“We’re all middle class now”. Or should that be middle income?

As the comedian Mark Steel once said, “anybody who says we’re all middle class now obviously hasn’t been to Wigan” (I can make that joke because my dad’s from there). One huge global cause for celebration is that the scourge of absolute poverty is in retreat. Instead we hear much more about rising inequality within nations, which is progress, of a sort. In amongst these discussions is talk of a rising new middle class (see above – link here). What might this mean?

The graph shows the decline in 'extremely poor employment' across the globe, and increases in ‘middle class’ employment. The surprise is that ‘middle income’, by this definition starts at incomes of between $4 and $13 a day. Paul Mason writes eloquently about these people in The Guardian.

Fresh research by the International Labour Organisation (ILO) shows in detail what's been happening to the workforce of the global south during 25 years of globalisation: it is becoming more stratified – with the rapid growth of what they term "the developing middle class" – a group on between $4 and $13 a day. This group has grown from 600 million to 1.4 billion; if you include around 300 million on above $13 a day, that's now 41% of the workforce, and on target to be over 50% by 2017. But in world terms they're not really middle class at all. That $13 a day upper limit corresponds roughly to the poverty line in the US in 2005. So what's going on?

The ILO researchers mined data from 61 household surveys across the world to come up with these figures. In the process they adopted a rough definition of the lifestyle of the sub-$13 group. The key markers were: families had access to savings and insurance, were likely to have a TV in the home and to live in smaller households (four people). They would typically spend 2% of their income on entertainment – plus they would have better access to water, sanitation and electricity. These, then, are the "winners" from globalisation: an expanding group for whom global growth has meant a serious rise in real income, year after year, compared with the recent near stagnation of incomes for working and lower-middle-class families in parts of the developed world. The article explains that many of these people work in services, not manufacturing - a process that happened to their rich-world counterparts in the 1960s and 70s.

Mason describes a scene – “Go to the reality of being "new middle class" in Brazil, Morocco or Indonesia and the word "comfortable" does not spring to mind. It means often living in a chaotic mega-city, cheek-by-jowl with abject poverty and crime, crowding on to makeshift public transport systems and seeing your income leach away into the pockets of all kinds of corrupt officials, middlemen and grey market people. This in turn has shaped what people protest about.”

Powerful stuff. Progress, of a sort.

And an astonishing conclusion: "what was unthinkable 20 years ago is now becoming tangible: that the real incomes of skilled workers, knowledge workers and managers in "developing countries" are overlapping with those at the bottom of the heap in western society".