McKinsey Global Institute released a new report titled “Poorer than their Parents: Flat or Falling Incomes in Advanced Economies,” which details the decline and stagnation of middle-class incomes around the world. Fortune staffer Chris Matthews takes a look at the report which reveals as many as 70% of households in 25 developed economies saw their incomes drop between 2005-2014, compared to only 2% in the previous 12 years.
This research exemplifies how most expected their wealth to grow throughout their lifetimes but saw their aspirations shattered. However, as in most research, there are caveats:
First, McKinsey researchers didn’t conduct a longitudinal study that tracks the individual fortunes of specific people over the course of many years. So while we know that the incomes of population segments (for instance a male 40 year-old college grad) are stagnant or falling, individuals within those segments may have much different fortunes.