Millennials are being left out of the world's middle class, research says
Millennials are being squeezed out of the world's middle class as incomes stagnate and costs rise, according to research by the Organization for Economic Co-operation and Development (OECD).
In a report published Wednesday, the 36-nation intergovernmental economic body said younger people were struggling to make it into that bracket, while those who were already included were finding it difficult to maintain their position. It said it was due to deteriorating income growth coupled with increasing costs of housing and education.
According to the report, 60% of millennials across the 40 countries surveyed were categorized as middle income. In contrast, 68% of "baby boomers" — those born between 1942 and 1964 — were middle class.
Breaking it down further, only 53% of millennials in the U.S. were middle class, the data showed. Just 59% of British millennials made it in, compared to 69% in Japan and 66% in Australia.
The report said middle incomes rose by just 0.3% per year over the past decade, but noted that housing is now the single largest spending item for middle-income households, taking up around one-third of disposable income — which is up 25% since the 1990s.
The OECD defined middle class as those who earned between 75% and 200% of the median national income. Across the 40 countries included in its study, 61% of the population qualified as middle class.
Under the OECD's definition, 51% of the U.S. population fell into the middle class category — putting it behind most other OECD members. China, meanwhile, had a middle class rate of 48%.
"Today the middle class looks increasingly like a boat in rocky waters," said OECD Secretary General Angel Gurria. "Governments must listen to people's concerns and protect and promote middle class living standards. This will help drive inclusive and sustainable growth and create a more cohesive and stable social fabric."