Pew Report: 2% of India achieved middle-income, 2001-11

A major new report from the trustworthy Pew Research Center has just appeared.

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Pew finds that the global middle class (earning $10 to $20 a day) has doubled in just ten years, 2001-2011. These people are now 13% of the total global population. Meanwhile, those in poverty (earning less than $2 a day) has halved, and are now 15% of the global population. Many of those who were previously poor have moved up into the middle ($3 to $9 a day), boosting that transitional band by 6%. And all this despite a devastating global recession in 2007-11.

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But where is it happening?

The Pew figures are not quite the good news they seem to be. The new $10-to-$20 middle class is mostly to be found in “China, South America and Eastern Europe” according to Pew. Though in some way that might be encouraging — as South America and Eastern Europe are not exactly areas known for their staunch lack of tax evasion and off-the-books working, so one does have to wonder if their official income statistics may actually underplay real income growth there.

The same is true of Africa. But it seems certain that Africa’s middle class had overall barely expanded overall by 2011. It seemed to be held back somehow, even in growing economies. One has to suspect that corruption, educational failings and lack of free trade all have a strong slowing effect. Possibly a lack of reliable statistics, when considered over the whole continent, also obscures our view of the reality on the ground.

India:

What of India? Pew’s report summary seems to depreciate the way that India’s vast population amplifies such changes. Pew states that India “only” saw 2% of people rise into the $10-to-$20 middle income group in this period…

“the share of the Indian population that could be considered middle income increased from 1% to just 3%”

Yet 2% of India’s massive 1.2 billion population is not to be sniffed at, especially considering that the rise was achieved in the face of domestic political stagnation and a deep global recession. A rise of 2% means that 2.4 million Indians achieved a middle income, in just one decade. In 2014/5 those 2.4 million are very probably directly and very positively impacting the lives of at least 6 million young children. Many of these new earners will also be geographically concentrated toward the coastal cities, thus probably boosting the general climate of aspiration there. Overall, the changes seem to offer a very promising base for India’s future growth, especially as India’s rural poverty also fell strongly during this period.

Overall those global figures are good news for the world, especially as they cover a period of just ten years. It’ll be fascinating to see the 2011-2016 global figures, circa 2017/18.

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