A study citing data from the World Bank published Friday showed that the world's middle class has shrunk for the first time in decades in 2020 because of the coronavirus pandemic.
According to the report, nearly two-thirds of households in developing countries had experienced a loss in income last year.
Researchers at the non-partisan Pew Research Center said that the middle class fell by around 90 million people to only around 2.5 billion people last year. Middle-class households were categorized as those earning between $10 and $50 per day.
The drop in the global middle class bloated the ranks of those categorized as poor households and individuals, those that earn less than $2 per day, by 131 million. The study said that data on the number of middle-class earners were understated as an estimated 62 million people categorized as high-income had dropped into the middle-class category.
The study's author, Rakesh Kochhar, said that not included the high-income people that suffered a loss in income, the number of the global middle class that dropped into the poor category topped more than 150 million last year.
"In modern history, it is hard to come up with examples where you saw such a sharp downturn in global economic growth," Kochhar said.
If the number indicated in the study is accurate, it would mark the end of a global trend that has seen the continued rise of the global middle class since the 1990s. Over the past two decades, the number of middle-class households and individuals has increased without fail thanks to the rapid growth of developing economies such as India and China.
In 2011, Pew Research estimated that the global middle class made up around 13% of the world's population. By 2019, the middle class grew to nearly 18%. Pew Research said that an average of 50 million worldwide has joined the middle-class ranks each year over the last 10 years.
A separate study by researchers at the World Bank published earlier in the week showed that around 36% of households had seen job losses or a loss in income last year. The study said that it was the first increase in global poverty recorded since the Asian financial crisis in 1998.
