How was it divided?, Expert: Calculated as a middle-income group with a monthly income of 3000 yuan | Income | Population

On June 19th, Red Star Capital Bureau reported that according to the latest calculation by experts, a monthly income of around 3000 yuan can basically meet the standards of middle-income groups.

Subsequently, the topic sparked widespread discussion. Many netizens believe that this standard is too low and there is a significant difference in physical perception.

On June 19th, the Red Star Capital Bureau found after reviewing the "2022 National Economic and Social Development Statistical Bulletin" that the National Bureau of Statistics divided the national resident income into five equal groups, while last year the per capita disposable monthly income of the middle income group was about 2550 yuan.

Is "middle-income group" and "middle-income group" the same concept? How is China divided into middle-income groups?

Last year, the per capita disposable monthly income of the middle income group was 2550 yuan

Recently, Li Shi, a senior professor and director of the Institute of Sharing and Development at Zhejiang University, stated in an interview, "By absolute standards, according to our measurements, the size of our middle-income group in 2022 is approximately 460 million people. On average, with an income of around 3000 yuan per month, one person can basically meet the standards of a middle-income group."

But at the same time, Li Shi also explained, "The standard for middle-income groups only considers income. Within this group, some people may have a comfortable life with high income; some may have just crossed the threshold of this standard, and life is still very difficult, completely possible. Even in developed countries, the vast majority of people do not consider themselves to be middle-income groups."

Can one be called a middle-income group with a monthly income of 3000 yuan?

On June 19th, Red Star Capital Bureau reviewed the "2022 National Economic and Social Development Statistical Bulletin" released by the National Bureau of Statistics and noticed that for the whole year of 2022, the per capita disposable income of residents in China was 36883 yuan, an increase of 5.0% compared to the previous year. After deducting price factors, the actual increase was 2.9%. The median per capita disposable income of Chinese residents was 31370 yuan, an increase of 4.7%.

In addition, the National Bureau of Statistics divides all surveyed households into five equal groups based on their per capita income level, from low to high. The average is divided into five equal groups, with the lowest 20% of income households being the low-income group, followed by the middle lower income group, middle middle middle income group, upper middle income group, and high-income group.

According to this division, for the whole year of 2022, the per capita disposable income of the low-income group in China was 8601 yuan, the per capita disposable income of the lower middle income group was 19303 yuan, the per capita disposable income of the middle income group was 30598 yuan, the per capita disposable income of the upper middle income group was 47397 yuan, and the per capita disposable income of the high-income group was 90116 yuan.

Based on this calculation, the per capita disposable income of the low-income group is about 717 yuan per month, the per capita disposable income of the lower middle income group is about 1609 yuan per month, the per capita disposable income of the middle income group is about 2550 yuan per month, the per capita disposable income of the upper middle income group is about 3950 yuan per month, and the per capita disposable income of the high-income group is about 7510 yuan per month.

The 2022 National Economic and Social Development Statistical Bulletin with accompanying images, sourced from the official website of the National Bureau of Statistics

Can the median per capita disposable income represent the median income of residents? Is the middle income group the same as the middle income group?

The Red Star Capital Bureau has noticed that there has been controversy for many years regarding the standards for middle-income groups.

In January 2019, the National Bureau of Statistics released the "2018 National Time Use Survey Bulletin". In its interpretation of this survey, the National Bureau of Statistics defined the middle-income group as the group whose monthly income ranges from 2000 to 5000 yuan. A monthly income of 2000 yuan can be considered as middle income, which has sparked heated discussions among netizens, with some questioning the low standard.

Subsequently, the National Bureau of Statistics clarified that the middle-income group ≠ the middle-income group, and the monthly income of 2000-5000 is not a "middle-income group". The term "middle-income group" mentioned in the survey results is not related to the general classification criteria for income groups. The "middle-income group" used in the survey is actually the concept of "middle-income group", which is a common classification method in surveys.

That is to say, whether in the Gazette or the Time Survey, the statistical concepts of "middle-income group" and "middle-income group" are different from the middle-income group we understand in our daily lives, and they are naturally not groups with a monthly income of 2000-5000 yuan.

So, what do we usually refer to as the middle-income group?

Middle income group in China:

Family annual income between 100000 and 500000 yuan

In fact, the definition of the middle-income group is a highly academic issue, and there is still some controversy. The popular methods for defining it include absolute and relative standards.

The so-called "absolute standard" refers to the use of objective indicators such as income or expenditure to define the middle-income group. At present, China also adopts this standard.

According to the Beijing Business Daily, in the 2020 "Social Blue Book: Analysis and Prediction of China's Social Situation in 2020", the middle-income group was defined as a family with an annual income of 100000 to 500000 yuan. According to this standard, the middle-income group in China accounted for about 28% of the total population in 2018, approximately 400 million people, and this data is also widely used.

Cover image of "Social Blue Book: Analysis and Prediction of China's Social Situation in 2020"

The statement made by Li Shi that "a monthly income of 3000 yuan can be considered as a middle-income group" is derived from this. He said, "Based on the lower limit of an annual income of 100000 yuan for a family of three, it means that a person's annual income is about 33000 yuan, and on average, it is around 3000 yuan per month, which can basically meet the standards of the middle-income group."

In addition, the "relative standard" corresponding to the "absolute standard" is centered around median income, and the upper and lower limits of the boundary of the middle-income group are defined by setting a floating ratio.

Li Shi also stated in an interview, "For example, in some EU countries, they use 60% of the median income of EU countries as the lower limit of the middle-income group, and 200% of the median as the upper limit. If your income happens to be between 60% and 200% of the median income, you are considered a middle-income group."

Li Shi believes that the size of the middle-income group divided by relative standards will basically not increase with economic growth and income increase. Because an increase in income means that the median is also increasing, and once the median is raised, the population divided by this standard is basically still this group and will not increase. However, the size of the middle-income group divided by absolute standards will continue to expand with economic development and income growth.

Professor Hong Tao, Director of the Institute of Business Economics at Beijing Business University, stated in a previous interview that China's middle-income population exceeds 400 million, accounting for over 30% of the total population, and has formed a "dumbbell shaped" population income structure.

The ellipse is the goal we pursue, which means that the proportion of the middle-income group is the largest compared to the high-income and low-income groups, which means that the income gap between groups is relatively small, so society is relatively ideal

Hong Tao believes that although China has a "dumbbell shaped" structure, the proportion of middle-income groups is still relatively low, and high-income and low-income groups still make up a relatively large proportion. "The elliptical shape is the goal we pursue, which means that compared to the high-income and low-income groups, the proportion of the middle-income group is the largest. In other words, the income gap between groups is relatively small, so society is relatively ideal. Therefore, in China, the larger the middle-income group is, the better, and it is better to exceed 30% or even larger."