Homi Kharas is a senior fellow at the Center for Sustainable Development, housed in the Global Economy and Development Program at Brookings Institution; there, he studies policies and trends influencing developing countries, the emergence of the middle class, and global governance and the G20.
Kharas is lecturing at 10:45 a.m. today in the Amphitheater for the Chautauqua Lecture Series theme focused on “Eight Billion and Counting: The Future of Humankind in a Crowded World.” There, he’ll discuss his book The Rise of the Global Middle Class: How the Search for the Good Life Can Change the World.
Kharas’ book traces the history of the middle class to determine whether a growing global middle class is good for growth, prosperity, stability and happiness. Overall, he believes, “we have done very well with giving opportunities for now the majority of people in the world — a bit over 4 billion people — to have a reasonable degree of prosperity.”
However, there are many different definitions of who belongs to the global middle class. Pew Research Center, for instance, defines it as earning an income between two-thirds and twice the national median income; Kharas’ definition is different from the so-called relative definition by Pew.
“What I would call a middle class — which is an absolute living — is based on the ability to maintain an absolute living standard, regardless of where you are, adjusted for cost of living differences,” Kharas said.
Existential issues do loom over people’s livelihoods, and the economy as a whole — inequality, climate change, and technological advances all impact the global middle class, which Kharas argues has been a cornerstone of economic policy for the last 200 years.
“Despite all of these challenges, historically the middle class faced such different kinds of challenges before, but has always adapted,” Kharas said.
“It looks as if it’s in the process of adapting again and with the power of 4 billion people in the middle class, the chances of bringing together global collective action on some of these big issues — greenhouse gas emissions, pollution, species extinction — are far higher.”
The political influence held by the middle class varies country to country, Kharas said, but no matter where, “it is the middle class that basically dominates political discourse and middle class issues are given a great deal of attention by policymakers.”
There are big, systemic changes required when it comes to things like renewable energy and decarbonization, conservation, and how people deal with something as simple as the sheer amount of physical materials we use every day.
The richest 10% of U.S. households are responsible for 40% of the country’s greenhouse gas emissions, according to a study in PLOS Climate. This displays the stark disparity between those who benefit from fossil fuels, versus those most seriously — and detrimentally — impacted. Technology is driving growth and creating more prosperity, so while that “might be creating more inequality, … it’s not as if people are getting less; some people are getting much, much more, while others are just getting more.”
“It’s the prosperity that ultimately is responsible for these issues of carbon emissions, of pollution and dealing with waste, disposal, recycling, etc.,” Kharas said.
The good news is that business models are changing. For instance, Kharas shops at Warby Parker; for every pair of spectacles purchased, they promise to donate a pair of spectacles to somebody in need, and other businesses have similar practices.
“It appeals to my what you might call a sense of social consciousness,” Kharas said. “What we’re starting to see amongst the middle class, at least in the U.S., is that, because we are now sufficiently prosperous, we have the ability to integrate those values into our economic decisions — whereas a generation ago my parents wouldn’t have been thinking along those lines.”
As people leave his lecture, or read his book, Kharas’ hope is that they understand their collective power, and how to leverage it.
“The middle class is rising in every country in the world. It’s the one thing that actually unites all countries in the world. If we can have a unified middle class movement, we can get collective action on many global problems in a way that, if you just had intergovernmental negotiations, would be absolutely impossible,” he said. “I mean, look at the state of the world. These governments hardly talk to each other, but they talk a lot to their own middle class, and if the middle class pushes for the same things in every country, then we can make progress.”
