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The middle-income trap is the idea that a middle-income country could end up stuck between poor countries with lower wages and rich countries with better technologies, leaving them to compete with both countries above and below them. Adding to this, poor countries have the benefit of being able to move workers from surplus-labor industries into more productive ones. In fact, the Lewis two-sector model can help to explain why this trap may be a very real thing. As workers move from unproductive sectors into more productive ones, such as from agriculture to industry, a country experiences large growth. However, once labor is being used efficiently a country must instead rely on improving productivity within their factories.
The author of this article argues that this may not be the case. He cites a study done by the Royal Bank of Scotland which found that movement between agriculture and industry and service sectors contributed only 1.4 percentage points of China's annual growth between 1995 and 2012. Furthermore, countries can remain competitive at all wage levels since wages and productivity exist along a continuum. Finally, growth models are continuous, and while the Lewis two-sector model explains a large part of growth, it is not exclusive. Factories are constantly improving their productivity while their workforce arrives. The author concludes by saying there are numerous traps that countries of any income level can fall in to, and that there is no reason to single out the middle levels.
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