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Under Pressure: The Squeezed Middle Class

image of Under Pressure: The Squeezed Middle Class

Middle-class households feel left behind and have questioned the benefits of economic globalisation. In many OECD countries, middle incomes have grown less than the average and in some they have not grown at all. Technology has automated several middle-skilled jobs that used to be carried out by middle-class workers a few decades ago. The costs of some goods and services such as housing, which are essential for a middle-class lifestyle, have risen faster than earnings and overall inflation. Faced with this, middle classes have reduced their ability to save and in some cases have fallen into debt. This report sheds light on the multiple pressures on the middle class. It analyses the trends of middle-income households through dimensions such as labour occupation, consumption, wealth and debt, as well as perceptions and social attitudes. It also discusses policy initiatives to address the concerns raised by the middle class, by protecting middle-class living standards and financial security in the face of economic challenges.

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Policies for a prosperous middle class

This chapter presents policies that could address the main challenges with which middle-income households contend. Because middle-income households are so diverse, the proposed policy solutions often focus on certain subgroups, such as families who struggle to make ends meet, parents who are concerned about how to pay for their children’s education, and middle-aged workers exposed to globalisation and technological change. Section  looks at policies for boosting middle-class disposable incomes and supporting wealth accumulation. Section  discusses policies that could help middle-income households cope with the rising costs of housing, education and health and long-term care. Section  proposes ways to help equip middle-class workers with the skills they need to succeed in a changing workplace, with special emphasis on vocational education and training and adult learning.

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