Why Did the Middle Class End? Asset Crisis, Debt and the Long Shadow of AI

Global billionaire wealth jumped by about 25 percent last year while median incomes slipped in many of the same economies. Oxfam put the 2024 rise at three trillion dollars and the 2025 total at 18.3 trillion, up 81 percent since 2020, with the top tier gaining roughly 2.5 trillion in a single year. The same economy now produces two speeds at once, and the average household feels the slower one.

That split pushes the definition front and center. The OECD defines the middle class as households between 75 and 200 percent of the national median, on average 61 percent of the population in member countries, subdivided into lower-middle, middle-middle and upper-middle. The video argues income alone is insufficient and that educational capital and professional networks shape who stays inside that band.

The confusion that everyone in Turkey is middle class comes from that broad band. Sixty percent sounds like a single bloc, yet the lower-middle and upper-middle live different economies. TÜİK's seven-layer socioeconomic status mapping shows the top layers clustering in big cities, while the lower-middle faces rent stress that the label hides.

The sharpest cut in the discussion is between an income crisis and an asset crisis. Malls are full and short holidays are more accessible than ever, while a decent home in a good neighbourhood, quality schooling and a secure retirement have become gated assets. Consumption has cheapened, wealth-building access has tightened.

Three engines drive that tightening together. Financialization inflates asset prices through debt, globalization shifted production to Asia after 1980, and technological polarization has hollowed routine mid-wage jobs, as the Philadelphia Fed documented in its 2024 Technology vs the Middle Class review, clustering growth at the high and low ends.

History shows this middle is a recent invention. In the 18th and 19th centuries a small bureaucracy made a civil post a quasi-upper status. When the state grew and bureaucracy swelled, the same post became middle. Mass urbanization, mass education and bureaucratization peaked together in the 20th century and produced the sweet spot.

The sweet spot lasted from 1945 to 1973 in the West and until the pre-1990s graduate cohorts in Turkey. The New Deal era, strong labor movements in Europe and industrial employment made the middle-class promise credible. A university degree was a scarce signal then, so it lifted its holder decisively.

Then credential inflation arrived. Graduates after the 1970s in the West and after the 1990s and 2000s in Turkey saw the same diploma buy less. Globally a 2021 study that counted anyone spending above 13 dollars a day as middle class would land near 20 dollars today after inflation, while Brookings long used 10 to 100 dollars per person per day as the global band, underscoring how national and global yardsticks diverge.

The world also rebalanced. Europe's postwar boom gave way after 1980 to a eastward tilt, with Asia adding hundreds of millions to the middle class between 1980 and 2008 while the Western middle thinned. Timing, in that sense, is not context but destiny in this story, shaping who rode which wave and when.

Financialization turned timing into intergenerational luck. Early buyers of homes and land rode the asset swell, later entrants inherited the debt needed to reach the same door. Housing drifted from shelter to investment, and credit kept the middle-class lifestyle on life support for a while, as the conversation stresses.

Turkey's Central Bank data makes the drift concrete. The Housing Price Index in September 2025 rose 1.7 percent on the month and 32.2 percent year on year in nominal terms while easing 0.8 percent in real terms. Within the same year Ankara gained 41.1 percent, Izmir 34.4 percent and Istanbul 30.7 percent. Nominal heat with a real cool-off signals a decoupling of prices from incomes.

Politics mirrors the economics. A broad middle is often cast as a carrier of stability and democracy, while asset-poor and precarious groups drift more static and less unionized, a tension the Marxist divide into labour and capital keeps alive as critique. Those who feel safe in the upper-middle still self-identify as plain middle.

Technology widens the fault. Artificial intelligence and automation extend the transfer of routine value creation to dead labour, first hollowing industrial mid-wage work and now pressing into the middle tiers of services. Inside the same flagship firm, one engineer may earn around 250,000 dollars a year while another searches for a 2,000 to 2,500 dollar post that no longer exists.

The bleakest frame cited is a five-layer future. At the bottom a pool whose skills are devalued, above it a precariat just above minimum income and constantly exposed to automation, together around 70 percent of society. Above them sit highly skilled homogroups, then a well-asseted top 20 percent and at the apex a one percent tech-capital elite.

Gains now flow to first movers. Automating a service with AI tools and packaging it can multiply annual earnings in months for those who arrive first, while chip makers rally on equity markets as other functions inside the same supply chain feel devalued. The premium for being early widens the gap between asset holders and wage earners.

Turkey reflects the global pattern rather than escapes it. More luxury cars, yachts and billionaires appear on the same street where purchasing power erodes. Asset inflation suppresses fertility, and lower fertility in turn raises the prospect that asset prices age with the population and eventually deflate, feeding a loop that both sustains and limits itself.

Why there is no prescription follows from two heavy loads at once. A large debt stock and demographic retreat do not unwind together quickly, and even mass social housing would leave access to quality schools, neighbourhoods and pensions unrestored without deeper repair. Weak union density and a tax base tilted onto labour further shrink the policy window, which is why easy fixes sound hollow.

The closing verdict is precise: the middle class has not vanished, the world that produced a broad middle class has. Without conditions akin to the 1945 to 1973 window of productive employment, affordable housing and expansive social policy, reproducing the same width of middle is hard. Calling back the name without rebuilding the conditions is like calling into an empty hall that still carries the echo.