The Global Middle Class Shrinks For the First Time in Decades
April 12, 2021
The global middle class shrank last year for the first time since the 1990s, according to a recent report from Pew Research. More than 150 million people fell down the economic ladder in 2020. That’s equivalent to the population of Germany and the U.K. combined. The declines were biggest in South Asia and sub-Saharan Africa.
Pew defines middle class as anyone making between $10 and $20 per day. They also have an upper-middle class that consists of those making $20.01-$50 per day. Together these groups account for 2.5 billion people or roughly one-third of the world’s population.
The pandemic has hit developing economies harder than developed ones. India is estimated to end 2021 with a GDP 5.2% than if the pandemic had not occurred. Indonesia’s economy will be 9.2% smaller. The U.S.’s will be just 1.6% smaller.
India’s middle class was hit especially hard, shrinking by 32 million people. While the nation’s poor bore the brunt of the economic pain, about 21 million white-collar salaried jobs like educators and engineers were also lost between April and August of last year.