I’m noticing this odd phenomenon about social classes here in Chile. There is a weird obsession over them that reaches every corner of this country. Further, there seems to be a constant need to identify which class people fall into.
…or maybe it’s because I’m studying Marketing and for all types of reasons, marketers need to segment the population at large…Ok, I won’t discard that this might be the reason why figuring out where people are “located” in the social class hierarchy seems to be a national past time for those who immediately surround me.
There are several factors that determine what socioeconomic class people fall under here in Chile and one of those factors in Santiago is the “comuna” or neighborhood you live in. Note the map below for a quick glimpse of the comunas that make up Santiago:
I first became aware of this chasm between classes when I visited some cousins in Chile for a three-month period back in 1998. My cousins, aunt and uncle live in a three bedroom house in Puente Alto. I didn’t personally see anything “different” about them or how they lived since they had all the things I had at home … in fact, I’d argue that they lived far better than we did back then because they certainly always had a good amount of food readily available for a quick asado (bbq). They had cars, tvs, phones, mircowaves, fridges, etc, etc. It wasn’t until THEY said to me “Vamos a ir al barrio alto” that I even had a notion that a “higher neighborhood” (as in upper class neighborhood) even existed in such a manner that it had it’s own nickname. See, to them, going past the Ñuñoa neighborhood is like venturing into a completely different country. Anything from the Providencia neighborhood and on, is mostly foreign to them. In fact, a couple of weeks after the earthquake, another cousin of mine who happens to live beyond Providencia, mentioned that she had gone to the mall, Parque Arauco, for a one-time job and she was FLOORED that people were shopping and eating out. She literally said “It’s like another world up there.” Up there being the Las Condes neighborhood.
Aside from neighborhoods, another factor in determining what class you fall into are what the Census calls “Good” (or “Bienes.”) Does the family or household have a tv, a land line, a refrigerator, a car, a microwave, a shower (yes, you read that correctly. They want to know if you have a shower)? There are about 10-15 items that are considered to be basic and depending on whether a family has them or not, helps determine where in the social class spectrum they will ultimately fall. The higher class will obviously have 100% of all items, in multiple quantities, whereas a lower class household may have certain things, but definitely not 100% of them.
Finally, another important factor that helps determine where a household falls is the level of education reached by the head (or heads) of household. Those in the upper sections of the spectrum will have totaled an average of AT LEAST 16.2 years of schooling and most have certainly graduated college and further, hold a Graduate degree from a known institution.
So then, how are classes “classified?” Not in the typical fashion we hear about in the U.S. – Upper Class, Upper Middle Class, Middle Class, Lower Middle Class, Upper Lower Class, etc, etc until you get to the standard Lower Class title. In Chile, each class has a letter or series of letters assigned to them as follows:
ABC1: These are college graduates who hold executive level jobs or otherwise “prestigious” jobs. Likewise, these individuals hold powerful positions within their companies and they live in the best and most exclusive neighborhoods of Santiago. Their monthly income is calculated at about $3.5 million pesos (about USD$7000) a month or more. These individuals make up about 10% of Santiago’s population. They own two or more cars, all or most luxury makes and models, and the cars are less than 5 years old. Usually the “AB” segement is grouped together with the C1 segment because the AB alone would only make up about 2.5% of the population (incidentally, this segment alone would be quite difficult to analyze since they are the ones who will have most of their “goods” completely guarded and all info on them would be heavily shrouded.)
C2: This is considered to be the “most typical” middle class of the city and make up less than 20% of the population of Santiago. They tend to live in more traditional neighborhoods of the city, sometimes further away from the downtown areas and with clean, well maintained homes,streets and sidewalks. The heads of households are generally also college graduates with executive-type jobs or are heads of departments in their companies. Their income is an average $1 million pesos a month (about US#2,000) and they own at least one car (sometimes two). Unfortunately in this group, savings is not a reality for the most part.
C3: Middle class noted mainly for its simplicity. This group tends to live amongst the C1 group and the D group, typically found in the more traditional, sometimes older neighborhoods of Santiago. Socially speaking an interesting point about this group is that in their neighborhoods, one can note an elevated level of domestic activity on the streets (i.e. housewives sweeping, children playing, etc). This group is said to make up 25% of the population of Santiago. The average household income is $600 thousand pesos (about US$1,200) and they tend to not have cars but might instead own very old, handed down trucks. Only 10% of this group has a land line in their homes.
D: This is the lower class group that makes up approximately a reported 35% of the population of Santiago. They have an average monthly income of $300 thousand pesos (about US$600) and they tend to live in smaller, older, mainly deteriorated homes. It’s reported that these households rely on only one revenue earning member. That being said, because there are so many individuals who fall in this category, they are notable for business purposes as they are a force as consumers due to amount of people in this group. Those in this group tend to not have steady jobs but rather will work seasonal or non-contractual jobs (i.e. parking lot attendants). They live in very populated ares of the city, generally on streets that don’t necessarily contain pavement.
E: This group is considered to be at almost poverty, if not poverty, level and they make up 10% of the population in Santiago. Their average household income is $90 thousand pesos (about US$180) and this income is either very sporadic income or money granted to them by the government. This group cannot afford to cover the most basic of necessities and generally rely on third party assistance (i.e. the government in many cases). Due to their lack of purchasing power, unfortunately they are rarely regarded in consumer studies.
Why did I feel the need to write about this? First of all, on a selfish note, I really needed to understand how consumers are segmented in Chile. For obvious reasons, businesses and companies in general, focus on the ABC1 and C2 groups mostly because of their purchasing power. After all, these are the people who have the money to spend on goods and services. Logical of course.
I also wanted to understand, in depth, how one group differs from another because Chile really is a segmented culture. In fact, this study I explored done by AIM (Chilean Association of Market Studies) in 2008 contains 38 pages of information. Information that is so detailed, it even tells you how each group DECORATES THEIR HOMES!! Crazy.
I think that Chileans segment themselves and they do this because this is how it’s been all their lives. This is certainly not known as the “land of opportunity” and I wonder how many D class individuals ever make it to the sphere of ABC1 or even C2! Is that even possible here? I take a look at my own family members (ones I wouldn’t even dare classify!) and wonder why they never go out in other areas of the city, why they don’t have friends who live in other areas and why they only move around in their neighborhoods. The same goes for those who live in Las Condes and beyond – do they ever go to Puente Alto to have a beer or a quick bite to eat? My guess is no.
It’s interesting how my graduate studies have made me look at people and wonder how their socioeconomic class, as dictated by Chile and themselves personally, makes them tick and motivates them one way or another.
Is it possible to make leaps and bounds in such a segmented culture (and city)? Discuss.
Sources: AIM Chile, Novomerc Study, CERC.