The middle-class dream is moving beyond millennial reach

 

Middle class

(Peter Hershey, Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Emma Charlton, Senior Writer, Formative Content


Do you feel like your cost of living is rising?

If so, you’re not alone. Years of low income growth and increasing prices have made the “squeezed middle” a reality for many, with new research showing young people’s prospects are among the hardest hit.

The middle class is shrinking in most countries and represents an out-of-reach dream for younger generations, according to the OECD’s report Under Pressure: The Squeezed Middle Class. Just 60% of millennials – people born between 1983 and 2002 – are part of middle-income households in their twenties, compared with almost 70% of baby boomers.

Image: OECD report, Under Pressure: The Squeezed Middle Class

“The middle class used to be an aspiration,” the report says. “However, there are now signs that this bedrock of our democracies and economic growth is not as stable as in the past.”

A healthy middle class matters, not just for equality and inclusion, but also because it propels consumption growth and investment and generates tax income that helps fund social safety nets.

OECD ➡️ Better policies for better lives

@OECD

🆕📘 The in OECD countries is struggling. The number of people in the middle-income group has shrunk and its economic influence has declined.

Find out more in @OECD_Social‘s new report ➡️ http://oe.cd/2yA 

View image on Twitter

OECD ➡️ Better policies for better lives

@OECD

Why are households under pressure? Because they feel…

💰 The socio-economic system is unfair
🏠 Life is expensive
🤖 Job prospects are uncertain

Read more on how governments can help them in @OECD_Social‘s latest analysis ➡️ http://oe.cd/2yA  pic.twitter.com/3L1YQPD7XK

View image on Twitter
31 people are talking about this

The OECD defines middle class as a range around the median household income, which varies from country to country. In the US, that’s between about $23,000 and $62,000, whereas in Mexico it’s about $4,000 to $10,000.

Shrinking away

While the absolute amounts vary from country to country, the global patterns are clear: income growth is sluggish and the cost of goods and services associated with a middle-class lifestyle are increasing.

One in five middle-income households spend more than they earn, and over-indebtedness is higher for them than for both low-income and high-income households, the report says. In addition, automation and the Fourth Industrial Revolution have destabilized the labour market, creating uncertainty around job prospects and opportunities for many people.

Image: OECD report, Under Pressure: The Squeezed Middle Class

These themes are echoed in the World Economic Forum’s Inclusive Development Index, which ranks economies using three pillars: growth and development, inclusion, and intergenerational equity and sustainability.

Ranking inclusive growth.
Image: Inclusive growth and development report

Norway tops the list, with low income inequality and high living standards, and the report cites its “robust and generous social safety programmes”. The UK ranked 21st and the US was 23rd.

“Slow progress in living standards and widening inequality have contributed to political polarization and erosion of social cohesion in many advanced and emerging economies,” the report says. “This has led to the emergence of a worldwide consensus on the need for a more inclusive and sustainable model of growth and development that promotes high living standards for all.”

Government levers

Policy-makers need to recognize, prioritize and better measure inequality to maintain public confidence and raise living standards, according to the Forum. In a similar vein, the OECD says policies need to consider shifting the tax burden from labour income to income from capital, property and inheritance, as well as making income taxes fairer.

Image: OECD report, Under Pressure: The Squeezed Middle Class

Listening to those at risk of being left out is also important. In 2011, Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, started the Global Shapers Community to empower young people and help them play an active role in shaping their future. In a survey, members of this community cited income as the second biggest contributor to inequality, after corruption.

Image: World Economic Forum Global Shapers Survey

Rocky waters

The OECD says a comprehensive action plan is needed, and one that improves access to high-quality public services and ensures better social protection. It also recommended that policies encourage the supply of affordable housing and offer financial support and grants.

“Today the middle class looks increasingly like a boat in rocky waters,” says OECD Secretary-General Angel Gurría. “Governments must listen to people’s concerns and protect and promote middle-class living standards. This will help drive inclusive and sustainable growth and create a more cohesive and stable social fabric.”

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

A Valentine’s Special: giving back, a dialogue of love

Ebola: EU announces new funds to strengthen preparedness in Burundi

COVID-19: Why we must take the widescreen view of workforce uncertainty

COP21 Breaking News_08 December: Cities & Regions Launch Major Five-Year Vision to Take Action on Climate Change

3 things the G20 can do to save the World Trade Organization

4 ways to scale up Europe’s green technology through better funding

Brussels to point the finger to Washington for lack of commitment over TTIP

The impacts of working conditions on the quality of the healthcare system

What do Europeans believe about the crisis and the possible way out?

FROM THE FIELD: Going the extra mile with vaccines

Eurozone dignitaries play with people’s life savings

Tackling pollution and climate change in Europe will improve health and well-being, especially for the most vulnerable

Student-teacher ratio in terms of numbers and quality: an opinion article of nowadays context worldwide

MEPs debate Brexit and relations with China following EU spring summit

Here’s how to cope with stress, according to the World Health Organization

Climate change and health: an everyday solution

Pedal power makes ‘positive impact on climate’, urges UN on World Bicycle Day

Paid paternity leave should be the norm in the US

Far from a healthy Health Workforce: lack of workforce planning leaves our citizens without access to proper care

Doctors without borders

Let us keep ‘their spirit of service alive’: Guterres leads tributes to UN workers who died in Ethiopia crash

Family-friendly policies benefit all of us. Here are 4 ways to boost them

Fair and Simple Taxation: Commission proposes new package of measures to contribute to Europe’s recovery and growth

Youth Forum welcomes positive ruling on non-EU student visas

Can Southeast Asia keep up with growing energy demand?

Easier Schengen Visas for non-EU holiday makers: A crucial issue for south Eurozone countries

What matters most to young Europeans?

Scaling for success: SMEs, tech innovations and the ITU Telecom World Awards 2019, in association with The European Sting

State aid: Commission approves close to €94 million support for waste-to-energy high-efficient cogeneration plant in Bulgaria

11 lessons the history of business can teach us about its future

Bringing nuclear test ban treaty into force a ‘central pillar’ of global disarmament push, says UN chief

The link between air pollution and COVID-19 deaths

What is inclusive capitalism, and why does it matter?

When did globalization begin? The answer might surprise you

Why do thousands of migrants need to be drowned for Brussels to wake up?

The Netherlands is paying people to cycle to work

US Tariffs on Steel and Aluminium: Statement of Trade Committee Chair

How technology and play can power high-quality learning in schools

Online government services could change your life. But only if you have access to the internet

Governments adopt UN global migration pact to help ‘prevent suffering and chaos’

Great Reset: Why LGBT+ inclusion is the secret to cities’ post-pandemic success

UN chief welcomes establishment of inclusive government in Central African Republic

Asia-Pacific showing ‘decisive leadership’ on road to 2030 Sustainable Development Goals, deputy UN chief tells key forum

Mental health In Times of a Pandemic: What can each Individual to lessen the Burden.

Juncker Investment Plan for Europe welcomed by European Youth Forum

New Disability Inclusion Strategy is ‘transformative change we need’, says Guterres

Rapid action needed for people to meet challenges of changing world of work

Should tech companies pay us for our data?

Commission statement on the European Remembrance Day for Victims of Terrorism

Africa-Europe Alliance: European Commission committed to a sustainable African agri-food sector

Future Forces Forum: Prague will be hosting the most important project in the field of Defence and Security

German synagogue shooting ‘another tragic demonstration of anti-Semitism’: UN chief

3 reasons why Singapore is the smartest city in the world

FROM THE FIELD: Changing world, changing families

Free and secure access needed in DR Congo conflict zone to tackle Ebola – WHO

This new initiative aims to make cybercrime harder – and riskier – to commit

The entire Australian state of New South Wales is in drought

UN rights chief ‘strongly’ condemns ‘shocking’ mass executions in Saudi Arabia

The European Brain Drain: hard facts and harder truths

France, Germany challenge Trump’s America on Iran and the reign of the dollar

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s