How much does a household in Greater Rosario earn compared to the rest of the country, and what does income distribution in Rosario reveal about families, children, and education, using data from the EPH (Permanent Household Survey). January 2017 report.
Do you have any idea how much you earn compared to the rest of the population of Rosario? Do you consider yourself part of the middle class? On the other hand, what does it mean to be middle class? There are those who define madness with a metaphor: it occurs when someone replaces reality with the map.
In the case of economists, this occurs when they profoundly confuse the functioning of their model with the functioning of the economy. In the case of ideologues, it occurs when they confuse information with rhetoric; and we assume that something similar happens with the rest of the professions.
But one of the roles we all share after the age of 16 is that of being a voter . It's a very basic expression of being a citizen. And since this is an odd-numbered year, we'll have elections. And with them come the campaigns, the options, the social media storm, and, amidst all of this, misinformation. This is a cause of disconnection from Argentinian identity and a source of confusion in the solemn act of depositing a slip of paper in the ballot box. It's not exactly madness, but neither can we deny it: undoubtedly, misinformation affects our opinions, and therefore our ability to vote.
An atypical report
The report we're publishing in this edition is somewhat atypical for several reasons. First, because it addresses a crucial issue for our region in the middle of January, when practically no one is inclined to read about such important matters. Second, because the report was prompted by a tweet we wanted to verify. And third, because it demands something of the reader: data is nothing without interpretation, and the Observatory's interpretation is just one among many. Unfortunately, most of us are like Usain Bolt when faced with complexity.
To put it simply, this edition focuses on income distribution in the Rosario area. The accompanying report not only compares different income levels among families but also presents other characteristics. These help explain how families might (or might not) overcome their current situation, somewhat independently of their income level. We're referring to education levels, access to healthcare, and a whole range of indicators that provide a more comprehensive view of the area's development potential and, in particular, the progress of families.
The Tweet
As a personal observation, the atmosphere in early December 2016 was strange: for almost two weeks, practically the only economic discussion heard in the media was about reforming or potentially repealing the income tax . To give a typical example, as shown in the graph, the exchange rate against the dollar showed an upward trend during that period, which went virtually unnoticed.
Amid the debate surrounding the income tax, a tweet from the current president of the Central Bank of Argentina (BCRA) served as one of the triggers for this report. The tweet illustrated the impact of the tax burden by tax type and income decile. Essentially, it revealed that the income tax debate disproportionately affected the three highest income deciles. Conversely, the inflationary tax significantly impacted the three lowest income deciles, in contrast to the rest of the population.
Besides the tax discussion, another aspect that caught our attention was that the income ceiling of the entire sample was strikingly low: the highest gross salary in Argentina for a formal worker was around $86.000.
Of course, the information is based on a sample; therefore, it includes a statistical margin of error, and even then, there may be cases of underreporting of income. However, it still seemed low to us. And we could verify that figure using the database provided by the Permanent Household Survey . We got to work and prepared the report.
Contrasts: Per Capita Family Income in the AGR
While the report provides a more complete and detailed analysis, the infographic below shows some of the highlights of the population-income relationship within the classification made for the Greater Rosario Metropolitan Area.
Algunos datos de la distribución del ingreso por deciles de hogares en el Gran Rosario.As can be seen, the lowest-income families are also the largest. For example, 33,79% of children under 10 in Greater Rosario live in families belonging to the 10% of households with the lowest incomes. This is a significant point. It is commonly argued that Argentina could take advantage of the so-called demographic dividend : a phenomenon that occurs within the demographic transition process in which the working-age population is larger than the dependent population (children and the elderly), and therefore, the economy's productive potential is greater.
If students' academic performance is largely explained by the educational level attained by their parents, if this trend is not broken, the new generations concentrated in lower-income families will have fewer opportunities for social advancement ; especially in a global context of technological change, where routine jobs are being progressively replaced by some type of automation.
A more detailed analysis, incorporating a greater number of variables, can be found in the report.
The underlying problem, and closure
In the introduction to this article, a certain concept of reality was mentioned . The problem is that no such thing exists. Or if it did, we would hardly be certain when we encountered it. If we had access to a single, defined reality, truth would be associated with it. All problems would have a solution, and the effort would simply lie in reaching them by that means.
The best thing economic science can offer is methods, consideration of the evidence, and then an interpretation. But as simple as it seems, it's a frankly thorny problem: can we claim that we haven't made a judgment before considering the evidence? As a well-known fictional character, currently back in fashion, says: “It is a capital mistake to theorize before one has data. Without realizing it, one begins to distort the facts to fit the theories, instead of fitting the theories to the facts.” But of course, unlike us, Sherlock Holmes is a fictional character.
Public statistics and consensus
One way we as a society can contribute to a partial solution to this problem is by building consensus. In one respect, public statistics represent a form of consensus among 40 million people (or more). They're a kind of take-it-or-leave-it agreement, if transparent institutions aren't in place. If everyone believes, interpretations remain within certain limits. If a large majority doesn't believe, the meanings spiral out of control.
The report accompanying this article shows that the region faces a problem of income distribution, but also of human capital, which is one of the foundations of the country's development in the 21st century. So, if society doesn't even share the meaning of words, how can we find common ground for argumentation and reason? The path to emotionality is fertile: from that soil will spring judgments, prejudices, opinions, and votes. Ignoring the problem is an option, but hardly a desirable one.
Open access, for use and citation
The report is available freely and without charge, under a Creative Commons license (CC BY-NC-SA 4.0):
- 📄 Full report (PDF): Download the report
- 🗄️ UNR Hypermedia Repository (RepHip): https://hdl.handle.net/2133/17515
- 📚 More reports from the Observatory: Index of Reports
¿Cuánto gana mi vecino? Contrastes en Rosario. Informes del Observatorio UNR N.º 35 — Serie Informes de Coyuntura N.º 12, enero de 2017. ISSN 2683-9067 / 2683-9075. Autores: Germán A. Tessmer y Norberto Martín.