On the Middle Class
From Wealth Creation for Expanding the Middle Class in the Philippines
A growing middle class shows a stable and sustainable economy. The middle class has higher purchasing power, has higher level of education and skills, and greater social participation. There is also evidence that a growing middle class can lead to more innovation.
Economic growth, structural transformation (shifting employment from sectors such as agriculture to manufacturing or services), education, urbanization, and the expansion of international trade are factors in middle-class expansion. Particularly in the Philippines, it appears that sending someone abroad can help families cross the poverty line to the middle class. There is a growing trend of middle-class families in the country, though COVID-19 may had an impact on this increase.
Although wealth redistribution (such as progressive taxation) can create more middle class, one big driving factor for "growing" the middle class is wealth creation. There are four pathways for creating new wealth for the middle class - (1) promoting social justice in natural resource management and climate change transition, meaning that resources should be shared more equitably, considering that low-income and vulnerable communities are impacted more heavily by the climate change crisis; (2) harnessing new opportunities in trade and investments for MSMEs, or to allow these establishments further access to finance, markets, and technology; (3) ensuring a future-ready workforce and social protection (i.e., human capital development), or to invest in quality education and training for Filipinos; and (4) improving digital governance and public service delivery, or to harness the power of digital platforms and digital financial services to drive economic growth.
As someone who only lived in cities (Davao and Manila), it is such an eye-opener to read these types of articles calling for industrialization and urbanization. One more thing that surprised me is the importance of MSMEs in economic growth, with these businesses even harnessing the power of international trade. I have always looked at MSMEs from the viewpoint of "doing business locally," but it does make sense that their success can not only be limited to the Philippines but worldwide. Lastly, this study boosts my position that there is a further need to reach far-flung areas for internet connectivity. It does not have to reach super-fast speeds, but should certainly be sufficient for consistent communication or, better, allow rural places to build digital markets, even if the subject product is agricultural.