A Global Middle Class Is Still Struggling to Emerge

In the latest analysis, fewer people are categorized as ‘poor,’ but the majority remain low-income.

Street market in Delhi, India. (Photo: Peter Adams/Getty Images)

Jul 9, 2015· 1 MIN READ
Anna Hess is an editorial intern at TakePart. She is a reporter for the University of Pennsylvania’s daily newspaper, The Daily Pennsylvanian, and mentors students in West Philadelphia public schools.

A global middle class is further away than we might hope, a Pew Research Center report confirmed on Wednesday.

A majority of the world’s population continues to live on low-income wages or in poverty, with 71 percent living on less than $10 a day.

Compare that with the 13 percent of people who Pew says live on middle-income wages—those who exist on $10 to $20 a day, which is an annual income of about $14,600 to $29,200 for a family of four, according to the report’s analysis of data from 2011, the latest available.

Even in the U.S., a dollar is worth less in California than it is in Mississippi, so how do these dollars translate to the reality on the ground across global regions? The worldwide middle-income range in the report straddles the 2011 official poverty line in the United States, which was $23,021 for a family of four, meaning poverty for the U.S. is considered middle class globally.

So, Why Should You Care? The middle class matters because it demonstrates the strength of a country’s economy, and political scientists have long argued that a strong middle class is “essential for the existence and stability of democratic institutions,” the report found. Societies that have a bigger middle class also tend to have less income inequality.

Every country gets a widely different bang for its buck—the report’s $2-a-day poverty line is the reality in India, yet an adjusted $15.77 poverty line for a family of four was the American standard in 2011. Researchers accounted for the variable worth of the dollar by using data on purchasing power and price levels within countries.

Asia and the South Pacific have seen the greatest improvements in terms of percentage of the population rising above the poverty line—36 percent was deemed poor a decade ago, and the figure dropped to 16 percent in 2011. Africa and South America have also both seen solid 10 percent decreases in the size of their impoverished population from 2001 to 2011, with Africa’s poor down to 39 percent of the population. Just 7 percent of South America is deemed poor.

The study deems 9 percent of the world’s population upper middle class—existing on $20 to $50 a day—and only 7 percent as high income, or living on more than $50 a day.

The Pew research confirms that middle-class growth varies significantly along regional lines. The reported middle-class rise was mostly confined to certain growing regions—China, South America, and Eastern Europe—while it barely increased in India and Southeast Asia, Africa, and Central America. Almost 90 percent of the world’s high-income families still live in Europe and North America.