Manchester University
Oak Leaves

October 6, 2018

Global Economy, Relative Poverty: What’s Their Connection?

Matthew Barbosa


When discussing the shrinking middle class in America in the context of wealth distribution, it’s interesting to bring up the overall growth of the global economy at the cost of a minority of the American middle class, and additionally what it means to be poor in America relative to these places, such as South, Southeast Asia, China and India, where the middle class is expanding. Recently the middle class has become as prevalent as those in poverty. What does that being global middle class really mean in the context of American standards?

The statistics recently published by Brookings Institute states that there are as many people in poverty as there are in the middle-class. They define a bracket of $11-$110 a day per person as middle class, meaning anywhere from $4k-$40k puts a person into this category. Working a minimum wage job, $7.25 per hour in America, 40 hours a week puts the person at $41.43 a day. This is just under the median of the bracket, $49.50 per day or $17,820, and most of these countries with expanding middle class are on the lower end of this bracket. This has also just been considering half the population that is out of poverty, but the other half are still in poverty so would be worse off than those out of it. Meaning even the Americans with the worst amount of earning potential have the ability to live much better lives than at least 75% of the planet, and that is an estimate with being generous in number of people below $41 a day in the middle class bracket.

We have a lot more than most people around the world, but are grateful for a lot less than those with nearly nothing relative to our standards. Additionally Americans are more upset with the 1% of wealthiest Americans, even though these people are willing to expand industry outside of America to raise up other states, because it appears on paper that they have way more than they should relative to the American middle class.

What about those who have nearly nothing compared to the American middle class, say those under the extreme poverty line, $1.25 a day, about 23% of the world. Where does the line get drawn for that 23% to decide when the global 1%, people living with $88 per day, have too much and need to share with the other 99%?

When does it become morally okay to distribute wealth justly? When most people would agree that people that are earning $88 per day, or $32.5k, are working honestly and hard for their money. Where exactly does the line get drawn over $32.5k a year that shows this person no longer worked hard and honestly for their money and should have it taken and given to those who do not even have the opportunity to make honest and hard-earned money?

It seems to be that the trend of leaving these American 1% alone to expand global industry is positively impacted the global population at a more rapid rate than ever in history. Even if Americans try to implement policy to restrict the global economy engineers, they will likely just take their money elsewhere to bring up a different state’s local class and economy.

Exercise extreme caution and scrutiny when suggesting that those rich beyond practical purpose deserve to be knocked down further to benefit a small amount of the global population, which for a long time was the dragon hoarding the wealth of the world. A change of scale and perspective serves to benefit everyone.