The middle income class is shrinking!

The coronavirus (Covid-19) epidemic caused a decline in class income distribution in the world. Pew Research Center, which published an analysis on the change in income classes in 2020, presented striking results to the public.

Cihan ABİ/Intell4

The Covid-19 pandemic is having a deep effect on the global economy and social structure. In January 2020, as reports of the novel coronavirus were emerging, the World Bank estimated that the worldwide economy would expand by 2.5 percent that year. But in January 2021, at a time when the epidemic still holds a large part of the world, the World Bank estimated that the global economy contracted by 4.3 percent last year, a turnabout of 6.8 percentage points.


The economic downturn due to Covid-19 is likely to have diminished living standards around the world, pushing millions out of the global middle class and swelling the ranks of the poor. At the same time, the path to recovery is full of uncertainties.

                                                                                                          USA based Pew Research Center published an analysis on income groups. According to Pew’s analysis, global middle class decreased by 54 million in total compared to 2019. Meantime, the number of the indigent estimated to have been 131 million higher due to the economic recession.              

South Asia, East Asia and the Pacific are at the top of the regions where the global middle class has narrowed the most. And coronavirus stalled the expansion seen in the years preceding the pandemic. India accounted for most of the increase in poverty, along with Sub-Saharan Africa. Also reversed years of progress in this region.


The global poverty tier is about $2. By global standards, the poor live on $2 or less a day, or no more than $2,920 annually for a family of four. In Turkey, the poverty tier according to global standards is about 1,72 Turkish lira (₺). In Turkey poor live on 1.72₺ or less a day, or no more than 2,516₺ annually for a family of four persons.

So, the number of people in the global high-income tier (more than $50 daily) estimated to have decreased. According to the Pew Research Center’s analysis, the number of high-income have decreased by 62 million in 2020, compared to 2019. Meanwhile, the upper-middle income population ($20.01-$50 daily) fell by 36 million, while the low-income population ($2.01-$10 daily) estimated to have increased by 21 million.

Who is the middle class? 

The middle class or middle income is a term that is a common practice among economists who tend to define the middle-class on income or consumption. But being middle-class express more than income. Such as college education, white-collar work, economic security, owning a home, or having certain social and political values. The income classes also simply be a matter of self-identification.

In the matter of income, the population divided into five groups: poor (less than $2 daily), low-income ($2.01-$10 daily), middle income ($10.01-$20 daily), upper-middle income ($20.01-$50 daily) and high income (more than $50 daily).


According to the Pew Research Center’s analysis, Covid-19 pushed millions out of the global upper-middle class to the middle, low-income class or poor class. In that situation, the business owners who went bankrupt due to Covid-19 are worse off. Because when they bankrupt, they got heavy loans. Such as credit payments, tax payments or employees’ payments.

At that point business owners who went bankrupt feel the pressure of loans and society. Because most of them spent their own life to pay these loans or commit suicide. But that does not mean, the poor or low-income class feel the economic pressure. Also, they feel the pressure as well as like business owners who went bankrupt.