A little over half of Lithuanians consider themselves “middle class”, according to a new survey. The figure is down from the previous poll two years ago. To be comfortably-off, Lithuanians would like their incomes to be considerably higher.
In the survey commissioned by Swedbank, 55% of the respondents classified themselves as middle class (over 60% two years ago).
According to Swedbank, people earning between EUR 983 and EUR 2,621 before tax could be considered middle class in Lithuania.
“This is a group of people who have enough income to take care of their relatives and family, and have enough left over for savings, investments, holidays or other purchases,” said Jurate Cvilikiene, head of the Institute of Finance at Swedbank, while presenting the survey.
Russia’s war in Ukraine is significantly changing people’s expectations, she notes, with many expecting that their incomes may decrease.
Most people gave their income a score of 7 out of 10.
According to the survey, over 50% of respondents have enough money to meet their basic needs, but would have to save money to buy more expensive items.
The number of respondents who consider themselves upper-middle class has risen from 9% to 11% in two years.
More than one in four, 26%, classified themselves as lower middle class. They said their income was barely enough to survive.
“We see a large group of people, in this case 26%, who say that they make enough money just for basic needs: food, taxes. In fact, this anxiety is palpable,” Cvilikiene said.
In order to lead a dignified life, Lithuanians would like to receive on average 56% more income.
“There is still an expectation of income growth,” noted Cvilikiene.
According to Swedbank economist Nerijus Maciulis, the OECD definition of “middle class” is people making between 75% and 200% of a country’s median income. In Lithuania, that would mean monthly earnings between EUR 983 and EUR 2,621, before tax. That would essentially mean anyone making slightly above the minimum wage, 730 euros.
“In a decade, the middle class has grown from 50% to 61%, and just last year, 61.3% of the working population could be classified as middle class, a record-high proportion. It has grown at the expense of a reduction in the number of people in poverty. Those earning even slightly above the minimum income, according to the OECD, can be classified as middle class,” said Maciulis.
However, this does not mean that such incomes guarantee adequate standards of living, he concedes.
“There are still differences between the opportunities of the middle class in the richest EU countries and in Lithuania, but the gap is narrowing,” Maciulis said.
Looking only at income is too narrow, however. Someone in the middle class should also have wealth and maintain certain lifestyles, Maciulis added.
“Over the last few years, we have seen a rapid increase in the financial assets of the population, with deposits growing by a third and a several-fold increase in the number of people investing in securities. On the other hand, wealth inequality remains high – as many as 54% of the population do not have savings of more than 1,000 euros,” commented Maciulis.
According to Swedbank data, Lithuanians have invested 3.2% of their GDP in securities and funds, while Swedes have invested almost 20 times more. (LRT/Business World Magazine)
