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[Data] A Middle Class World

BLOG - 31 July 2019

Based on an original idea by Marc-Antoine Jamet, Mayor of Val-de-Rueil.

Inequalities, on which the G7 summit, to be held in Biarritz from August 24th to August 26th, will focus, are a constant issue of global - and French - concern. In a world irrigated with false information, where emotion often prevails over reason, it is important to take the heat out of the public debate on this subject, especially in France, a country particularly passionate about equality, where perceptions are often far from reality. Julien Damon, sociologist and associate professor at Sciences Po, shares his analysis on poverty, the middle class and inequalities in France and in the world today.

 

"There are many people who are in between, neither poor nor rich... French people who work, dreaming of being rich and in fear of being poor!" While these remarks attributed to Mazarin in Le Diable Rouge are fictional, they are nevertheless instructive on the image traditionally given to the middle classes. Neither rich nor poor, they are by definition a whole with, at times, an ill-defined amplitude and a very variable volume depending on the place and time. Overall, the essential transformation of recent years has been related to the evolution of the middle classes. They are emerging in the developing world, and relatively crumbling relatively in the developed world. The dawn of the emerging middle classes contrasts with the decline, more or less pronounced depending on the country, of the Western middle classes.

Four theoretical models of the middle class

theoretical models of the middle class

 

  • The image of the pyramid represents a very small elite, very large poor populations, and a middle class that, while central in the pyramid, is not necessarily large. These are typically emerging countries with rising middle classes.
     
  • The balloon-shaped graph shows a central and rising middle class, with a small privileged class and reduced poor categories. The image is one of common progress, driven by the dynamism of the middle class. The typical illustration is that of Western societies with an important middle class during the post-war boom. Most OECD countries look like this hot air balloon, even if it is now climbing at a slower rate, and, in some countries, the pod may come off.
     
  • The hourglass is a metaphor for the erosion of the middle class, dislocated by the enrichment of its upper stratum and the impoverishment of its lower class. This could be due to the new industrial revolution, the crushing of hierarchies, and the splitting of production between high and low end. If the image of the hot air balloon indicates a collective elevation, that of the hourglass indicates a progressive decrepitude, associated with a dualisation. It is the promise of social advancement that is missing.
     
  • The diamond image is more a project than a reality, that of a balanced society, with a very large middle class, and a very small elite and poor population. This is the Glorious Thirty’s dream project for France.

Evolution of the middle class: expansion in the developing world, crisis in the developed world

The global trend is undoubtedly towards emerging countries characterised by a large middle class, while the opposite phenomenon can be observed in wealthy countries. Among the many intervals used to define the middle class, the OECD used the one between $10 and $100 per day (in purchasing power parity) in its 2010 work. These studies reveal a global middle class, which accounted for a quarter of the world’s population in 2009, expected to represent 59% in 2030. Europe, which accounted for a third of the total in 2009, is expected to have only 14% by 2030, while 66% of the world's middle class is expected to be Asian by that date.
 

Distribution of Middle Class
Source : OCDE

 

A recent study by the Brookings Institution points out that, since 2018, for the first time in the world's history, over half of the world's population is now reported to belong to the middle or upper class. Indeed, with an interval of $10 to $110 to delimit the middle class, 200 million people are rich, 3.6 billion belong to the middle class, 3.2 billion are in a fragile situation and 600 million are poor. Thus, 3.8 billion people are poor or still close to poverty, while 3.8 billion are far from it.
 

 

According to the same study, the upheavals would be considerable by 2030: 150 million fewer poor people, 900 million fewer "fragile" people, and 100 million more rich people. The middle class, on the other hand, would gain nearly 2 billion people. While this reflects the enrichment of the emerging middle classes, it is also due to the impoverishment of some of the Western middle classes.
 

Source : Alternatives économiques

 

French social expenditure - which, at 31.2% of GDP, is the highest in the OECD as a percentage of GDP - is specific to France and is the source of the "U" curve that reflects the effects of the French tax and benefit system. In this context, the middle class comprises the households that are neither disadvantaged enough to receive social assistance nor favoured enough to benefit from tax cuts. Most of the population resides in this interval, in a country where, traditionally, two thirds of people think they belong to the middle class. This feeling of being "neither-nor", neither rich nor poor, neither a leader nor necessarily an executor, living in a district that is neither rich nor totally disadvantaged, was widely highlighted by the Yellow Vests. Enhanced by the increase in some constrained expenditures, it is particularly problematic.
 

U curve theorie


Income data do not show a real crushing of the middle class in France, as in other developed countries. But polarization is underway on several levels:

  • geographically, even if the expression calls for nuances, there is indeed a France that sees itself as “peripheral”, far from the amenities and dynamism of the great metropolis;
  • professionally, the labour market is certainly not characterised by the disappearance of work, but by its increasing polarization, with intermediate jobs (typical of the middle class) declining the most;
  • socially, the most privileged and the most disadvantaged seem to capture the majority of attention, between the "startup nation" and strategies to reduce poverty, while the middle class, the majority in perception, feel forgotten.
     
Class polarization


In the world, the evolution of the middle class is the major transformation that occurred in recent years. If today, over half of the world's population belongs to the middle class or the privileged class, we are witnessing two opposite phenomena: the emergence of the middle class in developing countries, on the one hand, and the relative decline of the Western middle class, on the other. While France differs from most developed countries in this respect, it is nevertheless polarized geographically, professionally and socially.

 

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