Updated Oct 13, 2018

The big picture: Half the world is now middle class

A middle-class American brick home in Kentucky. Photo: Education Images/UIG via Getty Images

Last month marked a global tipping point. For the first time in the 10,000 years of human civilization, more than half the world's population — some 3.8 billion people — are middle class, according to a report by the Brookings Institution.

Why it matters: Since the agricultural age led humans to organize into society, we have struggled. Through the early 19th century, civilization as a whole was essentially hand to mouth. Beginning with the Industrial Age, though, living standards began to improve. As of now, the number of poor people is down to 630 million people — 8% of the world population, say Brookings' Homi Kharas and Kristofer Hamel.

  • "About the same number of people are living in households that are poor or vulnerable to poverty."
  • "For the first time since agriculture-based civilization began 10,000 years ago, the majority of humankind is no longer poor or vulnerable to falling into poverty."
  • 1 person every second escapes extreme poverty
  • 5 people every second enter the middle class
  • 1 person every 2 seconds becomes rich

How they calculated: Kharas and Hamel's basic definition of middle class is the availability of discretionary income — whether people have money above and beyond their absolute necessities.

Reality check: Half the global population is still poor or vulnerable to falling into poverty, Hamel and Kharas say.

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