INTRODUCTION
The middle class has generally been defined as the class of people who are between the 'upper'
class and the 'working' class, on the basis generally of income or expenditure. These people are
sometimes referred to also as the 'bourgeoisie' and possess either or both of two characteristics.
First, members of the middle class are generally persons with higher education often employed
as professionals or managers. Second, they may be endowed with entrepreneurial qualities and
own small trading or production establishments. A large and expanding middle class is the sign
of a rapidly growing economy.
“The middle class in Pakistan can closely be defined as the section of society
that comprises households with a minimum monthly income of Rs50, 000.
A household on average consists of six members”
Role of Middle Class Society
The middle class can also play an effective role in promoting social and political change, as has
been the case in many countries. They are frequently instrumental in demanding accountability
for efficient and honest delivery of services and act as a counter to elite capture of state
resources. They are also more inclined to promote the formulation and implementation of
progressive policies.
Identification
There is need also to identify the distribution of the middle class within the country. Estimates
are that 56 percent of the middle class is in the cities and towns of Pakistan and 44 percent in the
rural areas. 59 percent of the middle class lives in Punjab; 22 percent in Sindh; 15 percent in
Khyber-Pakhtunkhwa and 4 percent in Baluchistan. The share in home remittances of the middle
class is 34 percent. Over 57 percent of the remittances accrue to the upper class. The simplest
approach to identifying the middle class is to look at the characteristics of the people in the third
and fourth quintile of population on the basis of income or expenditure. This is made possible in
the Pakistani context by the Household Integrated Economic Survey (HIES) conducted
periodically by the Pakistan Bureau of Statistics (PBS).From 2001-02 to 2015-16, eight such
surveys have been undertaken on a stratified random sample of over 20000 households all over
Pakistan
Structure
The middle class in Pakistan has a heterogeneous occupational structure in which members of
the lower middle class are engaged in occupations similar to that of the poor, whereas the upper
middle class is involved in knowledge services and trade. A sizeable portion of lower middle
class families receive their incomes from expatriate Pakistanis working mostly in the Middle
East. Currently, the country’s foreign remittances stand at nearly $18 billion. A sustained inflow
of huge foreign remittances has played a significant role in bringing prosperity. A culture of tax
evasion has also contributed to surplus funds with the business community and professionals.
Further, a section of society is a beneficiary of smuggling amounting to at least $8billion
annually through Pak-Afghan border.
Estimation of middle class
Fortunately for the technology startup community the middle class estimation challenge has been
of interest to economists much before it became a topic of interest to technology investors. There
are a number of studies that pose and try to answer the question. What is the actual size of the
Pakistani middle class? There are a number of methodologies at play. They include:
1. Gross percentage of total population approach, vintage 2011-2015 (38% – 42% or 82
million individuals),
2. Daily household expenditure of over $2 per person, vintage 2011-2014 (6 – 12 million
households),
3. Smart phone ownership and data package usage, vintage 2017 (40 – 54 million adult
individuals).
Three periods can be identified with regard to the progress of the middle class since 2001-02.
During the Musharraf era up to 2007-08, incomes grew relatively fast but income inequality
increased sharply. Consequently, the per capita income of the middle class rose in real terms
annually by 5 percent, while the national per capita income grew faster at 5.5 percent. Based on
the above findings, there is need to explain why the middle class of Pakistan is shrinking and
why their incomes are growing slowly. The first reason is the adverse development in the labor
market during the last few years, with regard to employment opportunities for educated workers,
a large segment of which is in the middle class. There has been an exponential increase in the
unemployment rate of such workers.
Conclusion
The overall conclusion is that the middle class of Pakistan finds itself faced today with limited
opportunities in the labor market and a big squeeze in its living standards. The forthcoming
elections will provide an opportunity for it to continue to agitate for improved governance,
greater accountability against corrupt practices, for progressive policies against high inequality
and for improvements in the provision of services.
