of social security benefits”.
For now, says ECO, Portugal is seen as a country with 61% of its population classified as middle class, 16.8% as lower class, 12.4% ‘poor’ and 10.6% ‘upper’ class.