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Rise of the Global Middle Class

The size of the global middle class is increasing at a rapid rate, with a growing proportion of the world's population neither rich nor poor. While the rich are undoubtedly getting richer, according to some figures, over half the world's population has emerged from poverty to enter the middle of the income distribution. For the first time since agriculture-based civilization began 10,000 years ago, the global middle class has become the majority.

According to figures from Brookings, using data from September 2018, "the majority of humankind is no longer poor or vulnerable to falling into poverty." While the poor have been in the majority throughout recorded history, just over 50 percent of the global population now have enough discretionary expenditure to be considered middle class. At roughly 3.8 billion people, the emerging middle class seems to have reached a significant tipping point.

These claims are based on a classification of households according to their daily spending, with individuals spending less than US$1.90 per day said to be living in extreme poverty, those spending between US$1.90-11 said to be living in vulnerable households, and those spending US$11-110 per day recognised as being in the middle class. While there is no precise definition of the middle class, it usually describes people who have enough discretionary income to buy consumer durables and spend money on entertainment.

While other figures differ from this rather optimistic perspective, everyone agrees that the emerging middle class is an undeniable force. According to separate figures from the OECD Development Centre, the middle class will grow from 1.8 billion people in 2009 to 3.2 billion in 2020 and 4.9 billion by 2030. Rather than measuring spending power according to global standards, OECD figures look at national standards of income distribution in each country. While the middle class has traditionally been based in Europe and North America, the economic landscape is currently going through a major shift.

The vast majority of middle class growth will come from Asia over the next decade, with Asia set to represent 66 percent of the global middle class population by 2030 and 59 percent of middle class consumption. When you compare these figures to the 2009 results of 28 percent and 23 percent respectively, you can see just how quickly the world is changing. While China and India are the world's biggest emerging nations, many nations in South America and sub-Saharan Africa also have a rapidly emerging middle class.

While more people breaking through poverty lines is always good news, the rise of the middle class will also put additional pressure on sensitive agricultural, environmental, and economic systems. Sales of refrigerators, television sets, and mobile phones are already surging in many countries, at the same time as other countries suffer from air pollution and lack of water. The rising expectations of the middle class is also causing problems in many developing countries, with public healthcare, education, and infrastructure lagging behind the private economy.


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