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Chinese magazine asks: ‘What does middle class mean’?

'If there is a lack of a consensus about what rich and poor are, then can a "middle class" or "middle income" really exist?'
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Rush hour in Beijing. (Frederic J. Brown/AFP/Getty Images)

HONG KONG — Caixin, a well-regarded magazine that could be thought of as a sort of Chinese Bloomberg BusinessWeek, just published a commentary that goes to the heart of a question at the center of our upcoming series.

When you’re talking about Asia — places like China, India, and the Philippines, where American middle-class jobs have been moving — what does “middle class” really mean? Obviously, the local understanding of what's middle class in Manila is different from what it is in Shanghai, or Bangalore — let alone New York.

As Betty Ng, the author of the commentary, writes, “In some countries, being middle class might mean owning a house and a car. In others, it may just represent having a roof over your head and a toilet.”

To find out what different places believe to be the middle, Ng reports that Fidelity Asia-Pacific asked hundreds of people in 10 Asian cities what the boundaries were for being high or low income.

The answer? Confusion.

The results of the survey were a surprise. None of the cities can define clearly what low, middle or high income is. All the investigated cities lack a definition that a majority of people would agree with.

For instance, in Beijing and Shanghai, the most common definition for a "low-income household" is to have a monthly income of 5,000 to 7,499 yuan, however, this represents opinions of 33 percent of all respondents. The answer that comes second, with 25 percent, is 2,500 to 4,999 yuan for a monthly household income. ...

If there is a lack of a consensus about what rich and poor are, then can a "middle class" or "middle income" really exist? Or do Asians somehow live in a classless society? These questions are worth thinking about.

According to our survey, people usually define levels of income in relation to their own household income. The more one household earns, the higher their definition of what a high income is.

Even in the US, it’s hard to get people to agree on exactly what “middle class” means, and where it begins or ends. The canonical example is $250,000 households in ultra-expensive New York City that feel firmly middle-class, while ranking in the top tier of income.

However you define the middle class, one thing everyone in America can agree on is it’s shrinking. 

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Poll: Obama better for middle class

GOP hopeful Mitt Romney, on the other hand, is seen benefiting the rich. White men, too.
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Graphic. (Kyle Kim/GlobalPost)

BOSTON — Middle-class voters are, of course, important to the Nov. 6 presidential election.

Both President Barack Obama and Republican challenger Mitt Romney have been aggressively targeting this group, particularly in swing states like Ohio, Michigan, Virginia, Pennsylvania and other places where members of this large and economically struggling voting bloc call home.

The big question: whose policies would be better to get middle income Americans back on track?

According to a poll released today by Gallup, President Obama is winning this argument.

Convincingly.

Here's how Gallup put it in today's report:

"More Americans believe middle-income earners would be better off in four years if President Barack Obama is re-elected than if Mitt Romney wins, by 53% to 43%. The public also says lower-income Americans would be better off under an Obama presidency, while, by an even larger margin, they say upper-income Americans would do better under Romney."

According to the Gallup poll, these groups would also fare better under four more years of Obama: racial and ethnic minorities, women, young adults and senior citizens.

The two are tied (47 percent v. 47 percent) when it comes to small-business owners.

Here's how Gallup analyzed the findings:

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Middle class ad watch: Obama and Romney reach out to the middle (VIDEO)

Middle-class voters are key to November's election. Amid Mitt Romney's infamous 47-percent comments, here's how both sides are trying to reach them.
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Graphic. (Kyle Kim/GlobalPost)

The fallout over Mitt Romney's infamous "47-percent" comments has become a key factor in the ongoing race for the White House.

Both President Barack Obama and his Republican challenger, of course, have been desperately wooing this large — and economically-challenged — middle-class voting bloc.

That's especially true in the swing states — think Ohio, Virginia, Pennsylvania — that are likely to decide this election, and where lots of middle-class Americans live.

But with new polls showing President Barack Obama widening his lead, there was more bad news today on the middle class front for GOP candidate Mitt Romney.

According to a poll by the Washington Post and ABC News, 54 percent of Americans who heard the Romney fundraising comments regarded them in "an unfavorable light."

But the pain for Romney's campaign cuts even deeper.

Here's how the Post's Jon Cohen digs into the numbers:

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China's Great Wall of Inequality: how a booming economy is creating a deeply divided society

The rich-poor divide in China is a "very dangerous" situation, says one income distribution expert.
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A man works inside a fresh seafood shop at a wet market in Hong Kong on June 26, 2012. The wealth gap in Hong Kong, already one of the world's widest, is worsening as the rich get richer and the poor struggle to make ends meet, official figures show. (DALE de la REY/AFP/Getty Images)

HONG KONG — When it comes to development, China has gotten the bad along with the good.

At the same time that it has brought millions of people out of poverty and benefited from US outsourcing, the country's wealth gap has widened so much it is now one of the largest social problems the country faces.

As I found in my reporting in Shanghai — to be described in an upcoming story — even workers who moved from the countryside and know that their lot has improved over their parents’ generation feel limited, even stifled, by China’s deeply unequal society.

A recent Bloomberg interview shows that this rich-poor gap is unlikely to be fixed anytime soon. Li Shi, a professor at Beijing Normal University’s China Institute of Income Distribution, projects that China’s Gini coefficient (a measure of income inequality) will stand well above a level associated with social unrest for the next decade:

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Who says the US doesn't export anymore?

In fact, exports are stronger than ever. But it's the 1 percent who are profiting.
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Oh exports, where art thou? (Justin Sullivan/Getty Images)

BOSTON — It's a common lament, the kind of rant that rolls off the tongue in an election year: American workers can’t compete globally. They no longer produce stuff that the world wants. And that's why our economy is sluggish.

The problem is, it just isn't true.

On the contrary, America may not be stitching many pants or making much steel, but it has never before hauled in so much money from abroad. The fruit of our labor is at an all time high. And exports are more critical to US prosperity than ever.

Here are the Commerce Department’s numbers: In 2011, America’s sale of goods and services to the rest of the world grew by 14.5 percent, setting a record of $2.1 trillion. Exports accounted for 13.8 percent of the US economy — higher than any year since an anomalous boom during World War I.

Exports are also critical to the economic recovery, contributing more than half of GDP growth in 2011, according to the Commerce Department.

So where are the robust opportunities for American workers?

It turns out that we’re just too efficient — and perhaps a bit underpaid.

Yes, exports have more than tripled in the past two decades, and they account for a greater part of the US economy than ever. But as a share of employment, they’ve stayed relatively constant, at about 6 to 7 percent, according to a 2008 International Trade Administration report.

How could this be?

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Foxconn riots: Good news for US middle class?

How unrest in China's factory economy might affect middle-class manufacturing jobs in America.
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Participants dressed up to represent Foxconn workers take part in a protest against the Taiwanese technology giant, which manufactures Apple products in mainland China, outside an Apple retail outlet in Hong Kong on May 7, 2011. At least 13 Foxconn employees died in apparent suicides last year, which rights activists blamed on tough working conditions in a case that highlighted the challenges faced by millions of Chinese factory workers. (ANTONY DICKSON/AFP/Getty Images)

BOSTON — There's been more trouble at Foxconn, the Taiwanese electronics company that supplies many US technology giants — including the parts for Apple's iPhone and iPad.

Details are still murky, but it seems a riot broke out at one of the company's factories in the northern Chinese city of Taiyuan.

Foxconn has suspended production there as it sorts out the latest mess.

Here's how the New York Times put it:

"Unconfirmed photographs and video circulated on social networking sites, purporting to be from the factory, showed smashed windows, riot police officers and large groups of workers milling around. The Foxconn plant, in the Chinese city of Taiyuan, employs about 79,000 workers."

Foxconn, of course, has had of problems over the years, ranging from alleged rights abuses to pay and other working conditions complaints. GlobalPost documented these stories and others in our award-winning reporting series Silicon Sweatshops and its follow-up.

But could trouble in China spell good news for middle class workers in America?

That's the point of an interesting post today by Jeff Macke at Yahoo Finance.

Macke makes the case that a variety of factors — think higher transportation costs, management challenges, cultural difficulties — are eroding the logic behind shipping these kinds of jobs overseas.

Most importantly, due to globalization wages around the world are going up and it's only a matter of time before the world runs out of countries where people "will assemble our widgets for 50 cents a day."

All of this is a good thing — Macke's argument goes — because it raises living standards abroad and directs investment back into the US, where companies are already finding a ready-made manufacturing base to employ.

Here's a sample:

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The 6 steps to entering the middle class

The Brookings Institution has investigated the key steps every American child should take to break into the middle class.
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Graphic. (Kyle Kim/GlobalPost)

BOSTON — High fives all around to the researchers at the Brookings Institution.

The Washington, D.C.-based think tank this week tackled a very important question: just how do people in America make it into the middle class?

It's a key question, of course, for the world's largest economy — particularly as this group has been struggling for the past two decades.

It's also a central question for GlobalPost's America the Gutted reporting project, which for the past 10 months has been investigating the long-term difficulties of the US middle class and how this economic trend is playing out around the world.

For its research, Brookings went to the root of the issue: children.

In a report titled "Pathways to the Middle Class: Balancing Personal and Public Responsibilities," Brookings asked why some children do better than others in eventually achieving middle class status.

And while there's some good news in here — 61 percent of Americans reach the middle class by middle age, Brookings says — the path is not equal for all. Moreover, the United States isn't comparing favorably around the world in this department:

"The reality is that economic success in America is not purely meritocratic," Brookings writes. "We don’t have as much equality of opportunity as we’d like to believe, and we have less mobility than some other developed countries. Although cross-national comparisons are not always reliable, the available data suggest that the U.S. compares unfavorably to Canada, the Nordic countries, and some other advanced countries. A recent study shows the U.S. ranking 27th out of 31 developed countries in measures of equal opportunity."

Most importantly, getting into America's middle class is easier if you've been born to the right parents. And it helps — a lot — if those parents are already rich.

Here's the money quote from the report:

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Obama hits back on Romney's 47 percent comment (VIDEO)

In an interview with Univision, President Barack Obama explains his position to middle class voters, and anyone else who will listen.
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Co-hosts Jorge Ramos, left, and Maria Elena Salinas sit with US President Barack Obama during a break in a taping of Univision News' "Meet the Candidates" at the University of Miami Sept. 20 in Coral Gables, Fla. (Brendan Smialowski/AFP/Getty Images)

BOSTON — The plight of middle class Americans has, of course, been a key aspect of the current campaign for the White House.

Both President Barack Obama and his GOP challenger Mitt Romney have tried mightily to woo this economically-challenged group, particularly in the swing states where November's election is likely to be decided.

This strategy hasn't gone particularly well for the latter this week and on Thursday, President Obama kept up the pressure — in English and in Spanish.

During an interview with the Spanish-language TV stations Univision, Obama responded in full to the fallout over Mitt Romney's now infamous 47-percent comments.

"I've been president now for almost four years," Obama said. "But the day I was elected, that night in Grant Park where I spoke to the country, I said 47 percent of the people didn't vote for me. But I heard your voices and I'm going to work just as hard for you as those who did vote for me. That's how you have to operate as president."

Here's the full clip:

Not to be outdone, Mitt Romney also appeared on Univision Thursday.

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America the Gutted: How big of a problem is China?

A new Pew Research Center survey shows that a majority of Americans view China as an economic threat. The finding is not surprising. But does it make sense?
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What does the Buddha think? (Antony Dickson/AFP/Getty Images)

BOSTON — "The whole secret of existence is to have no fear."

So said the Buddha.

Then again, that happy chubster wasn't particularly concerned with a structural economic shift that contributed to a steady decline in his income, or the rise of a distant economic power that — over a period of several decades — cornered the market on his profession of spiritual philosophy.

Unfortunately, millions of middle-class Americans don't have that luxury.

So the results of a Pew Research Center survey this week should come as no surprise: Americans, by a large majority, fear China's economic prowess.

Examine these numbers:

According to Pew, 59 percent of Americans view China's economic rise as a threat, versus the 28 percent who are more troubled by China's military power.

Sixty-six percent view China as a competitor, versus the 16 percent who see Beijing as a partner.

A full 78 percent believe China's large holdings of US debt is a serious problem.

Seventy-one percent see US job losses to China in that same light, while 61 percent believe the US trade deficit with China is a serious problem.

Download the full Pew report here. It's jam-packed with all sorts of interesting data, and well-worth a read.

But how should we interpret these feelings and findings? And, on a more philosophical level, is the Buddha right?

Our 10-month investigation America the Gutted — which will hit GlobalPost on Oct. 15 — offers some clues.

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Outsourced or insourced: An Indian lawyer's tale

Legal Process Outsourcing is hot, but it's not for ever.
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Rajinder Singh, shone here in his chambers at New Delhi's Patiala House Court, found at least one US law firm didn't pay enough to make legal process outsourcing work worth his time. (Jason Overdorf/GlobalPost)

NEW DELHI – As part of the America: the Gutted series, GlobalPost will examine how the growth of legal process outsourcing is affecting the law business in America and in India. By all accounts, the LPO business is booming in India. But what's it like to be a lawyer in India, anyway? We talked to New Delhi High Court advocate Rajinder Singh to find out.

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