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Report: Pandemic Shrunk Global Middle Class by 150 Million

Chris Gaetano
Published Date:
Apr 7, 2021

A recent report indicates that 150 million people worldwide have lost their middle class status and slipped down the socioeconomic ladder, the first such retrenchment in over 30 years, Bloomberg reported.

The Pew Research Center, which release the report, defines middle income, on a global basis, as $10 to $20 a day, and upper-middle income as $20.01 to $50 a day (in the United States, minimum wage earners make a little more than $50 per day). The pandemic, according to Pew, defied previous expectations for growth; while the ranks of the middle class were expected to reach 1.38 billion, their number instead is thought to be 1.32 billion, a drop from a 17.8 expected share of the population without the pandemic to an actual proportion of 17.1. Meanwhile, the ranks of the global poor grew to 803 million last year, far greater than the previously anticipated 672 million, resetting a steady downward trend in the poverty rate: it was 10.4 percent, the level it was at in 2017, versus the 8.7 percent previously expected.

The data indicates that India seems to have suffered the most, with its middle class shrinking by 32 percent, followed by the South Asia region, losing 25 percent. As far as the increases in global poverty, Pew said these are concentrated mainly in Africa and Asia.

Depending on whom you ask, though, the global middle class has been shrinking for some time. In 2019, for example, an Organisation for Economic Co-operation and Development (OECD) report said that  the percentage of people who are middle class fell from 64 percent in the mid-1980s to 61 percent in the mid-2010s. But the OECD defined middle class as those whose household earnings are between 75 percent and 200 percent of the median national income, so it is relative measurement, rather than Pew's absolute metric. The results can also change depending on where someone looks: a Pew study from 2018 said that the middle class in the United States specifically shrank by 9 percent since the 1970s, going from 61 percent in 1971 to 52 percent in 2016. In this case, though, Pew defined middle class as adults whose annual household incomes are two-thirds to double the national median, after the incomes have been adjusted for household size. In 2016, the national middle-income range was about $26,093 for single persons, $36,902 for couples, $45,195 for a family of three, $52,187 for a family of four, and $58,347 for a family of five.

However it might be noted that while the particulars may vary, all these studies agree that the middle class in general is shrinking, a consequence of rising economic inequality the world over. The only differences seem to be how much, and how fast.

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