A global middle class is ‘more promise than reality’

In a report released Wednesday, July 8, 2015, the Pew Research Center says China’s rise in living conditions, with 203 million people there moving into a middle-income life over the decade starting in 2001, has resulted in what the report calls a “pivot to the east”. Only 13 percent of the world’s population was considered middle income in 2011; 56 percent were considered “low-income”. Second, being poor in the United States isn’t a privilege by any means, but the fact is that our concept of minimally acceptable living standards is extremely high, which goes a good way toward explaining why people from countries where the “middle class” is growing, especially in Asia, are still happy to immigrate here. Andrew Dabalen, lead economist with the World Bank’s Poverty Global Practice, adds that a robust middle class with even modest purchasing power can grow national economies, as well as contribute to the greater of the larger society.

“In 2011, only 16% of the world’s population was living on $20 or more daily, a little above the US poverty line”. For ease of exposition, the report refers to income ranges in whole numbers, such as $10-20 in reference to who is middle income.

And despite China’s rise, more than three-fourths of its people were still poor or low-income.

Meanwhile, during the period, the middle class “barely expanded” in India, Southeast Asia and Central America.

This report divides the population in each country into five groups based on the daily per capita consumption or income of a family.

When it comes to the upper middle income, most live in Europe and North America. So, some of the BRICS – China, Brazil and Russian Federation – were important contributors.

The Pew Research Center recently posted a study analysing the distribution of income around the world.

Over the course of the decade that Kochhar looked at, the global middle class did expand. Combining the two groups, people living on less than $10 a day fell from 79 percent of the global population to 71 percent. The $10-20 a day that qualifies people as middle income globally translates to $14,600 to $29,200 annually for a family of four.

Happily, many experts have predicted that this pattern will continue.

Additionally, the US National Intelligence Council posited this trend as a potential portent of political change. In China, despite the more successful policies, the share is still 78 per cent, the study says.

Despite this rosy forecast, the author of the Pew report remains skeptical that we’re getting close to such a pivotal moment.

A rising economic tide has been concentrated in just a few regions of the world, and it’s failed to raise many people into the middle class. For now, moreover, this new middle class is a preponderantly Asian phenomenon.