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For the first time since the 1990s, the global middle class shrank last year, according to a recent Pew Research Center estimate. About 150 million people, a number equal to the populations of the U.K. and Germany combined, tumbled down the socioeconomic ladder in 2020, with South Asia and sub-Saharan Africa seeing the biggest declines.
Defining the parameters of this global middle class has long been a contentious exercise. Pew, which has been researching the topic for more than a decade, labels as middle income those making from $10.01 to $20 a day, using data that smooth out differences in purchasing power across countries. In Pew’s analysis, there’s a separate upper-middle-income band made up of those earning $20.01 to $50 a day. (Note that $50 per day falls shy of what a minimum wage worker in the U.S. takes home pretax for an eight-hour day.) Others, such as the Brookings Institution, have opted for a more expansive $10 to $100 a day definition.
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