'Biggest Middle-Class Squeeze: Ankur Warikoo Sees Wages Stagnating Even As Markets Boom

Finfluencer Ankur Warikoo argued in his latest video that India is overseeing middle-class trap, stating that stock markets had seen record growth, but no similar growth was noted in the income of the average worker.

The finance influencer called this "the biggest middle-class squeeze in independent India" in his YouTube video.

Warikoo stated that the stock markets saw an unprecedented historical growth between 2020 and 2024, with the BSE Sensex going up by 90%, the NSE Nifty 50 seeing 59 all-time highs in 2024, and mid-and small-cap indices seeing yearly over 22–25%.

The average salary did not see similar gains amid this phenomenon, instead growing by 0.1% in the same timeline, after being adjusted for inflation. Real Income in fact, saw a dip with the wages of employed men reducing 6.7%, salaried women seeing a 12.7% nosedive, and self-employed women seeing a 32% reduction.

According to reports, assets and services that define the middle class such as rent, real estate, cars, travel, education and gold have all gone up in the range of 50-90%, thus effectively raising the cost of living.

This was contrasted with profits for corporate entities climbing by 23%. Warikoo further noted that household savings as a percentage of national income also fell down to 5.2% from 11.7%, which was the lowest in 47 years. This was due to consumption of basic goods and services getting more expensive as noted earlier.

Credit card bills, personal loans, and retail loans also saw a surge, with unsecured borrowing emerging as the fastest growing segment. Warikoo observed that these factors have led to the most acute concentration of wealth in India's history.

With the top 1% now having ownership of 40% of national wealth compared to 13% in 1961 that was 22.6% of the national income, which is the most it has been in 100 years.

This number surpasses countries such as the US, China and South Africa. Warikoo noted that India now has 333 billionaires, whose aggregated wealth holdings equal 50% of India’s gross domestic product.

The wealth of India's billionaires had climbed 280% over the past decade, with national income seeing 24% growth. The middle class' share of national income however declined to 23% from 43% in 1980.

Warikoo also observed that home ownership in India was rapidly becoming more and more inaccessible to middle-class Indians. He stated that a person earning Rs 10 lakh per year in Mumbai, saving 30% of that annually, would need to wait 55 years to buy an average home.

The national ratio of house price to annual income was seen to be between 7 times and 17 times, lagging behind the global comfort band of 3 times to 15 times.

Warikoo called this phenomenon the "middle-class trap", which he describes as a cycle where salaries are not proportional with inflation, loans aid consumption and not wealth generation, and the wealthy increase their wealth on the back of their assets.

He asked viewers to stay away from bad debt, have emergency buffers, and consistently invest in long-term equities. His solution to the salary situation is disciplined investing.

“The rich aren’t getting rich by working harder. They’re getting rich by making their money work smarter — and the middle class must learn to play that game too," he said.