More than half or 52.6% of Latvia’s residents consider themselves middle class, according to Swedbank Institute of Finances’ study of the middle class in Latvia.
While presenting the study, Evija Kropa, head of SwedbankInstitute of Finances, said that the middle class was a social group that not only made significant contribution to Latvia’s budget and economic growth. The middle class also reduces social inequality. However, there are no definitive criteria in the world as to which persons belong to the middle class. Most often the main criterion is the person’s income level, but it is no less important what people can achieve with the money they have. The circumstances, wealth, incomes and consumption are also important criteria, she said.
According to Swedbank survey, 52.6% of Latvia’s residents consider their households middle class. 39.4% said that their households were below middle class, 3.4% said that their households were wealthier than middle class families, while 4.6% had no opinion.
People up to 45 years old, people with higher education and high to medium incomes mostly consider themselves middle class. Most of those who consider themselves below middle class are residents older than 45, residents with low incomes and residents with primary education.
On the other hand, 59.6% of respondents believe that no more than 30% of society are middle class.
Most respondents said that a household may be considered middle class if monthly income per family member was at least EUR 810 after tax. And wealthy families are those where monthly income per family member is over EUR 2,600 after tax.
The main criteria characteristic of a middle class family include owning a home or property – 73.1% of respondents said so, 54.3% named traveling abroad for at least seven days each year, 53.8% said middle class families had no problems with their monthly loan payments and other obligations, and 44.2% said they had access to private healthcare services.
In reality, however, only 10% of respondents meet all of the above criteria. 67.2% of households that consider themselves middle class actually own a home or property, only 35.4% can make their monthly loan payments without a problem, and 26.5% have access to private healthcare.
Swedbank economist Linda Vildava added that income inequality in Latvia had decreased from 2005 to 2016, although income inequality still remains a problem in Latvia.
The survey was carried this past August, interviewing 1,015 residents at their homes.