As we already know, 31% of the total population in India is middle class, and this percentage is projected to reach 38% in the next 5 years and 60% in the next 10 years. This increase in the percentage of middle class people doesn’t show good growth for the Indian economy. Is it the Death of the Middle Class and What It Means for the Future Economy?
Why there could be the end of the middle class resulting in a declined economy?
The answer is simple – AI (Artificial Intelligence).
As per the analysis, 40% of white-collar jobs will be gone. White-collar jobs involve going to offices and working for the salaries that most middle-class people earn. These jobs involve IT professionals, managers, and administrative office work, etc.
The term “middle class” varies, but it generally refers to the people with moderate income levels to afford comfortable living and spending based on their needs.
AI, as we all know, is the future of the world, but will also reduce the number of jobs in the IT industry. AI won’t affect only IT but all the major industries.
Since India is not a manufacturing hub for IT jobs, it could eat up the middle class, who are the largest consumers of India and would eventually lead to economic inequality.
Moreover, the Indian economy depends mainly on consumer spending. The middle class is the backbone of stable economies, not only in India but in all the other countries across the world. If the middle class loses jobs, which affects their purchasing power, people will buy less, and hence the businesses, demand for goods and services, and overall economic growth will decline significantly. This should be taken as a critical alarm by the Indian Government.
But our Indian Government and the leaders of big companies are not understanding the consequences. They are more inclined towards the short term goal of getting the work completed fast and easily by AI. The corporate or Indian government leaders should see the long-term goals and should broaden their viewpoint to accommodate the dangers of AI on the overall Indian economic development.
However, there could be debates on this topic as service-based companies like Infosys, TCS or Tech Mahindra could manage to survive, but they won’t be able to get the same number of talented employees as they currently have.
There could be different views based on different mindsets of the people. Few are mentioned below, which people might think.
Agree: People are there who agree with the point, saying white collar jobs are being replaced by AI and would lead to a disaster.
Don’t Agree: People who don’t agree say that this situation is only for IT jobs and doesn’t apply to non-IT jobs, and would help to do better deep research, which would lead to innovations and would lead to economic growth and the status of India in the world.
Neutral: People also mentioned that this kind of change in the technology brought in by Artificial intelligence would replace jobs and would also create new jobs. The only way out is to create as many opportunities as possible in the fastest way possible. This is because AI is very fast and is getting to the point where people will start losing their jobs, reducing the spending power of the middle-class people. When people buy less, businesses can’t sell. When businesses can’t sell, then the economic crisis might occur.
People also say that India has a lot of low productive employees. AI automation will help companies scale their business with better quality work using AI.
Middle class people who are not skilled enough will not be able to survive the AI era since AI would cut down the jobs in various sectors like IT, finance, health, entertainment, education, etc.
AI could bring inequality in society by making the rich get richer and the poor get poorer. If not managed carefully, the rich who could afford AI technology and up skilled themselves would get richer, leaving the others behind in the race.
The middle class could struggle with the increasing inflation while their income does not increase. People would agree to whatever they are getting due to the threat of losing their job due to AI.
Middle class workers need to get new skills and adapt to the AI era changes to survive. This could be challenging as they have to compete with the AI.
From the viewpoint of industry leaders, AI can help in automating the repetitive tasks, thereby decreasing the workforce and saving capital to use that in more creative and strategic work to improve productivity.
Yes, AI can also help in creating new job opportunities like data science or any AI-related service.
AI can provide better and more accurate diagnosis and treatment, which requires precision. AI was already there in the health sector, but now the AI are more advanced.
AI can help in learning by providing individualized curriculum for the students. Students can take help of AI to make their studies better and efficient.
The middle class people need to keep on learning new skills to stay relevant in this new AI era, otherwise AI would beat them in every stage of life.
People can use their human nature to beat AI. AI can only do automated tasks but can not perform human-related skills like critical thinking or emotional intelligence. But still, the new era AI will have these capabilities. Hence we need to keep on improving our human skills.
Governments and corporates should support the people and their employees in transitioning to new jobs, providing more training and education.
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The decline of the middle class may have a significant impact on the economy of the country directly or indirectly. It is high time we addressed this issue, which requires proper policies to promote equitable growth, protect the working class and ensure that all are benefitted in the AI era. The approach should be such that everybody in the country grows and shines.
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