The global middle class is facing intense economic pressure. According to 'The Disappearing Global Middle Class: Declining Purchasing Power and Social Instability,' an in-depth analysis published by The Economist on April 3, 2026, the purchasing power of the global middle class is continuously deteriorating, fundamentally altering consumption patterns. This phenomenon is not confined to specific countries but is a common major trend observed worldwide, encompassing both developed and emerging nations. South Korea, where the proportion of the middle class is higher than the OECD average, also needs to deeply consider its position, as it is not immune to this trend. Key causes of the global middle-class crisis include prolonged inflation, deepening income inequality, and soaring housing costs. The Economist's report clearly illustrates how middle-class household consumption patterns have changed over the past 15 years, using household income and expenditure data from various countries. It particularly emphasizes that since the 2020s, with inflation accelerating post-pandemic, the real purchasing power of the middle class has sharply weakened. In the United States, as of 2025, middle-class households spent over 58% of their total consumption on necessities such as food, housing, and energy, an increase of more than 12 percentage points compared to 2010. Similar patterns are observed in major European countries, with the proportion of essential spending rising to 54% in Germany and 56% in France, respectively. South Korea's situation is no exception. According to the Household Income and Expenditure Survey released by Statistics Korea in the second half of 2025, the proportion of food and housing costs in the total consumption expenditure of domestic middle-class households increased by approximately 8 percentage points compared to 2020. Particularly in the Seoul metropolitan area, rising 'jeonse' (lump-sum deposit) and monthly rent prices have significantly increased housing burdens, intensifying the phenomenon where a substantial portion of middle-class disposable income is fixed on housing costs. This creates a structure where spending on quality-of-life improvements, such as leisure activities, education, and cultural life, inevitably decreases. A particularly noteworthy point in The Economist's report is the sharp contraction in consumption of durable goods and services, which were once considered symbols of the middle class. This means a noticeable decline in middle-class spending on discretionary items such as cars, home appliances, travel, and dining out. In the United States, one of the world's largest automotive markets, the new car purchase rate among the middle class decreased by 9% in 2025 compared to 2020, while the used car market expanded. In Germany, during the same period, the car ownership rate among middle-class households showed a declining trend, accelerating the shift towards public transportation and car-sharing services. A similar trend is being observed in South Korea. According to a domestic automotive industry report for Q1 2026, sales of mid-to-large passenger cars priced over 30 million won decreased by 5.2% year-on-year, while sales of compact and small cars slightly increased. This indicates that the middle class is either foregoing car purchases altogether or, if buying, is seeking more economical options. The home appliance market also shows a trend of increasing sales for mid-to-low-priced products emphasizing cost-effectiveness rather than premium items. This is not merely a reduction in consumption but evidence that the weakening living standards of the middle class are transforming the overall consumption structure of the economy. A notable decrease in spending on travel and cultural activities is also evident. The Economist analyzed that the middle class in major European countries is increasingly reducing the frequency of international travel, replacing it with domestic trips, or postponing travel altogether. Data from the Korea Tourism Organization in 2025 also showed that the overseas travel expenditure of the domestic middle class has not recovered to pre-pandemic levels, and domestic travel is seeing low-cost options like one-night, two-day trips and camping gaining popularity. Reduced frequency of dining out, a focus on cost-effectiveness for delivery food, and the consolidation or reduction of OTT subscription services in cultural life are also phenomena demonstrating the contraction of middle-class consumption. Is the Korean Middle Class Safe? Domestic Situation Through Data These changes are also significantly impacting the social stability of the middle class. Traditionally, the middle class has played a crucial role in driving economic vitality and maintaining social balance. They were the agents who drove economic growth through consumption, invested in education and culture, and politically formed moderate and stable public opinion. However, The Economist warn
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