Those who fear increasing inequality should take to heart a new study that finds the middle class is expanding, gaining about 70 million people a year in an unprecedented worldwide boom.
Better yet, says Jim O'Neill, global chief economist at Goldman Sachs and author of the study, the trend is likely to continue for at least 20 years, with the global middle class making annual gains of 90 million people a year by 2030. That will mean a total of 2 billion newly minted middle-class inhabitants of planet Earth in the next two decades. The study defined membership in the middle class as having an income of between $6,000 and $30,000 a year in purchasing power parity terms (in current U.S. dollars and prices).
India and China are growth powerhouses, but even without those two giants the expansion of the middle class would still total about 20 million a year. That includes millions of new middle-class members in other Asian countries, Eastern Europe, Latin America, and the Middle East.
Meanwhile, the number of people living on incomes of less than $1,000 a year (in 2008 dollars) has fallen from 50 percent of the world's population in the 1970s to 17 percent in 2000. Probably no more than 5 percent of the world's population now lives on less than a dollar a day, the World Bank's definition of poverty.