What is the future of the middle class?

Oct 13, 2016

Branko Milanovic’s “elephant in the income distribution room” Data taken from “Get Ready to See This Globalization ‘Elephant Chart’ Over and Over Again”, Bloomberg, 27 June 2016.

Mr. Branko Milanovic, one of the leading global specialists on income inequality held a lecture Globalization, migration, and the future of the middle classes at the Faculty for Economics, Finance and Administration in Belgrade. This lecture is a part of the global Kapuscinski Development Lectures format and is jointly organized by European Commission, United Nations Development, Faculty for Economics, Finance and Administration in Belgrade and Center for Social Policy.

Mr. Branko Milanovic talked both about the changes in income distribution at a global level and the consequences of these changes. Due to globalization, inequality has become a global issue rather than a problem of an individual country. Rise in migrations is one of the most important consequences of inequality in income distribution, and Mr. Milanovic anticipates that this trend will only become more prominent in the future. Mr. Milanovic emphasized that there are two solutions that could prevent the causes of large migrations – either incomes of the poor must go up in their native countries or they will be moving to the wealthier countries at a higher pace.       

Mr. Milanovic explained the graph “elephant in the income distribution room” where the middle classes sits at the bottom of the elephant’s trunk which suggest that it was the middle class in developed countries who missed out on the global economic growth during the two decades leading up to the global financial crisis of 2008. It does not mean that incomes within developing countries became more equally distributed between 1988-2008 but he suggests that the middle class is not making progress as other classes when we look at where they are today compared to where they were 20 years ago.

Mr. Milanovic has published a number of articles and books on the methodology and empirics of global income distribution and the effects of globalization. His new book, Global Inequality: A New Approach for the Age of Globalization (2016), addresses economic and political issues of globalization, including the redefinition of the “Kuznets cycles.”

Kapuscinski lectures were named for Ryszard Kapuscinski, a Polish reporter and writer who covered developing countries. It is organized jointly by the European Commission, the United Nations Development Programme, partner universities and development think tanks. More than 80 lectures in 2009-­‐2016 gathered over 25,000 participants.

More:http://kapuscinskilectures.eu

 

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