Middle class shrinking in Europe: study

The middle class in Europe shrunk by 2.3 percent from 2004 to 2011 and the drop has continued since then, the International Labor Organization (ILO) Wednesday said in a new study.

According to the new study, titled "Europe's Disappearing Middle Class? Evidence from the World of Work", the decline is even deeper in countries such as Germany and Greece.

The core middle class -- which is defined as those having an income between 80 and 120 percent of the median income -- represents between 23 percent and 40 percent of households in the European Union.

The study said the strongest middle class is still to be found in Denmark and Sweden (with 40 percent and 39 percent respectively), while Latvia (23 percent) and Lithuania (24 percent) have the lowest rate.

"Countries with a stronger middle class are characterized by a higher number of working adults within households and by an increase of the number of households with two incomes," said Daniel Vaughan-Whitehead, a senior economist at ILO.

"This also means that one income may now no longer be enough to remain in the middle class. In some cases, certain professions such as teachers and medical doctors, which are commonly categorized as middle class and which typically employ women, may no longer belong to middle income groups," added Vaughan-Whitehead.

The report pointed out that the erosion of the middle class was already visible before the crisis in a number of countries, especially in Germany, but also in Luxemburg, the Netherlands, Greece, Britain, and even in Denmark.

Middle class groups have been hurt by the implications of the crisis in countries such as Greece, Spain, Estonia, Cyprus and Portugal.

While the middle class was increasing in Spain before the crisis, it has contracted since the beginning of the crisis. Similarly, the growth of the middle class that was visible in most Central and Eastern Europe countries was halted by the crisis. Enditem