Measuring the middle class

The middle class is something often talked about, but seldom measured. Recently, government planners have been talking not only about reducing poverty but also about increasing the middle class. I suppose they mainly intend for some formerly poor families to be promoted to the status of middle class (henceforth abbreviated MC).

I doubt if they are planning for any from the upper class (henceforth abbreviated UC), to which the political leadership belongs, to be demoted to the MC. I know many people who wouldn’t mind or would even prefer that. Perhaps the planners hope to keep the present members of the UC unchanged, and to let other new MC members come from the sheer population growth of MC families themselves.

Whatever one’s intentions or expectations, a social science analysis of Philippine progress entails statistical measurement of social classes. Today’s piece is my own summary of the state of the measurements.

The ABCDE system: social classes used in market research. This is the oldest system of classification, devised by private research companies for the use of their clients, mainly from business. It is essentially a classification of dwellings made by survey interviewers in the field, based on simple guidelines, including photographs for each class. The guidelines are essentially “house rules.” Here are the Social Weather Stations (SWS) guidelines, as inherited from our former fieldwork provider.

Class AB. These are UC homes in exclusive subdivisions; standouts in a mixed neighborhood. Permanent structures, impressively spacious. No need for repairs. High-quality materials, well-painted, with lawns or gardens.

Class C. In non-exclusive subdivisions, mixed neighborhoods. Single-detached, duplex, or apartment. Concrete or semi-concrete, combined heavy and light materials. Requiring only minor repairs. With a one-car garage.

Class D. In general neighborhoods. Low-rate apartments. Small. Concrete but unpainted. Made of light or native materials or inexpensive wood. Requiring major repairs.

Class E. In slum areas. Small or temporary structures or ”barong-barongs.” Very light, sometimes scrap materials. Requiring major repairs.

Put together, Classes A, B, and C were only 5.8 percent of the SWS national sample of 1,500 households in September 2024. Class D was a massive 87.4 percent and Class E was 6.8 percent, but the distribution fluctuates greatly from sample to sample. (I personally prefer education class over dwelling class in reporting SWS findings.)

Social classes are defined by government institutions. In 2012, the National Statistics Office, now the Philippine Statistics Authority (PSA), the Marketing and Opinion Research Society of the Philippines (MORES), and the University of the Philippines School of Statistics created a new socioeconomic classification system (1SEC for short), which attempted to standardize practices, but which has not been adopted because it is too complicated.

The 1SEC created nine different social classes, requiring 36 input variables to compute. The source of the inputs is the Family Income and Expenditures Survey, which was triennial up to 2021, and then became biannual. The MORES members have ignored 1SEC and continued with their traditional ABCDE. The PSA itself does not implement 1SEC.

At the Philippine Institute for Development Studies (PIDS), senior research fellow Jose Ramon G. Albert has defined MC as those families with income per person that ranges between two times and 12 times the official poverty line (PL). Those with two to four times PL, he calls “lower-middle,” those with four to seven times PL are “middle-middle,” and those with seven to 12 times PL are “upper-middle.” By his measure, the MC proportion of Filipinos rose between 1991 and 2021, but then fell by 2023 to 40 percent.

Self-reported social class. The 44-member International Social Survey Program (ISSP) periodically includes social inequality as a topic, most recently in 2019, when it asked for the respondents to self-identify themselves into: 1. lower class, 2. working class, 3. lower middle class, 4. middle class, 5. upper middle class, or 6. upper class. Thus, classes 3, 4, and 5 constitute the MC. (The words “working class” for Class 2 are out of place to me, but this was a collective decision of the ISSP members, that SWS could not alter.)

By this scheme, in the 22 countries that implemented the module, the average was 20 percent in Class 3, 33 percent in Class 4 and 7 percent in Class 5, or a total MC of 60 percent. The average in Class 1 plus Class 2 was 35 percent, and 1 percent in Class C.

For the Philippines in particular (done by SWS), the corresponding percentages were 28, 21 and 3 respectively, or an MC total of 52. The Philippine lower class plus its working class had 48 percent and its upper class had 0.4 percent.

I think SWS could improve on the ISSP question by building on its standard self-rated poverty item, and then asking the not poor to classify themselves as middle class or upper class. (I wonder how many would consider themselves in between MC and UC, just by seeing a line there.)

Merry Christmas to all!

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Contact: mahar.mangahas@sws.org.ph.