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Middle class: Who are they?
Think tanks across the world have made several attempts to define the Indian middle class over the last couple of years, but do these new definitions capture the reality? Economists are finding that it's not just the statistics that make the Indian middle class;it's also more complex philosophical questions.
A clear statistical definition of the Indian middle class has long been elusive. Part of the problem is that the middle segment of India's income range is still poor by global standards. By standard international definitions - consumption expenditure of more than $10 per day - India would have no middle class, because everyone spending that much is in the top 5% here. The World Bank's latest flagship report on poverty in Latin American countries defines the middle class in a $10- $50 range, by which definition India's "middle class" would be located in the top 10 per cent of the country.
In their 2007 paper on the middle class, MIT economists Abhijit Banerjee and Esther Duflo looked at people in the $2- $4 range and those in the $6- $10 range, a definition that Banerjee describes as "ad hoc". "We came up with those two alternative definitions because they were respectively just above the more or less accepted definition of the poor and as high as we could go without basically running out of people in surveys of poor countries. There is nothing intrinsically middle class about those categories - they were just people in the middle, " Banerjee explained in an email.
At a conference in Delhi two weeks ago, economist Nancy Birdsall, who is the founding president of the Washington-based Centre for Global Development, proposed a $4- $10 range for a class she described as the "catalyzing class" : non-poor and not-quite middle class. In India, 150 million people, or 12 per cent of the population, are in this class, which Birdsall projects, will rise to 30 per cent by 2020 and 44 per cent by 2030.
"We chose $10 based on research in Latin America showing that only at that figure does the likelihood of a household falling back into poverty over five years fall below 10 per cent. $10 represents a level of material security. It is also in Latin America the income at which on average households identify themselves as middle class, " Birdsall explained in an email. The $4 lower limit came from the fact that this is the national poverty line in many developing countries, especially in Latin America.
While these numbers identify a class firmly in the middle of the income distribution of a country like Brazil, the $4- $10 range is still among the top 30% of Indians. "In India you could argue that the right thresholds are a little lower, " admits Birdsall. But she adds that "$4- $10 is not unreasonable".
Much the same as the unseemly wrangling over the definition of poverty in India, some experts feel that we need to move away from numerical definitions altogether. "I think we must move away from these $4- $10 per day definitions to think about middle class lifestyles, " Sonalde Desai, professor of sociology at the University of Maryland and senior fellow at the National Council of Applied Economic Research, said in an email. "I once asked a farmer about his definition of middle class, " says Desai. "In his opinion, anyone who is able to wear pristine white clothes belongs to the middle class. Such a minor desire and yet all one has to do is to look around us to see how many Indians find it difficult to wash the grime off their shirts and saris. Let us focus on some commonsense definitions of middle class. "
This is where the numbers hit a philosophical wall. In political science theory, the middle class is that which is no longer economically vulnerable, has aspirations for a better future and desires order and stability. So are the people whom the numbers claim as middle class, really middle class in their values?
"I don't think that a desire for social and political stability is the sole prerogative of the middle class. If I had to characterize middle class values, I would focus on a mindset in which individuals are optimistic about social and economic upward mobility for their children but do not take it for granted, " says Desai.
"Historically, in classic sociological literature, the middle class is seen as being defined by occupational characteristics with white collar workers and small business owners forming its bulk. So far, the Indian formal sector has been so small that we have had to focus on other markers like income and education to define middle class. But as economic transformation continues and service sector employment grows, I think we are going to start thinking about definitions and values that are associated with formal sector white collar workers - those sociologist John Goldthorpe calls the "salariat", " Desai says.
Banerjee and Duflo found that one of the defining features of the middle class in the 13 countries including India that they looked at was a high likelihood of a steady job. While their middle class were highly likely to be petty entrepreneurs, these enterprises were at a very small scale, and the "entrepreneur" was largely only running his "business" in lieu of a more secure salaried job - decidedly not the well-off business-owner that a conventional middle class person is associated with.
Their middle class was also likely to have fewer children and spend more on the education and health of their children. But Banerjee is unwilling to attribute values to the middle class, whose attitudes were not properly polled.
Indeed it would appear that the "traditional" middle class desire for stability is more closely associated with India's rich. Birdsall calls her not-poor but notyet middle class the "catalyzing class" precisely because it is a volatile class that is too vulnerable yet to be able to sink into middle class calm.
"This rising vulnerable class has the incentives to demand a level playing field, end of corruption etc since without political connections and deep pockets they are losers, not winners in the system, " says Birdsall, illustrating her point with the example of the Tunisian fruitseller Mohamed Bouazizi whose immolation in protest against a bribe lit the spark for the Arab Spring. "They can become the allies of the traditional middle class in supporting good government. But if frustrated, they can be a source of political instability who at worst resort to self-defeating populism, " says Birdsall.
The statistical tug-of-war over the middle class might just be the one playing out at Jantar Mantar.
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