Who makes up the global middle class? Economists aren’t sure

Who makes up the global middle class? Economists aren’t sure

We know that economists don’t always agree on the best path to prosperity. It turns out that they don’t agree on what prosperity looks like, either, according to a blog post last month from The Center for Global Development.

This infographic, from the Socio-Economic Database for Latin America and the Caribbean and the World Bank, shows confusion among several economists as to who makes up Brazil’s growing middle class, based on household income.

Definitions by different economists show confusion around who makes up Brazil's middle class. Image: Center for Global Development
Definitions by different economists show confusion around who makes up Brazil's middle class. Image: Center for Global Development

What it means is that while incomes are undoubtedly increasing in emerging markets like Brazil, according to Foreign Policy, there’s no set way to define the global middle class in a way that’s consistent.

Economists use different thresholds to talk about the middle class. Some base their definitions on the middle range income for a given country, while others use absolute cut-offs such as an income of more than $2 a day, according to the Center for Global Development post.

There is no agreement among economists on the appropriate income/consumption thresholds to identify the middle class – not even on whether it is relative or absolute income that matters.

Some economists advocate a universal definition to make it easier to determine when a family is out of poverty. Nancy Birdsall, the author of the Center for Global Development piece, has suggested a “global identification, based on an absolute $10 threshold at the bottom...and at the top a country relative cut-off.”

What is clear is that the overall global population with rising incomes is getting bigger. This chart from the World Bank Development Research Group shows what those numbers look like in several emerging economies.

Middle class population figures in several emerging economies using a $10-$50 income per day definition. Image: Center for Global Development
Middle class population figures in several emerging economies using a $10-$50 income per day definition. Image: Center for Global Development

But until it becomes easier to talk about who makes up a global middle class, it will be hard to understand how to get people into it.

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