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Developing World's Growing Middle-Class 'Could Boost Economies'

By DANA SMITH

Tribune Staff Reporter

dsmith@tribunemedia.net

THE International Labour Organisation said the emergence of a growing middle-class in the developing world over the next few years could give economies in these areas a boost.

In a statement released to the press, the ILO said the number of middle-class workers in developing countries has “risen sharply” over past decades and figures suggest that number could continue to grow in the future.

In developing countries, particularly East Asia, nearly 1.1 billion workers – or 42 per cent of workers – are now considered middle-class, the ILO said, meaning their families are living on more than $4 per person, per day.

The organisation estimates that by 2017, an additional 390 million workers in the developing world could become middle-class.

This continued rise in middle-class workers could boost consumption and thus boost the economy, according to ILO researcher Steven Kapsos.

He explained that middle-class workers can invest more in health and education – which lends to healthier and more productive lives – and in turn contributes to faster economic development.

However, this sharp rise is contrasted by a rise in the number of persons considered to be “near poor”.

A total of 661 million people are near poor workers, according to the ILO, meaning they are living between $2 and $4 per day – an increase of 142 million over the past 10 years.

The ILO said many of these near poor persons are not covered by social insurance and “risk slipping back into poverty” should an economic crisis take place.

But, the organisation also noted that working poverty is dropping, with some 397 million workers living in extreme poverty on less than $1.25 per day – a drop of 281 million since 2001.

The ILO revealed that 92 per cent of the workforce is poor or near poor in South Asia while the figure stands at 86 per cent in Sub-Saharan Africa.

Despite a rise in the middle-class in developing countries, global unemployment rose last year and could likely continue to rise this year, the ILO also said in a new report.

A quarter of last year’s increase took place in advanced economies, the ILO said, while the remaining three quarters has “been through spillover into other regions” with “marked effects” in developing economies in East Asia, South Asia, and Sub-Saharan Africa.

Unemployment rose by 4.2 million persons in 2012, creating a 5.9 per cent unemployment rate with more than 197 million people out of work, according to Global Employment Trends 2013.

Unemployment

The ILO said the forecast global economic recovery is not expected to be strong enough to bring down unemployment quickly and the number of

the unemployed is expected to rise to more than 210 million over the next five years.

The world’s job market “remains particularly bleak” for persons aged 15 to 24, with almost 74 million people in that age range unemployed – a 12.6 per cent unemployment rate for that group.

“Of particular concern,” the ILO said, is that “more and more persons in that age group experience long-term unemployment with some 35 per cent of those persons having been out of a job for six months or longer, in advanced economies.”

One consequence of that, the organisation said, is increasing numbers of young people getting discouraged and leaving the market.

Unemployment for persons aged 15 to 24 is expected to drop slightly in developed economies over the next five years but will rise in emerging economies in Eastern Europe, East and South-East Asia, and the Middle East.

Comments

paul_vincent_zecchino 7 years, 12 months ago

Counterintuitive information at its best. Despite the endless klass warfare practiced by some in power who continue to repeat old and false tales of 'increasing poverty', the world's middle class is steadily growing in number and prosperity.

This is the unmentioned factor which is quickly rendering irrelevant both socialism and the aging gasbags who trucculently insist upon inflicting it upon a growing populace of prosperous citizens who neither need nor want it.

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