Is the middle class becoming more and more evolved? Or is an emerging class simply being rebranded as the new middle class? In February 2009, The Economist asserted that over 50 per cent of the world’s population had entered the middle class, primarily because of explosive growth in emerging markets. It defined the middle class as starting at the point where people have roughly a third of their income left over for discretionary spending after paying for basic food and shelter. It characterised the middle class as those who don’t live from hand-to-mouth like the poor do. This enables people to purchase consumer items, enhance their healthcare, and pay for their children’s education.

The Lewis model of a dual economy has gained relevance in the US, according to MIT economic historian Peter Temin’s 2017 book, The Vanishing Middle Class. A number of factors, including globalisation, deindustrialisation, new technologies that benefit capitalists and professionals, and dwindling labour protections, have led to a growing divide between winners and those left behind.

A different situation

While the US has seen a decline of the middle class, or more colloquially, “middle-income” individuals, the situation in many other countries, notably India, is very different. An independent, non-profit think tank called People Research on India’s Consumer Economy (PRICE) published a report in 2023 titled, The Rise of India’s Middle Class. The middle class in India more than doubled to over 30 per cent of households after the start of economic liberalisation in 1991, with favourable effects on growth, consumption, urbanisation, and social mores, according to PRICE. It predicts that by 2047, 63 per cent of Indian households will belong to the middle class if the country implements the essential political and economic reforms.

Clearly, there are varied opinions regarding the composition and number of middle-class individuals. The definition of the “middle class” in a given country varies depending on a number of characteristics, including social service levels, educational attainment, purchasing power, and opinions about who is considered to be wealthy.

In 2015, two economists from Mumbai described the middle class as those who spend between $2 and $10 per person on daily expenses. By this measure, the middle class currently comprises around half of the Indian population. In contrast, when incomes have been adjusted for household size, people in the middle class are those whose yearly household income was two-thirds to twice the national median income in 2020, according to a Pew Research study from 2021. The majority of organisations, like the OECD and the World Bank, state that middle-class people usually make between $10 and $100 a day, as indicated by the 2015 purchasing power parities.

A social class

In late feudalist society, Friedrich Engels defined the “middle class” as a social class in between the nobles and the peasantry. The word “middle class” was first used in the modern era in the UK Registrar-General’s report in 1913. THC Stevenson, a statistician, defined the middle class as individuals who are in between the upper and working classes.

Homi Kharas of the Brookings Institution chronicled the history of the middle class from its beginnings in Victorian England to present-day India in his book The Rise of the Global Middle Class: How the Search for the Good Life Can Change the World, published in 2023. Perceived as Kharas, the quest for a better life that began just over 200 years ago has propelled an unparalleled worldwide shift.

This class is now seen as a thriving and dynamic catalyst for economic growth on a worldwide scale. It also plays a crucial role in promoting other social developments that support the proliferation of components that support a healthy society and stimulate growth in other areas. The late eminent MIT economist Lester Thurow succinctly summarised the significance of this class when he said, “A healthy middle class is necessary to have a healthy political democracy. A society made up of rich and poor has no mediating group either politically or economically.”

Homi Kharas asks in his book if the middle class can withstand the pressures of consumption, politics, pollution, automation, and unemployment, or if it will eventually collapse. In order to address the urgent problems of inequality, climate change, and technological advancements, he offers a new manifesto for the middle class.

In any case, the middle-class identity is constantly changing due to ever-evolving global scenarios. Consequently, the traditional middle class gives rise to a neo-middle class, and little is known about the many social and economic identities of this class, let alone what they desire from society and politics. All we know is that today’s middle-class people probably differ greatly from RK Laxman’s portrayal of the dhoti-clad, silent “common man.” Crucially, this is too significant, diverse, and influential social class to be ignored on both an economic and political level.

The writer is Professor of Statistics, Indian Statistical Institute, Kolkata