The Squeeze on the Middle
A new OECD report tracking household finances in 40 countries found that middle-income families have seen real purchasing power fall by an average of 12% over the past three years — the largest sustained decline since the 1970s. The findings paint a picture of a global middle class under structural pressure that is reshaping consumption, work, and ambition.
How Families Are Responding
- Cutting discretionary spending: Dining out, holidays, and new clothing have seen the sharpest reductions.
- Secondary income: 38% of surveyed households now have at least one member with a secondary income source, up from 21% three years ago.
- Delaying milestones: Home ownership, marriage, and having children are being pushed back across all age groups under 40.
"The middle class has always been defined by the expectation that life would get materially better. That expectation is now widely doubted, and the social and political implications of that shift are profound," said the OECD's chief economist.
