Middle Class
Overview
The middle class (Korean: 중산층; 中産層) refers to the group situated between the upper and lower strata in a society's class structure. It is defined by a combination of factors: not only economic indicators such as income and assets, but also job stability, education level, housing type, and consumption and cultural lifestyle. Because the middle class provides stable consumption and tax revenue, political moderation, and the driving force of social mobility, it has been regarded as the "waist" of modern society and the foundation of democracy and the market economy. At the same time, its boundaries are ambiguous and its size varies greatly depending on the measurement method, and recently the "collapse of the middle class" or the "polarization of the middle stratum" has become a global topic of discussion.
Key Content
Definition and Measurement Methods
Approaches to defining the middle class fall broadly into three categories. The first is the income criterion. This approach treats households falling within 50–150% (or 75–200%) of median income as middle class, and is the one most typically used by the OECD. The second is the self-perception criterion. This is the concept of the "subjective middle class," in which people consider themselves middle class even when their objective income is low; in Korea and elsewhere, a wide gap appears between objective statistics and self-perception. The third is the occupation, education, and cultural capital criterion. This sociological approach takes as its key markers employment in professional or white-collar occupations, a college degree or higher, stable employment, and home ownership. In addition, the use of assets (housing and financial assets) as a criterion is increasingly common, because as asset gaps widen even among those with similar incomes, the separation of the "income middle class" from the "asset middle class" has become pronounced.
Historical Formation
The middle class in the modern sense originates with the bourgeoisie that emerged alongside the Industrial Revolution. Subsequently, in the 20th century, as the system of mass production and mass consumption took hold and public education expanded and social insurance systems were put in place, the "new middle class" composed of managerial, professional, and technical workers grew rapidly. After World War II, in the West, Japan, Korea, and elsewhere from the 1950s to the 1970s, high growth combined with improved income distribution made the middle class the thickest it had ever been in history. The middle class of this period shared a "triangular structure" consisting of regular employment, home ownership, and upward intergenerational mobility through children's education.
Economic Role
The middle class performs three functions in the macroeconomy. First, it is the mainstay of consumption. Because it spends most of its income on consumption, it underpins domestic demand and employment in the service sector. Second, it is the base of tax revenue. As the main payer of income and consumption taxes, it supplies the financial resources for welfare. Third, it is the agent of human capital investment. Through investment in education, health, and housing, it raises the productivity of the next generation. For this reason, societies with a thick middle class are judged to have greater stability of growth and predictability of policy.
Differentiation within the Class
The middle class is not a single group. It is usually divided into the upper middle class (professionals and high-income white-collar workers, able to accumulate assets), the middle middle class (stable wage earners), and the lower middle class (precarious employment and small self-employment, at risk of "falling out of the middle class"). The core of recent discussion is that the gap between the upper and lower middle classes has widened and the risk of "downward mobility"—the lower middle class sliding into poverty—has grown. Rising asset prices benefit asset holders, but for the asset-less middle class they act as a barrier to entry, widening gaps between generations and between classes.
The Middle Class in Korea
In Korea, the middle class expanded rapidly through the 1980s and 1990s, and the discourse of a "70% middle class" was an expression of social confidence. However, after the 1997 foreign exchange crisis, the spread of non-regular employment, the 2008 financial crisis, and the COVID-19 pandemic deepened income polarization and asset gaps. In particular, as the burden of housing costs and private education expenses grew, the "cost of reproducing the middle class" soared, and among the younger generation the perception spread that entering the middle class itself—through a stable job and home ownership—had become difficult. By the statistics, the share of the middle class on the income criterion remains at a certain level, but the gap with subjective middle-class self-identification, which is lower, persists.
Latest Trends
Middle-class discourse in 2024–2025 can be summarized in the following four trends. First, stagnant real income and the inflation shock. As the inflation accumulated since the pandemic combined with high interest rates, the perception spread that even as nominal income rose, the felt standard of living did not improve. Second, asset-centered class realignment. As fluctuations in the prices of assets such as real estate and stocks came to determine class status, the group characterized by the mismatch of "middle-class income, lower-class assets" grew. Third, job insecurity driven by AI and automation. As some tasks in clerical, managerial, and professional work became automated, the stability of traditional middle-class jobs was shaken, and the ability to retrain and switch jobs emerged as a key variable in maintaining class status. Fourth, policy re-examination. In many countries, policies touting relief of the middle class's tax burden, housing stability, and reduction of care and education costs are being proposed competitively, and attempts continue to redefine the middle class as "the link between growth and welfare." In short, the middle class is no longer a group that reproduces itself automatically; it is becoming a status that must be continuously maintained and attained through the interaction of policy, the labor market, and asset markets.
Related Topics
- [[Income Inequality]]
- [[Class Mobility]]
- [[Polarization]]
- [[Median Income]]
- [[Welfare State]]
- [[Housing Costs]]