For decades, the West lived with the feeling that prosperity was almost a natural right. But today many European and North American citizens feel that their standard of living is deteriorating. Housing is more expensive, job stability seems more fragile, and social mobility has slowed down. The question is inevitable: have Western middle classes actually become poorer?

Some economists, such as the renowned specialist in global inequality Branko Milanović, qualify this narrative. According to his research, Western middle classes have not become poorer in absolute terms. What they have lost is something else: their privileged position within the global economy. And although this distinction may seem technical, it is key to understanding one of the major transformations of the 21st century.

If we observe the evolution of real incomes in Europe or the United States over the past three decades, the conclusion is clear: middle classes have not become poorer in strictly economic terms. Incomes have continued to increase, but at a very modest pace, often below 1 % annually. This growth is sufficient to avoid a widespread decline in living standards, but too slow to generate a clear sense of progress. In absolute terms, many Western households today have broader access to goods and services than thirty years ago, from digital technology to international travel or a much wider cultural and educational offering.

However, this gradual progress has occurred in parallel with much faster transformations in other areas of the global economy. On the one hand, the enormous concentration of wealth in the hands of a minority within Western countries themselves has widened internal inequalities. On the other hand, the rapid rise of new middle classes in major emerging economies has altered the global economic balance. This double movement —the accumulation of wealth at the top and rapid growth outside the West— has profoundly changed the perception of prosperity and has fueled the sense that the economic center of gravity of the world is shifting.

When comparison reshapes the perception of prosperity

For much of the 19th and 20th centuries, Europe and the United States occupied an almost undisputed position within the global economic system. The Industrial Revolution, technological leadership and control over the main international financial institutions placed the West at the center of the world economy. But this order is evolving. In recent decades, economies such as China, India, Indonesia and Vietnam have undergone extraordinary processes of industrialization and growth, allowing hundreds of millions of people to access income levels that were once exclusive to developed countries.

This process has produced a significant paradox: while global inequality between countries is decreasing, the map of economic power is being redistributed. The West still concentrates a very large share of global wealth, but it is no longer the only center of prosperity. The rise of new emerging economies is gradually modifying the commercial, technological and financial balances that for decades defined the international economic order.

This shift also has a social and psychological dimension. Sociologists speak of relative deprivation to describe the perception that arises when other groups or regions prosper more rapidly. It is not necessarily a real impoverishment, but rather a constant comparison. In a hyperconnected world, where the internet and social networks expose lifestyles and economic opportunities from all over the planet, this comparison multiplies.

Products, technologies and experiences that once seemed exclusive to the West are now part of the everyday consumption of millions of people in other regions of the world, inevitably transforming the perception of one’s own economic status.

The end of a historical exception

The sense of economic insecurity running through many Western societies has deeper roots than the evolution of wages or the cost of living. What is changing is the global economic order that was built after the Second World War. For decades, institutions such as the International Monetary Fund and the World Bank reflected a balance of power dominated by Western economies, consolidating a system in which Europe and the United States occupied the center of global financial power.

Today, however, this balance is being redefined. The growing economic weight of emerging economies is forcing a reconsideration of the rules of the international game and a redistribution of influence within the global system. This does not necessarily imply the decline of the West, but it does mark the end of an exceptional situation: that of a small group of societies concentrating a disproportionate share of global wealth. When a society moves from being clearly dominant to simply competitive, the perception of loss can be intense, even if living standards continue to improve.

Understanding this transformation is key to interpreting the political, economic and social debates of our time. The questioning of globalization, tensions between economic blocs or the rise of disruptive political movements are all part of this same process of global rebalancing.

At La Plaça of 11Onze, we analyze these changes with a critical and pedagogical perspective to help the community understand how the global economy is evolving and, above all, how we can make more informed financial decisions in a world that no longer revolves around the West.

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