By Nancy Birdsall
It’s time to stop labeling millions of people in the developing world who have escaped $2 day poverty as “middle class”. The Asian Development Bank does it, and the African Development Bank does it. Abhijit Banerjee and Esther Duflo did it here and Martin Ravallion here.
People do not jump to a middle class way of life at $2.01 a day. The $2 a day international “line” of moderate poverty matters only in the abstract, not in the lives of people like Muljoko in Indonesia living on $7 a day or Mohamed Bouazizi in Tunisia on about $5 day when he immolated himself in late 2010, setting off the Arab Spring. People living on $3 a day, median income in the developing world, and even Muljoko at $7 a day, are not enjoying the economic security we associate with “middle class” in advanced economies.
Nancy Birdsall is the Center for Global Development’s founding president. Her most recent publications include Cash on Delivery: A New Approach to Foreign Aid and New Ideas on Development after the Financial Crisis, co-edited with Francis Fukuyama.