the middle class will see rising prices from increasing competition for resources
According to the US National Intelligence Council’s Global Trends 2030 (2012), major shifts in the underlying trends and relative share of global wealth generation will emerge over the coming decade and beyond, if the economists’ models are to be believed. This is because average increase in the share of global GDP, per decade for China 2000–2020, and for India 2010–2030 are both projected in excess of 5 percent. The net result is that the EU and US share of middle-class consumption, a conventional indicator of general well-being, is projected to shrink dramatically over the coming ten years and more. Put another way, middle class consumers in Europe and North America will see rising prices from increasing competition for resources.
Projected percentage share of global middle-class consumption, 2000-2050 In addition to the changes in percentage share by country, by 2030 the majority of people in most countries will be middle-class, not poor as has been the case throughout previous history—assuming the underlying assumptions are correct. Source: NIC (2012)
the projections portray what may happen … not what will happen, to help society reflect and react
There are two factors that may change this squeeze. First, resources required to fuel this change in middle class consumption, including substitutions and innovations, may become effectively unlimited because resource use and environmental impact have been decoupled from GDP growth. So the projections are not necessarily correct – they portray what may happen if current trends are correctly captured and continue, not what will happen. The trends serve to help society reflect and react.
Worldwide, there is currently a squeeze on middle class incomes and jobs, partly as a result of technological innovations, and partly as a result of the dramatically increasing redistribution of wealth to the wealthy. This may change, but if it doesn’t, it is not clear where the sales that makes money for the wealthy, and which creates service jobs for lower incomes, will come from. Many would say that we should find a better future for society in any case.
a squeeze on middle class incomes and jobs, partly as a result of technological innovations, and partly as a result of the dramatically increasing redistribution of wealth to the wealthy
If the assumption of growing global middle class consumption is correct however, and if substitutions and innovations do not markedly change resource use, what are the implications? The basic indicators of resource availability and the factors that will affect these include water, food, energy, other physical resources, health, skill sets and wealth.
Source: Trends to Bend, modus vivendi, 2014, MMG/SNJ