The world's poor are getting richer, and with that comes the rise of a global "middle class." But does that mean suburban America is taking root in countries like China and India?
The number of people living in extreme poverty is lower than ever
The world's poor are getting richer, and with that comes the rise of a global "middle class." But does that mean suburban America is taking root in countries like China and India?
The number of people living in extreme poverty is lower than ever, according to a report by the Center for Global Development. But be wary of equating "middle class" with "comfortable" in developing countries, says Slate's Joshua Keating, who notes that the African Development Bank has issued the oft-used statistic that “the middle class had risen to 34 percent of Africa’s population, or nearly 350 million people” — but it defines middle class as living on more than $2 per day.
Using the same measure of $2 a day, the Asian Development Bank says its middle class has leapt from 31 percent to 82 percent over the past 20 years, notes Keating, and an analysis from the World Bank boasts that 1.2 billion people entered the middle class between 1990 and 2002.
But $2 a day isn't a lot of security, even in emerging economies, Nancy Birdsall, president of the Center for Global Development, told Slate.
“When you get to $2, you are still really poor,” she says. “You are not secure at $2 even in really poor countries. At least in Latin America, it’s only when you get per person something like $10 that you’re reasonably secure from being thrown back into poverty. Until you get to $10, you’re kind of bouncing around.”
Her research found that even at $5 a day, people had a 40 percent chance of slipping back into poverty, but at $10 a day, the chance shrank to just 10 percent. Others suggest that middle class status should be measured by purchasing power, not income, and could be based on whether someone can buy things like a car or a cellphone.
Even in the United States, which has long prided itself on its middle class, the term doesn't mean what it used to. As incomes have stagnated and inequality has grown, the middle class has become less stable and comfortable.
"There seems to be a lot of evidence out there that the status of middle class is almost the new poor," writes Geoff Williams of U.S. News. He notes that in a recent survey by Country Financial to measure Americans' financial security, 59 percent of respondents said they were no longer certain that it's possible to live a "middle class" existence and be financially secure.
As far as what middle class actually means, there is no official definition, but federal poverty guidelines draw the poverty line at a household of four living off $23,850 or less. Robert Reich, a professor of public policy at the University of California-Berkeley, told U.S. News that the middle class could be defined as households making 50 percent higher and lower than the median, which would be an annual income of $25,000 to $76,000. By this measure, some in the middle class could be relatively comfortable, with some scraping by.
But regardless, it seems that everyone wants to think of themselves as middle class, even if that's not the case. "The reality created by the commercial mass media is one in which everyone is middle class," Kate Ratcliff, professor of American studies at Marlboro College, told U.S. News. "Advertising, television and movies all convey a world in which middle-class affluence is an American birthright."
As for developing countries, they like to claim middle class status for their own reasons, Birdsall told Slate. “Developing countries that are growing fast take pride in that they’re getting richer," said Birdsall. "Part of the discussion for them is, ‘We also have now a middle class. We’re not just poor countries.’ ”