Economic Inequality And The ‘Middle Class’

Inequality is increasing, seventy percent of the country’s wealth is in the hands of one percent of the country’s super rich – the words have become quite familiar. 

It seems as if the super rich are on one side, the poor working class, intellectual middle class on the other. 

The highly educated, articulate middle class is the most active in shaping public opinion. Their influence on politics and administration is enough. 

Why is inequality increasing despite their active participation?

A clue to this can be found by looking at the actual picture of income distribution. Its estimates come mainly from two sources, official (Periodic Labor Force Survey) and private (Consumer Pyramid Household Survey, conducted by CMIE). 

If the income from the two surveys is divided into 10 equal classes, each class will contain ten percent of the population. 

The sample for the government survey was smaller, forty-one thousand in each class, compared to seventy thousand for the private survey.

Government data shows that the average monthly per capita income of the first or lowest class was Rs 921 in 2021-22. 

The number of members in the family is four and a half, and the average monthly income of the family stands at Rs 4144 if the calculation is done at the market rate of 2022. 

And the highest, means the average income of a class 10 person is Rs 17,607 , the average family income is Rs 79,231 . Means, the income difference is nineteen times!

The word ‘middle class’ means someone who is in the middle in terms of wealth. In terms of income, they will be fifth class people. 

In 2021-22, the monthly average per capita income of this class was Rs 3,000, and the average family income was Rs 13,502. 

The middle class who have a TV-fridge in their house, many of them may have AC, cars too, those who teach their children in private schools and colleges, get treatment in private hospitals, they are not really ‘middle class’ from the point of view of economy. Their maids are rather middle class.

The figure of inequality is noteworthy for another reason. In terms of average monthly per capita income, from first to sixth, the mutual difference between each category is more or less only 500 rupees. 

The difference between sixth and eighth class is more or less Rs 1200 , between eighth and ninth class is Rs 2100 . But only the difference between the ninth and tenth class is ten thousand rupees! Income inequality between these two classes is two and a half times. 

It can also be seen that the difference between the lowest or the first square and the ninth square is eight times. 

But the difference between the first class and the tenth class is nineteen times. That is, the 10th square alone is creating a huge gap in inequality.

Private surveys show even greater disparity—income inequality between the lowest and highest classes is twenty-two times instead of nineteen. 

At that place the distance between the lowest square and the ninth square is ten times. That is, even in this case, only the tenth square is increasing the amount of inequality. 

In this study, the monthly average per capita income of class five is Rs 4,602 and the average family income is Rs 20,829 (2021-22). 

Notably, the per capita and household income in each category is higher in the private survey than in the government survey due to differences in the structure and methodology of the survey questions.

But both surveys show that the top class consists of government workers, teachers, doctors, lawyers, businessmen, and other groups, i.e. most highly educated and professional people. 

Those who consider themselves middle class, in terms of income, the majority of them are the ‘elite’ of the country.

That is, the so-called middle class, not the ‘billionaires’, is the epitome of inequality. Because their gap with the poor, working class people does not come to the fore. 

Even in the seventies and eighties, the middle class protested for radical changes in law and administration to create solidarity of interests with the poor and lower classes. 

Now when the question of inequality is raised, they are the ones who point the finger at the billionaire.

There are several reasons for this widening gap between the middle class and the poor. 

Privatization in education over the past thirty years has resulted in inequality in education becoming inequality in earnings. 

The picture is also the same in employment – 40% of the workers are employed in small production enterprises, and 30% of the workers are employed in large enterprises. Employment is lowest in medium enterprises. Employment inequality has also become income inequality.

The role of the government is not less. When government workers stay in cities, they forget that the disparity between urban rich and urban poor is greater than rural inequality. 

However, they complain that the government gives charity to the poor with their tax money. They advocated reducing income tax. By comparing the one percent with the ninety-nine percent in public discourse, the real inequality is thus obscured.

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