The Importance of a Middle Class

The Importance of a Middle Class
📌Category: Business, Corporation
📌Words: 1343
📌Pages: 5
📌Published: 21 April 2021

An immense wealth gap is one of the most harmful factors for the stability of a country's economy and society. All countries are divided from the rich to the poor. The gap in between is called the middle class. A substantial middle class is essential as it can be beneficial to the country in many ways. China and India are the two most populous countries in the world. As compared to India, China's larger middle class makes the economy more stable, allows education to flourish, and promotes innovation. 

A large middle class creates a stable economy. The US has the largest middle class globally; thus, it has the most stable economy. A middle class is considered to be a group of people who can satisfy their own primary needs, in addition, to have some savings. "Approximately 50% of China's population is part of the combined lower-upper middle class. While India's lower-upper middle class holds only approximately 6% of its population. 80% of India's population is struggling in poverty." (How Well-off). The middle class constitutes a critical market for most goods and services. A sizable and healthy middle class means there is a significant population that demands goods and services, giving certainty to business investors that they will have a market for their products. India's relatively smaller middle class causes negative factors impacting its country. "The top 10% of the Indian population holds 77% of the total national wealth. " (India: Extreme Inequality) The rich continues to have a concentration of the country's wealth, while the poor are left behind. This causes inequality and animosity between the rich and the poor. A middle class is vital as it can help stabilize the society and economy. Another advantage of a larger middle class means a substantial part of the population has access to an adequate education.

All societies view education as an essential part of a person's life. It gives society knowledge which provides us with the power and tools to build a better life. China's sizable middle class means most of the people have an education, hence creating new opportunities for the future. Chinese education is so diverse now that many students are flocking overseas to study and bring thing their newly acquired knowledge back. "Annual outbound students climbed from about 285,000 in 2010 to over 662,000 in 2018." This is one of the highest in the world. In addition, "tertiary education in China drastically increased from "7.6 percent to 53.8 percent." (How Well-off) Due to the large middle class in China, a significant number of students have the opportunity to have a higher quality education and to study internationally. This means China is educating its middle class faster, therefore further speeding up its development. On the other hand, India's education system is doing poorly.  “Overall, nearly 50% are not in school (70% for girls), and in rural areas this gap can be as high as 80%.  For those who manage to get in, 50% will drop out after the 5th grade.”(Education: A Comparison) Even though a child has a "right" to an education, India's poverty is high, and many children have no choice but to work and earn money instead of going to school. Most children in the urban areas do go to school, while the rural areas experience a shorter and inadequate quality of education. If the wealth in India was more equally distributed, the education would be more equally distributed too. This would benefit the future of the country. Another challenge is India's caste system. Hinduism is one of the principal religions of India. Their religion has a caste system consisting of 5 main categories: Brahmans, Kshatriya, Vaishya, Shudra, and The Untouchables. Higher castes have higher benefits, while lower castes are looked down upon. Dalits are part of the untouchable caste. "Dalits constitute about 16.5% of India's population or 138 million people." Since Dalits are at the bottom of the social group, they have restrictions particularly on "education, civil rights, and ownership of property and businesses." (Thorat) The untouchables have almost no access to education to better themselves. These castes are equivalent to having social classes. "Some jobs, which would not be taken up by the upper caste Hindus, were designated for the Dalits people. There are certain jobs for Dalits, including working at the crematorium or as a morgue attendant..." This was said by Urmi Basu, the founder of "New Light." She runs a non-profit charitable organization that helps untouchable children to find a better future. (The Impact of India) Untouchable children drop out of the educational system because they believe it is pointless as they already have predetermined low-wage jobs. With a college degree, they may still be given an untouchable job in India. China is not restricted by a caste system. As China brings up the next generation of leaders from all economic, social classes, it promotes and creates a more equal opportunity for citizens to help modernize and innovate. 

Innovation is beneficial by contributing to the economic growth of a country. Innovation leads to higher productivity. Productivity means an improvement in the production of goods and services. With a larger middle class, we see China modernize and innovate faster. China developed many successful internet companies that are used by its middle class. An example is a company named Tencent. Tencent offers various Internet-related services and products all over the world. An app called WeChat is part of the Tencent company. "1.17 billion people in the world today (2020) use WeChat." (Iqbal) Another successful company is Alibaba, which specializes in e-commerce, like Amazon and eBay in the US. "The annual active consumers on its online shopping site reached 757 million by the end of June." (Alibaba: Cumulative Active) The active usage on this company platform represents how fast China is developing and modernizing. These numbers give us an idea as to the size of China's middle class. If the majority of society was in poverty, there would not be enough people to create the need for e-commerce or social media. Citizens would not have enough money individually to generate this demand for goods and services, hindering the country’s economy to grow. India has been slower to innovate because of the lack of the middle class. Unlike China, India's technology companies are not as well developed. India's largest e-commerce company Flipkart does not do as well. "E-commerce is still tiny in India. Neither Flipkart nor other e-commerce companies are profitable." as it is used by less people because of the lack of technology available and less consumers spending power in India. "Most of India's 1.25 billion people do not even have access to the internet." (Snap, Flip, and Crackle) India is not as modernized yet. Their lack of a middle-class population means there is less demand and less ability for innovation. 

Although China's economy currently seems to be doing better than India's, China is facing the consequences of a large middle class. While China's middle class continues to grow, so does the demands of the people. "The increased consumption levels of the middle class have contributed to environmental stresses." (How Well-off) More and more people in China are wealthy enough to purchase vehicles, causing higher gasoline consumption and increased emission of carbon dioxide. Not only has it affected the environmental aspect, but it has also led to an increase in health care costs. "Chronic and non-communicable diseases like heart disease and diabetes are on the rise in China, and they are often expensive to treat." (How Well-off) There has been a shift in the middle class's diet. Chinese citizens are suffering from diseases due to a richer diet. Lastly, China has grown its economy and its middle class by surrendering individual's rights to the government. The government may be unfair to a particular group of people or individuals, and they have minimal rights to complain or object. India is the world's largest democracy. Indians have more rights and can vote for their politicians, who can represent them in government. However, the Chinese so far have been willing to surrender some individual rights for the sake of growing their economy faster and improving their quality of life.

As China and India rapidly grows, so must the countries’ middle class. India continues to be constrained by a concentration of wealth within the rich, and a religious caste system that hinders lower-class Indians from social mobility . Compared to India, China has grown the size of its middle class faster, thus allowing its economy to be more stable.  This middle class is educated and continues to demand more opportunities to study globally. With more education, China modernizes and innovates at an even faster pace. China has invested more in its human capital. A country’s strength is its people. 


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