Global Middle Class Passing 4 Billion in 2020

The global middle class is already the largest segment of demand in the global economy and the global middle class will pass 4 billion people by end 2020 and 5.3 billion people by 2030.

The global middle class are households spending $11-110 per day per person in 2011 purchasing power parity, or PPP.

The global middle class is growing by 120 to 160 million people every year. The vulnerable group who are between the extremely poor ($1.90 per day 2011 PPP) and the global middle class. The number in the vulnerable are shrinking by 80-90 million each year.

The above is a mid-2019 distribution of the number of people at the range of daily spending levels. It can been seen that if the vulnerable and poor people doubled their income levels that over half would reach the global middle class levels. Two doublings of the income of the poor and vulnerable would have most of those people above the minimum global middle-class level. If there is 3% per year income growth then the rule of 72 indicates that they will double their income in 24 years. If there is 6% per year income growth then they will double their income in 12 years

World population is increasing by 70-82 million each year from 2020 to 2030. The world population will by 7.8 billion in 2020.

The world urban population is 4.4 billion and is 56% of the world population. The global middle class has nearly a 90% overlap with the population in cities.

The middle class in 2030 will have 1.3 billion more people, while the vulnerable group will have 900 million fewer people. Trends for the poor and the rich and more modest, at -150 million people and +100 million, respectively.

By our calculations, the middle-class markets in China and India in 2030 will account for $14.1 trillion and $12.3 trillion, respectively, comparable in size to a U.S. middle-class market at that time of $15.9 trillion.

The global middle-class growth is mostly the growing wealth of the nearly 5 billion people in Asia. It is people in China, India and southeast asia. Nearly 90 percent of the next billion people entering the global middle class will live in Asia.

The number of rich and global middle class passed the number of poor and vulnerable in September 2018.

By 2030 there will be about 3.3-3.5 billion Asians in the global middle class. A large part of the remainder in Asia will move up to global middle class by 2040.

The Asian global middle class will be around 4.5 billion by 2040. The world will have about 9.2 billion people in 2040 and Asia will have 5.2 billion. The global middle class will be around 7-8 billion by 2040.

Global middle-class wealth is about the average wealth per household in Pakistan or Nicaragua today.

30 thoughts on “Global Middle Class Passing 4 Billion in 2020”

  1. They weren’t all horrible. One was where they killed all the lawyers (according to Riker, and no one contradicted him).

  2. The only area that has above replacement level fertility rates is Africa. Even India has recently reached replacement level.

  3. If there are more benefits, we have also to remember
    that medical costs and college tuition costs have skyrocketed. The so called “Death of the middle class”
    is caused by the uniformation of salaries across the world caused by globalization, which means masses
    of poor joining the global middle class from below,
    and masses of first world workers joining it from above,
    and global middle class is a lot lower than US middle class, hence resentment and the cry for tariffs.

  4. Not to throw cold water on all this but the assumptions are all wrong. There is – most likely – not perpetual income growth in the developing economies. Statistically anyone can count the beans IF you assume a long-term 6% CAGR of incomes. But what if the growth rate slows down?

    There is much evidence that even developing economies are experiencing a slow-down in their income growth rate. The old assumptions of developing countries playing “catch up” just doesn’t show up in the numbers anymore. Several studies point to a 15 year secular stagnation in emerging economies as a result of very low productivity rates as a result of weak investment (not enough capital to “chase the others”). This results in the “middle income trap” that many countries are facing. That yes, there are avenues to get out of extreme poverty, but the door from middle income and upwards is closed, and certainly the door to enter “developed nation” status. This is India, China, most of central and west Africa.

    In other words, more people are leaving poverty, but then they get stuck. While in developed countries, the trend is upwards (e.g., US median household income is finally higher than 1998 levels). This means an increasing DIVERGENCE between developing and developed, so “on average” incomes are higher, but not for most people who need it.

  5. real wages are at the level of 1970

    Didn’t that turn out to be fake news?

    It requires a bunch of statistical errors to be stacked together to give that result.

    ..First of all that’s only using base salary/wage numbers. But an ever increasing fraction of total remuneration is in the form of benefits. If you add them in to get total remuneration then the numbers do rise over the past 50 years.
    ..The original research was looking at “unskilled and non-supervisory workers”, but this is a shrinking proportion of the total workforce. So you are comparing something like the bottom 60% of workers in 1970 with the bottom 40% in 2020.
    .. There was also some issue with using a different measure of inflation to calculate the numerator and the denominator of the equations, but I’d be making stuff up if I was to try to explain that issue.

  6. (can’t load the other sub-thread, so I’ll reply here)

    As I recall, in First Contact when the Borg jumped back in time to take over Earth, Picard et al were surprised to detect a population of 10 billion. That implies their usual population on Earth is lower.

    As Tom says, there were various wars that could have depopulated Earth, and they may have implemented population controls on top of that.

    There could also have been migration off Earth, as they definitely have multiple colonies. In our case, we may also build something like O’Neill colonies.

    Regardless, different people like different things, so I doubt there will ever be 100% urbanization (that is, 100% of the population living in cities). But the general current trend is towards more urbanization.

    But there could still be plenty of trees even inside cities, as well as large areas like Central Park. And if we build 3D cities (or large O’Neill colonies), they could hold a large population while also having large rural-like areas inside, and still leaving plenty of room for forests etc outside.

  7. Not a student of Star Trek, but wasn’t there a period of horrible wars and such, that partially depopulated the planet? Nuclear wars, a “Eugenics War”…

  8. You utterly ignore the increase in real spending power. There’s so much the middle class has access to today, only the wealthy could access in the 1970s.

    Oh, most “homeless” people are on the streets by choice, are drug addicts, or have mental problems. In 1970 it was common practice to put people with mental problems in state run asylums. During the 1970s, numerous media exposés of asylums and subsequent court cases resulted in the release of numerous asylum patients.

  9. No… redistributed wealth is wasted wealth.

    For a person to move up, it’s essential they earn that wealth.

  10. Sure we could fit all those people on 7% of the land area. Or do even better if we build some seasteads and use the ocean area. But that’d imply that either everyone simply really hates living among trees, or something is limiting development of tree-filled areas. So if everyone else is living in a megacity and Picard is living in the country, he must be one of the richest or most privileged people on the planet. Maybe retired Starfleet officers get special land-use waivers?

    The low fertility scenario works though. Or I guess we could just argue that Earth is becoming depopulated because everyone is moving to nicer planets.

  11. I wonder if the wealth redistribution of the aging/dying older generation will catapult even more vulnerable poor into the middle class by 2030 or 2040, or maybe this was taken into account.

  12. My main point was that there are social, policy, and economic feedbacks that tend towards stabilizing the population (in both directions), even assuming only current-level technologies. The AI etc was more of an addendum.

    Btw, even with business as usual current policies and population trends, global population isn’t expected to start declining until 2050 or so. The fertility rate takes a long time to change the sign of population growth (i.e. get the birth rate below the death rate, in our case).

    By that point, the death rate should drop some more just from medical advances, which may potentially give us some more time until the global population actually starts declining.

  13. I agree with you on AI point.
    I personally belive that we will achieve Singularity or Super AI before 2030, my exact date is 2027, but still there is no guarantee and we may need to wait a lot longer, say 20-30 years. That’s why instead of just commenting, “no worries, Singularity will hapen in 2027, all problems will be solved” I pretend to forget about it and just project trends using law of accelerating returns.

    Even without Sigularity and Super AI we will get to Star Trek like economical utopia way before 2100.

    The point is, more brain power (working on tech/sci progress) available at this moment and growing rapidly each year will get us there faster. Fast enough to actually experience it.

  14. I agree that overpopulation fears are exaggerated, but underpopulation fears are probably too. If the population starts dropping too much, governments can encourage more births in various ways. It’s a lot easier than limiting births. E.g. various financial and medical aids for mothers and larger families, funded by a tax on contraceptives.

    Meanwhile, people scared of population collapse may have more children, similar to some people currently avoiding children for fear of overpopulation. And the further population declines, the more resources become available to those who remain. So the economics can also shift, allowing bigger families. These things tend to self-balance.

    As far as “less people = less brain power” etc, between AI, automation, and BCIs coming online in coming decades, that may not be an issue. BCIs in particular can potentially boost available brain power by orders of magnitude. With easy access to all human knowledge and computation, and what I call an “association engine” (think of a topic, and the relevant knowledge is automatically downloaded), instead of say 1 in 10000 active geniuses, we could have 1 in 1000 or 1 in 100, or even 1 in 10. Currently, learning the advanced stuff is just too difficult.

    Finally, we may also get life extension by the end of this century, which would have a big effect on how fertility rate works. Even without it, the death rate is likely to drop by a lot in coming decades due to better treatments for the top death causes.

  15. Under the Obama administration that was true – now the middle class is strengthening again and real wages have gone up for the lower 2/5ths. Homeless population has increased because 1) we released most of the mentally ill into the streets instead of keeping them in asylums 2) Democrat policies are making it far easier to be homeless – i.e. crapping on a sidewalk is now the problem of the local business owner and not the City. 3) Strict building codes in some cities have greatly limited housing and cost have sky rocketed.

  16. Not true. Pay special attention to the graph.

    Plus, when the disparity between upper class and middle class gets too large, it becomes progressively more difficult to differentiate middle class from lower class.

    Further, rapid advances in automation are going to eliminate large numbers of middle class jobs, those that lose their jobs will have a small chance to find an equivalent job but, more likely, will have to take a lower class job, or else remain unemployed, either of which will mean they are no longer middle class.

  17. Overpopulation fear is the biggest nonsense people are spreading and are afraid of. Maybe for primitive civilization with middle age era tech and knowledge it would be HUGE problem, be we already reached level where even 100+ million more people per year could be managed quite well.
    As the tech progresses faster and faster, we could easily accomodate and take care of at least a trillion people on Earth in late part of this century. And all this assuming we will live on just one level with NYC like density, a lot of 500+ skyscrapers(with build in parks etc) taking no more than 50% available land area. Resources you ask – our solar system, after that galaxy and universe which is infinite.
    The real problem is underpopulation and population decline trend which will start soon. Not only in developed world but everywhere. India is already closing to 2.0 fertility rate(2.2 now), Africa will come down to 2.0 in 20-30 years, maybe even faster(with new tech and knowledge deployed there rapidly). You don’t need to build there thousands of expensive schools in remote areas, few breakthroughs like cheap satellite internet(SpaceX) + cheap smartphone with some additional AR/VR small gadget will provide world class education with amazing animations, almost real life graphics in VR, available for everybody.

    It is huge problem. Less people = less brain power, inventivness, creativity, less geniuses and ultimately progress potential for our human civilization in the future.

  18. Most science fiction does not take a holistic approach to dealing with scientific and technical advancements. Instead, it narrowly focuses on just a few areas, while ignoring, or nearly ignoring, most others, thus making it space-opera at best.

    Commonly we see better space ships (esp. with FTL drives) and better lasers, and then quite a few of them pretty much stop right there. These tend to include nearly everything that is referred to as “military-sf,” making it a sub-genre of space-opera.

    Those that do try to encompass it all tend to only find a niche market as most of the potential readers find them to be surpassingly strange (Accelerando, anyone?).

    Many try some workaround, such as a recent apocalypse, a horror of certain technologies (e.g. AI in the Dune series), self-aware comps going crazy or shutting down (Larry Niven’s Known Space series), religious proscriptions against life extension (or cloning) etc.

    Or else the beings that do push the limits are part of the environment, rather than protagonists and POV characters (e.g. The Solid State Entity and its peers(?) in David Zindell’s Neverness), or the frequently encountered god-like races in Star Trek.

    Best to think of Star Trek as space opera and just enjoy it as it is, rather than wonder why Picard grows wine with synthesizers available, or why he is bald and/or old when transporters can provide a full rejuvenation, or why starships have crews numbering in the hundreds and even thousands.

  19. Sci-fi always misses certain things, or deliberately skips them to make the story more interesting. Star Trek lore in particular has roots in the 60s, when many of today’s present tech was difficult to impossible to predict, let alone what we’re currently predicting. Even TNG is from 30 years ago.

    Meanwhile, back in reality, even 100 billion people would only need 10 million km^2 of urban area at NYC density (10000 people/km^2). That’d be less than 7% of Earth’s land area. So still plenty of trees. But we’re not likely to reach 100 billion – we’re below replacement rate in developed countries. So even more trees.

    As far as energy sources, the amount of solar hitting Earth is ~10000 times our total current energy use. Then there’s also nuclear etc.
    (And in the case of Star Trek, they have magic energy and off-world colonies, so it’s easier for them.)

    The key is reducing pollution sources, better recycling, etc. Food may be a challenge, but there are solutions for that too. I don’t think it’ll be a hell-hole.

  20. Lots of well-to-do are becoming rich, lots of rich are becoming super-rich,
    but real wages are at the level of 1970 (and in 1970 there weren’t so many
    homeless and destitute people).

  21. It is interesting to note how the world economy is similar to the US economy in the 1920s,
    both in per capita net Worth and income, and also in inequality of wealth distribution.
    Only, population has to be multiplied 60 times. This also tell us how deeply we in the West
    have forgotten the misery of our grandfathers.

  22. It’s not really. More people in America move from middle class to upper class, than move the other direction.

  23. Star date 2436, one would expect an over populated Hellhole world with too many people and too many building and concrete and no trees… how is It that captain Picard still lives in a place with trees and no people or pollution … But the biggest mystery is how nearly 500 years from now, nobody knows how to create an Android equal to human intelligences? They do the impossible, create objects from Pure energy, But something simple like cloning the human mind into a machine eludes them… And don’t get me started on magical tardigrades mushrooms….

  24. It s a pity that while the middle class is growing in Developing countries it is dying in First World countries like the USA.

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