January 20, 2014
When a million people swarmed on to the streets of Brazil last June there was consensus that the protest was a phenomenon of the “new middle class” – squeezed by corruption and failing infrastructure. As the Thai protests continue, these too are labelled middle class: office workers staging flashmobs in their neat, pressed shirts.
But what does middle class mean in the developing world? About 3 billion people earn less than two dollars a day, but figures for the rest are hazy. Now, fresh research by the International Labour Organisation (ILO) economists shows in detail what’s been happening to the workforce of the global south during 25 years of globalisation: it is becoming more stratified – with the rapid growth of what they term “the developing middle class” – a group on between $4 and $13 a day. This group has grown from 600 million to 1.4 billion; if you include around 300 million on above $13 a day, that’s now 41% of the workforce, and on target to be over 50% by 2017. But in world terms they’re not really middle class at all. That $13 a day upper limit corresponds roughly to the poverty line in the US in 2005. So what’s going on?
The ILO researchers mined data from 61 household surveys across the world to come up with these figures. In the process they adopted a rough definition of the lifestyle of the sub-$13 group. The key markers were: families had access to savings and insurance, were likely to have a TV in the home and to live in smaller households (four people). They would typically spend 2% of their income on entertainment – plus they would have better access to water, sanitation and electricity. These, then, are the “winners” from globalisation: an expanding group for whom global growth has meant a serious rise in real income, year after year, compared with the recent near stagnation of incomes for working and lower-middle-class families in parts of the developed world.