12/10/2023 0 Comments Black upper middle class![]() There are also clear reasons for analysing households who are relatively affluent: this group provides an important base of education and skills, promotes entrepreneurship and investment and is an important source of consumer demand (Kharas and Gertz, 2010 Birdsall, 2010). Such divergence reflects the extent to which the standards of living of developed countries are applied to developing countries – or the extent to which researchers grasp the reality of poverty and incomes in developing countries. For example, Banerjee and Duflo (2008) define the middle class in a sample of developing economies as households who earn from US $2 – $13 per person per day, whereas Wilson and Dragusanu (2008) use an interval of US $16 – $82 per person per day. The boundary lines for what constitutes affluence vary greatly in the literature. Secondly, changes in the middle income interval would help to assess whether growth has benefited the ‘average South African’ in post-1994 South Africa.Ī second common way in which to define the middle class is to choose an interval of per capita household income that indicates some conception of relative affluence (often associated with certain patterns of expenditure and possessions). First, evidence suggests that the relative growth of the share of total income of those in the actual middle of the income distribution leads to greater political stability, to a citizenry with higher levels of human development (including better education and health) and even to higher levels of economic growth (Perotti, 1996 Easterly, 2001, 2007). There are several reasons why the middle group of households is of interest. Because of differences in the size of households and the number of mouths to feed, household income usually is divided by household size to calculate per person – or per capita – household income. One option is to define the middle class as households which fall within a specified income interval, defined around the middle (or median ) household income (see the South African example below). ![]() ![]() This approach is popular when the middle class of more advanced countries is analysed. These households represent the ‘average’ household in terms of income. The first is a statistical approach which selects households that fall in the ‘actual middle’ of the spread of household incomes in a country. However, two common approaches serve as a starting point. This is because any definition of the middle class is subjective and value-laden. There are various economic approaches to defining and measuring the middle class. Is such an affluence-based conceptualisation of the middle class sensible – or relevant to policy making – in South Africa? How should we best define the middle class in an economy characterised by large inequalities in income? Who really are in the ‘middle’ and what does it mean for economic policy? Defining the middle class One such example is the well-known study of Black Diamonds by the UCT Unilever Institute of Strategic Marketing, which describes the emergence of the black middle class – which includes the top-earning black people – in post-Apartheid South Africa. ![]() In many discussions the middle class is synonymous with both the affluent and the very affluent. Households who have achieved a modest standard of living are actually near the top of the country’s income ladder. In South Africa, thinking about what it means to be middle class is complicated by the low average and median levels of incomes in the country and the very wide distribution of income. as well as assets such as housing – but, at the same time, this term refers to people who are not considered rich or upper class in some sense. The everyday use of the term middle class conjures up images of families (or individuals) with a certain lifestyle or level of affluence as evidenced by their expenditure on food, clothing, furniture, cars, education, holidays, etc. This necessitates great care in using these conceptions, especially in policy design. Defining the middle class on the basis of the ‘actual middle’ versus ‘relative affluence’ provides vastly different pictures. But how should the middle class be defined, particularly in a country with high levels of inequality? Individuals and households which fall in the actual middle of the income distribution in South Africa have a standard of living well below a ‘middle-class lifestyle’. Justin Visagie, 29 April 2013 The middle class is a hot topic in media and policy circles.
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