What now for the hopes and plans of Ireland's middle-earners?

WHEN VIVIAN CUMMINS, an architect, and his partner, Erney Breytenbach, were at the final stage of approval for becoming foster carers, a social worker felt bound to pose a serious concern. Weren’t they “a bit, um, middle-class”?

What was a man to do? Apologise? For what?

The social worker was considering the effect on the child of being shuttled between a dysfunctional, unlovely home and the couple’s rural haven of art, antique rugs, pedigree dogs, freshly brewed coffee and large dollops of idealism, but nevertheless Cummins seethed. It was Breytenbach, a baggage-free South African, who broke the tension: “A bit?”, he retorted, with a roar of laughter.

It’s an issue that often surfaces in interviews such as this. People with decent aspirations – to earn a degree, own a home, educate their children at carefully chosen schools, enjoy an annual holiday, plan for old age and a comfortable retirement – complain that such ambitions are perceived almost as character flaws.

In a recent column in the Mail on Sunday Joe Duffy, the presenter of Liveline and a man not widely perceived as a defender of the middle classes, argued that “we now live in a country where ‘middle-class’ has become a dirty word, as politicians call on these taxpayers to pay more to bail out the banks, forgetting that these hard-working families are cut to the bone already . . . Middle-class families who decided to spend their savings on an Irish holiday home (instead of buying abroad) now find themselves having to shell out an extra €400 a year in property taxes: €300 for the holiday cottage and €100 for their primary home . . . Middle-class families have earned their wages and pay the bulk of the taxes that run this State. It’s time to stop beating them up.”

Duffy was singing the song of tens of thousands of his listeners and readers. In 2009, nearly 90,000 PAYE workers filed tax returns on rental incomes. Many of these so-called virgin investors in arrears are now reported to be in the cross-hairs of the banks.

LAST WEEK, ATthe request of The Irish Times, Amárach Research assembled a focus group of nominally middle-class, forty- and fifty-something Dubliners. These are their attempts to define the term "middle-class".

“I think of middle class as two incomes, two cars, two holidays a year, where you live,” says Cathal, who is the son of a low-paid civil servant, born in a working-class area and now living in leafy suburbia.

“It’s someone who saved and got their own mortgage, someone who is self-sufficient, who doesn’t get handouts. It means a little bit more than just coping,” says Miriam, who is a preschool teacher.

“They are people who are managing. You could have people who are middle-class who are in trouble now. But I don’t think that drops them out of the middle class . . . I suppose it is a mindset,” says Miriam’s husband, Ronan, who is an estate agent.

“But incomewise they could be screwed. They’re still the same as they were, but down in money,” says Donal, who has a background in banking.

“But wait three years and they won’t be the same,” says Cathal’s wife, Áine, who works in the home and considers herself more working-class than middle-class. “After three years, they’ll be scrimping and scraping, and they’re not middle-class then. If one loses a job, it takes only a few months for it to become apparent – things start to slip, there’s not enough money for heat, proper food . . . I don’t think they’re middle-class then.”

Little of this chimes with the traditional definition of middle-class. Education, as opposed to lifestyle, was always the primary marker, according to the psychologist Maureen Gaffney. The distinguishing factor used to be faith in the future, says Gerard O’Neill of Amárach. That’s why the middle classes valued home ownership, saved for a rainy day, sent the children to college and invested in the future. The liberation of credit in the boom years changed a lot of that.

Yet the middle class was a club of which many were happy to claim membership in the latter years of the Celtic Tiger. Back then, more than two out of three Irish people identified themselves as middle-class.

What our focus group is really describing, it seems, is not the traditional middle class but that much broader cohort variously known as the squeezed middle, the coping classes, the alarm-clock heroes or the battlers, depending on the country or political battleground.

The British Labour leader, Ed Miliband, resurrected the term “squeezed middle” in September 2010, then flailed around for a definition before settling on “not those on benefits, not those on six-figure salaries, but the broad middle class who find themselves financially hard pressed”.

Critics carped that this could encompass 90 per cent of the population. But that, in political terms, was the sheer genius of it: almost anyone could join. Britain’s squeezed middle always had a feeling it was being hustled and made to stump up for everyone else, above and below, and here was the proof. A similar story was coming from the US.

Ireland’s experience may be somewhat different from those of the other countries. Certainly, our experience of the 15 years from 1994 to 2009 bears little comparison to that of the US or the UK. Though it may astonish some to hear it, the benefits of the Irish boom were fairly widely distributed across all income groups (apart from the seriously rich top 1 per cent – of whom, sadly, we know very little).

“The sense that the boom was accompanied by sharp inequality across the board is not reflected in the statistics,” says Prof Brian Nolan of the school of applied social science at University College Dublin. “Whereas in the US the rich got richer and the rest stood still, here the whole engine moved ahead.” The most reliable figures stop in 2009, so there is no detailed statistical picture of the human fallout of the past few years. But Nolan is sure about which groups have been least affected by the recession in terms of income, if not wealth.

They include people whose main income, such as a pension, is already from social welfare, he says. Apart from the loss of the Christmas bonus, for example, their core income has not fallen, so the second and third deciles (those immediately above the bottom 10 per cent) have been the “most protected” among the social-welfare groups.

Employees of multinational corporations have not done badly either, he suggests. “Some have been hit by increased taxation, but when people say there seems to be plenty of money around, that’s who they’re thinking of.” Google and Facebook alone employ nearly 2,500 people in Dublin city, and have major expansion plans.

Farmers have also done well, even if their tax bills have soared, says Nolan. And he singles out retirees on big occupational pensions, a group so happily ubiquitous at the Holiday World Show in the RDS last weekend that they made an attempt on the world record for the largest conga line of over-55s.

And why wouldn’t they? A survey revealed that a quarter of them plan to take three holidays this year and that 40 per cent will be taking two. No doubt, they include a fair sampling of the nearly 8,000 public servants due to retire at the end of the month, with big lump sums and secure pensions. “Happy days,” says a desperate estate agent, praying that some of the dosh will be embedded in bargain Irish property rather than French gites.

But if some are insulated from the worst effects of the recession, others are not. Fás revealed this week that more than a quarter of people applying for retraining have third-level qualifications; 17 per cent are from a professional or technical background and 7 per cent worked as managers.

This is the difference between the 1980s and now, says Bryan Fields, the director of training at Fás. Back then, most trainees were first-time jobseekers, many of whom had not done their Leaving Certificate. This time, the toxic tide is also lapping away at the middle classes.

That’s the unique aspect of this recession, echoes Gerard O’Neill of Amárach. “A lot of households with two incomes are down to one income, or none. And it’s that shock that suddenly challenges their entire middle-class lifestyle, their ambitions and aspirations. They have less of a safety net. Perhaps they’re not entitled to social welfare benefits, perhaps they haven’t built up savings because they were using income to leverage debt. So the middle class is more than usually fragile . . . That status is far more fragile and more vulnerable to the shocks we’re now going through.”

Few people, middle class or otherwise, have escaped the ripples. According to the Central Statistics Office, only three of the 12 major employment sectors escaped job cuts between 2007 and 2011. They were human health and social work (which saw a 7 per cent rise), education (up 4 per cent) and information and communication (up 4 per cent). By contrast, construction employment fell by 59 per cent, agriculture, forestry and fishing by 29 per cent, industry by 19 per cent, accommodation and food services by 18 per cent, wholesale and retail trade by 15 per cent and the professional, scientific and technical sector by 14 per cent.

O’Neill identifies middle-aged people as the most squeezed group. The younger ones, not yet trapped, can head for the exit, he says. But even in the best of times, the level of happiness by age reaches its lowest ebb in the early 40s, an indicator of inevitable life-stage pressures.

“People in their 40s and early 50s are at the peak of their spending pressures,” says O’Neill. “A lot would have children in private schools and at the same time are suddenly noticing their parents growing older and having issues . . . You’re kind of trapped. It’s a crisis of obligation, both as a parent and as an adult child looking after your own parents.”

Vivian Cummins can identify with that. He has a partner and a child. His thriving architectural practice has reduced by three-quarters, from a busy hub of commercial projects to “just ticking over” on one-off houses and extensions. One of his technicians is in Australia, seeking mining work; the other is retraining as a carer.

“We’ve been knocked sideways . . . The safety nets are gone. If things start to get worse, all we can do is fall and throw ourselves upon the mercy of the public-health system and social-welfare system.

“Against that, we have savings. But we’re hoarding. I don’t want to spend any money unless I absolutely have to – and that is destroying the economy, because I’m not the only one. Everyone is terrified, sitting on their savings, and nothing is happening.”

The middle-class staple of private health insurance – the rate of which peaked at nearly 52 per cent of the population in 2008 – is the current “flashing red light” for Cummins and Breytenbach as they cast around for more ways to save. They are not alone.

In December, the percentage of people insured fell below 50 per cent for the first time in 10 years. Now, according to a recent Irish League of Credit Unions survey, 9 per cent say they are giving it up. Another 31 per cent say they will cancel if there are more price increases. If that happens, more than 100,000 people will be falling back on the overstretched public health service this year.

Cummins estimates premiums have increased by 450 per cent over 10 years and calculates that, at that rate, they will end up costing €5,992.80 each by 2020. “It’s completely unsustainable. But if you opt out, you’re going into a public system that isn’t geared for it . . . And then I want to scream and roar at the Government, ‘Where’s your overhaul from the five-point plan, the one where everyone was going to have private health insurance?’ ”

It’s when Cummins starts talking about his cancelled life-assurance policies that he becomes most agitated. He and Breytenbach have been foster parents for six years to a beloved child who is now 12. “He is as much our son as a blood child at this stage, so I’m thinking of him and his education and is he going to get as good an opportunity as I got? . . . What are we doing with our money if we’re not looking after the next generation?”

Like almost everyone interviewed for this article, Cummins worries about being perceived as glib or smug. He is well aware that in relative terms he is privileged – “I’m not worried about putting food on the table . . . I still want a holiday” – and is sanguine about the day-to-day cutbacks.

“You live with the car and the clothes you have . . . We just don’t do things as casually, like going out for a meal. It’s not the end of the world . . . But the spin-off from that is that shops are really suffering. I’ll live without my life assurance, but then Aviva is laying off 1,000 staff. It’s not just my policy cancellation, it’s thousands of others and the knock-on effect of those.”

BACK AT THEAmárach focus group, it slowly emerges that each member has experienced deeply felt life changes. When Miriam's son was in secondary school, she "visualised him heading off to the US for the summer during university vacations. That's something I thought we could do for him. We can't, and now he has a part-time job in college and he won't be going anywhere because he needs that job . . . It just wouldn't be there when he got back".

If she’s disappointed now, she anticipates worse to come. “I believe I’ll be saying goodbye to him in three years’ time when he graduates,” she says stoically.

Ronan mentions a recent back strain. “But I wouldn’t go to the doctor. Three years ago I’d have gone without a thought. But now? At €60 a visit? You’d be thinking very hard about that.

“The difference between now and the 1980s is that you’ve built up a lot of stuff and their value has been wiped out by the economy. Your pension, shares, housing values are gone, things you would have expected,” says Donal.

“I’m 52, I started work at 17, so I’ve been working for 30-odd years, and for the next 12 or 15 years you’re just looking at that wealth diminish. We used to go skiing at the drop of a hat – might even go twice. That’s gone. And you’re looking at what you can give to your children . . . There was a tradition of doing that, setting them up in a house. Those days are gone. Having said that, you can do without all those things, but you have to look at the knock-on effect on the whole economy. That’s the killer.”

“Everything is changing about your life,” says Dervla, a substitute teacher with three children of her own. “All the impulse buying is gone. You wouldn’t even think about the odd weekend away. Sometimes I think a lot of the fun about working is gone, like the little treats you might have found in town.

“And then you wonder what’s it all about, because there should be some kind of sweetener for working. It sort of wears you down a bit, even if you don’t notice it. I certainly sleep less well than I did before, because you just have more worries, more things on your mind. You kind of can’t see a way out.”

Cathal describes the strangling effect of tightening budgets. “Last month was way tighter for us. We’re dipping into our savings constantly and one day they’ll disappear forever. With my wages it’s just cut, cut, cut – they’re down by 33 per cent in five years. We’re just not able to cope on the wage alone any more. Things like car taxes are going up, VHI . . . And we’re going to have water, property and [broadcast] taxes.”

Áine, his wife, nods in agreement. “Once you see savings declining, it’s starting to get fairly scary.”

Donal is also experiencing relentless cuts. “Before, it was always done on the basis of being a ‘temporary help’ [for the company], but it’s taken as the norm now. I’m waiting for the next one – another 10 per cent. But it’s not the norm,” he says angrily, “because you’re taking home much less pay for more work and more responsibility. I’m looking at the guy down the road, in a council house, on family income supplement, and everyone in it has a medical card. We’re lucky we’re not sick, but if you were you’d be dead, thinking twice about visiting the doctor. And then you see people in five-bedroom houses on social welfare, paying 80 bucks a month to live in Bray. And these guys are having their annual holidays et cetera. We’re paying for that.”

Miriam nods. “That annoys me big-time. People who haven’t worked a day in their lives, whose parents never worked, all getting money to live, getting unmarried this and social that. I’m not entitled to anything. We don’t need anything – touch wood – but we’ve had to tighten our belts big time.”

O'NEILL, FROM AMÁRACH,has seen this resentment "bubbling up" against groups perceived to be insulated. "A lot of those on social welfare would be seen to be relatively insulated. They're not enjoying the life of Riley, but there was a boost to social-welfare payments in the boom. Some of that has been reversed, but by no means all of it. We do a lot of work with retailers, and they will all say they can't get any full-time staff. Why? Because everyone wants to work part time: they're allowed to work 20 hours a week and keep the social welfare, and why endanger that?"

It is true that the budgets since the bust have been what economists call highly progressive. “That means that, in net terms, the Government has taken rather more from the top and the middle than from the bottom,” says Prof Nolan of UCD. The fact that pensions haven’t been cut – despite falling wages, lost jobs and cuts in working-age benefits – is “unusual; pensions are distinctive in having been exempted”.

Meanwhile, since 2009, the broad middle, “the ones who have to prop up the entire system in terms of paying tax”, in the words of O’Neill, has been hit with health and income levies (subsequently bundled into the universal social charge), increased taxes via reduced credits, cuts in child benefit and a halving of the early childcare supplement, plus household, water and broadcasting charges coming down the line.

Has anyone avoided the squeeze? “It depends on the job,” says Miriam, who is married to Ronan, a hard-hit estate agent. “I know a man who works for a semi-State company while his wife runs her own teaching business. I definitely don’t feel they’ve been hit the way we have. I have other friends where there is one income in the house but it’s big enough to mean she doesn’t work outside the home. Now he’s taking early retirement because it was going to affect his pension. I don’t see that they’ve been hit nearly as badly as we have.”

Nolan believes such anger reflects “the general fact that people can very easily misperceive how well they’re doing in relation to others, and that’s probably carried into the bust and the notion of who is bearing the pain”.

And where is the anger of the broad middle? Asked for positive aspects of the bust of the past few years, several of our group mention “more honesty”, “fewer pretensions”, a greater willingness to admit that certain treats are not affordable. “As a family, we’ve grown closer, more involved, and we all talk about the state of things,” says Miriam.

“Prices are less crazy,” says Dervla. “Bottles of wine for a fiver,” says Donal.

Ronan bucks the trend by suggesting he has felt “richer” in this recession than in previous ones. “We have a better infrastructure . . . the country has progressed.”

The truth is that, for all their disappointment, none of them seems particularly angry or ready to storm the gates of Leinster House. “I couldn’t be arsed,” says Cathal. “It would have no impact. Nothing ever comes of it.”

Are they just too weary trying to make ends meet, too disillusioned to muster up real indignation? Is there a certain sheepishness about reckless spending in the boom – such as Donal’s friends who went to Bulgaria, couldn’t get a late pint and bought the pub? Or have the cuts not bitten quite enough?

O’Neill believes there will always be a limit to any bubbling resentment in Ireland because the middle classes are now dominated by the public sector. “And why would they rock the boat? Far from it . . . You will never have a mass middle-class political swing here for that reason.”

Cummins is upending his 30-year professional life to work on a technology project, in the hope that it will provide an alternative income stream. Breytenbach, who is 54, is about to embark on a psychotherapy degree for the same reason.

“But the atmosphere we have in this country is killing aspiration and ambition,” says Cummins. “I feel like we’re medieval serfs, in serfdom to those German banking overlords, and it’s just drudge, drudge, drudge. It’s like the people in the Famine working to pay the landlord, stuck eating potatoes while the beef and wheat were sent to pay the rent. Is that really where we’ve come to, a case of going backwards when you made the steps forward?”