Squeezed middle class is shrinking as wages stagnate

THE middle class is shrinking around the world because of a lack of job security and stagnating wages, a report has warned.

The Organisation for Economic Cooperation (OECD) said middle classes around the world were struggling to maintain their lifestyles amid the rising costs of housing and education. In its report, Under Pressure: The Squeezed Middle Class, the organisation, which represents 36 member countries, found the middle class had shrunk in most countries because it was increasingly difficult for younger generations to achieve the status, defined as earning between 75 per cent and 200 per cent of median national income.

While almost 70 per cent of baby boomers were part of middle-income households in their 20s, only 60 per cent of millennials made up the same demographic today.

The OECD also found that the economic influence of the middle class had dropped sharply. Except in a few places, middle incomes were barely higher than 10 years ago, having risen just 0.3 per cent per year.

“Today the middle class looks increasingly like a boat in rocky waters,” said Angel Gurría, the OECD secretary general, as he launched the report in New York. “Governments must listen to people’s concerns and protect and promote middle-class living standards. This will help drive economic inclusive and sustainable growth and create a more cohesive ... social fabric.”

The research found that the middleincome group in the UK made up 58

per cent of the population, slightly lower than the OECD’S reported average of 61 per cent.

According to the OECD, governments should improve access to highquality public services and improve social protection, as well as ensuring a supply of affordable housing to tackle cost of living issues.

More investment was also needed in vocational education and training.