OECD report shows middle class is continuing to hollow out across rich nations

Signal of change / OECD report shows middle class is continuing to hollow out across rich nations

By Ryan Jones / 12 Apr 2019

The OECD defines the middle class in economic terms of people earning 75% to 200% of the national median annual income. Within OECD nations incomes have increased 0.3% on average per year versus growth of 1.6% and 1% in the proceding decades. Housing costs now amount to a third of their disposable income which is up by 25% since the 1990's. But in most countries this erosion isn’t only growing the lower class but simultaneously rising the upper class.

 

So what?

The growth in upper class hides the underlying issue of intergenerational inequality which is also reflected by the decline in social mobility. The OECD reflects on the identiy of the middle classe in the report saying how “the middle class used to be an aspiration. For many generations it meant the assurance of living in a comfortable house and affording a rewarding lifestyle” but the undermining of nations middle class is about more than just social aspirations, “however there are now signs that this bedrock of our democracies and economic growth is not as stable as in the past.” Many factors go into influencing this decline but in a time where the West is increasingly affected by automation, severe inequality and globalization countries must develop new strategies to solidify their political stabilization and national growth.

Sources

https://qz.com/1592826/the-middle-class-is-shrinking-generation-by-generation/

What might the implications of this be? What related signals of change have you seen?

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