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 jobs that we all have in common after the age of 16 is that of be a voter; which is like a very minimal expression of being a citizen. And since this is an odd year, we will have elections. And with them the campaigns, the options, the storm on social networks and, among all this, the misinformation: a cause for divorce from Argentinianness, and the basis for confusion in the solemn act of depositing a piece of paper in the ballot box. It is not what is called madness, but neither can the opposite be said: undoubtedly the misinformation affects our opinions, and with it our ability to vote.
El report The report we are delivering in this edition is somewhat atypical for several reasons. First, because it deals with a topic of utmost importance for our region in the middle of January, that is, when practically no one is willing to read about topics of utmost importance. Second, because the trigger for the report was a tweet that we wanted to corroborate. And third, because it is required of the reader: data is nothing without an interpretation, and the Observatory's is just one more. Unfortunately, most of us are Usain Bolt when we are pursued by complexity.
To put it in a nutshell, in this edition we deal with the income distribution in the Rosario area. The report accompanying this note not only compares different income levels between families, but also shows other types of characteristics that serve to explain how families could overcome their current situation (or not), with a certain independence from the income level. We refer to the level of education, access to health, and a whole set of indicators that provide a more global vision of the development possibilities of the area and, in particular, of the progress of families.
The Tweet
As a personal assessment, at the beginning of December 2016, a strange climate was observed: for almost two weeks, practically the only economic discussion that was heard in the media was that of the reform of the income tax or its possible repeal. To give a typical example, as shown in the graph, during that period the exchange rate against the dollar registered an upward trend, which was hardly commented on.
Within the discussion on income tax, there was a tweet of the current president of the BCRA, which was one of the triggers for this report. It showed the impact of tax pressure by type of tax, and by income decile. Basically, it revealed that the discussion about the income tax was one that impacted the three highest income deciles; contrary to the inflationary tax, which strongly impacts the three lowest income deciles, in contrast to the rest of the population.
In addition to the tax discussion, another aspect that caught our attention was that the income ceiling Of the entire sample, it was strikingly low: the highest gross salary in Argentina for a formal worker was around $86.000.
Of course, the information is of a sample nature, therefore, it contemplates a statistical error and, even so, there may be cases of under-declaration of income. However, it still seemed low to us. And we could check that data, using the database provided by the Permanent Household SurveyWe got to work and prepared the report.
Contrasts: Per Capita Family Income in the AGR
Although the report provides a more complete and detailed analysis, the infographic below shows some of the most notable aspects in the population-income relationship, within the classification carried out for the Greater Rosario Agglomeration.
As can be seen, the lowest-income families are also the largest families. For example: 33.79% of children under 10 years of age in Greater Rosario live in the 10% of households with the lowest income. This point is not a minor issue. It is commonly stated that Argentina could take advantage of the benefits of the so-called demographic bonus: a phenomenon that occurs within the process of demographic transition in which the working-age population is greater than the dependent population (children and older adults) and, therefore, the productive potential of the economy is greater.
If the academic performance of students is largely explained by the educational level achieved by their parents, if this trend is not broken, the new generations that are concentrated in lower-income families will have less chances of social ascent; 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 of this article, a certain concept of realityThe problem is that there is no such thing. Or if there were, we would hardly be sure when we stumbled upon it. If we had access to a single, defined reality, the truth would be associated with it. All problems would have a solution, and the effort would simply lie in reaching them by that path.
The best thing about it economic science The only way to do this is to offer methods, consider the evidence, and then formulate an interpretation. But as simple as it may seem, it is a really thorny problem: can we claim not to have made a judgment before considering the evidence? As a well-known fictional character, who has come back into fashion, says: “It is a capital mistake to theorize before one has data. Without realizing it, one begins to distort the facts to make them fit the theories, instead of fitting the theories to the facts.” But of course, unlike us, Sherlock Holmes is a fictional character.
One of the ways we have as a society to contribute to the partial solution of this problem is to generate consensus. In one aspect, the public statistics They are a form of consensus among 40 million people (or more). A kind of contract to believe or burst, if there are no transparent institutions. If everyone believes, the interpretations play within certain limits. If a large majority does not believe, the meanings overflow.
The report that accompanies this article shows that in the area we are facing a problem of income distribution, but also of human capital, which is one of the bases of the country's development, facing the 21st century. So, if society does not even share the meaning of words, how can it find common ground for argument and reason? The path to emotionality is fertile: from that ground judgments, prejudices, opinions and votes will flourish. Ignoring the problem is an option, but it is hardly desirable.