This middle class story is probably bigger in terms of the number of people affected. We believe that another story relates to the rapid emergence of the global middle class. Our social enterprise World Data Lab-the maker of World Poverty Clock-has refined these estimates and created a new interactive data model to estimate all income brackets for almost every country for every point in time until 2030 by combining demographic and economic data.Ī lot has been written about the world’s progress in reducing the number of people living in extreme poverty, as highlighted in the recent Goalkeepers report put out by the Bill and Melinda Gates Foundation. And they are reasonably confident that they and their family can weather an economic shock-like illness or a spell of unemployment-without falling back into extreme poverty.īy classifying all households in the world into one of these four groups, using income and expenditure surveys from 188 countries, we are able to derive measures of the global distribution of income.
They can afford to go to movies or indulge in other forms of entertainment.
While acknowledging that the middle class does not have a precise definition that can be globally applied, the threshold we use in this work has the following characteristics: those in the middle class have some discretionary income that can be used to buy consumer durables like motorcycles, refrigerators, or washing machines. Our “middle class” classification was first developed in 2010 and has been used by many researchers. Two other groups round out our classification: vulnerable households fall between those in poverty and the middle class and those who are at the top of the distribution who are classified as “rich.” We make these claims based on a classification of households into those in extreme poverty (households spending below $1.90 per person per day) and those in the middle class (households spending $11-110 per day per person in 2011 purchasing power parity, or PPP). Barring some unfortunate global economic setback, this marks the start of a new era of a middle-class majority.
After this, for the first time ever, the poor and vulnerable will no longer be a majority in the world. So September 2018 marks a global tipping point. By our calculations, as of this month, just over 50 percent of the world’s population, or some 3.8 billion people, live in households with enough discretionary expenditure to be considered “middle class” or “rich.” About the same number of people are living in households that are poor or vulnerable to poverty. For the first time since agriculture-based civilization began 10,000 years ago, the majority of humankind is no longer poor or vulnerable to falling into poverty. Something of enormous global significance is happening almost without notice.
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