Getting stuck in the middle with you
Most wage earners now prefer to define themselves as being middle class, writes FINTAN O'TOOLE
BEING MIDDLE class is a bit like being an adolescent. Once upon a time, adolescence began at 13 and ended at 17. Now, it has expanded at both ends – it begins anytime after 10 and can continue to any age up to 30.
Likewise with ideas of what it is to be middle class. Many working-class people like to think they’re middle class. But many rich people claim the same status too. Not the least of the virtues of last week’s Squeezed Middle series in The Irish Timeswas that it gave some substance, and some hard edge, to a concept that has been expanded to the point where it ceases to mean anything.
Once, nobody wanted to be called middle class – the words (or their dread synonym, bourgeois) were spat out with the same contempt as that other marker of being terminally uncool: suburban.
But to take the most extreme case, that of the US, the notion that almost everyone is middle class has become part of the language. Mitt Romney recently claimed that 95 per cent of Americans are middle class. A recent New York Times/CBS poll found that 20 per cent of those earning $15,000 (€11,300) a year defined themselves as middle class. But so did 40 per cent of those making more than $100,000 a year. Which raises the obvious question: what use is a social category that can include both those living below the poverty line and those on very comfortable incomes?
Well, in fact, it’s very useful indeed – if you want to obscure something very big and very bad. The big bad thing that’s hidden in the increasingly blurry notion of the middle class is the great con job of our times. It is the way the rich have been able to grab an ever larger share of the fruits of economic growth.
For at least 30 years after the second World War, western societies took it for granted that, at the very least, the incomes of working people would keep pace with economic growth. (The argument, indeed, was whether to go further and radically redistribute income towards the bottom.) But this link has been shattered. The rich – especially the very rich – have grabbed a hugely disproportionate share of the new money.
The squeeze on middle-class incomes highlighted in the series isn’t just a temporary symptom of the great recession. The long-term trends in income distribution throughout the western world are stark.
The real middle class is made up mostly of wage earners – and wage earners are the ones who’ve lost out. Author Stewart Lansley has estimated that, if the distribution of income had remained as it was in the 1970s, wage earners in the UK would now have an extra £100 billion (€119.4 billion), while those in the US would have £500 billion more than they actually do. But this trend isn’t just an Anglo-Saxon phenomenon. In Germany in the 1990s, gross domestic product (GDP) per capita rose by 1.3 per cent, but median pay rose by 2.3 per cent. But from 2000 to 2007, GDP rose by 1.5 per cent and pay by 0.1 per cent.
So how have those at the top gotten away with this? The logic of democracy in countries where the overwhelming majority are wage earners ought to favour that majority. But it hasn’t.
There are many forces at work, but one of them is the ability to persuade so many wage earners (a) that they are middle class and (b) that this class also includes many of the rich. Being middle class means you can identify with, and aspire to join, the elite. You don’t need the two things that created a fairer distribution of the fruits of growth: trade unions and the welfare state.
But – and here’s the great irony – it was trade unions and the welfare state that did so much to create the middle class in the first place. Collective bargaining power gave working families enough income to give their kids the opportunities to aspire to higher education, white collar jobs and home ownership. The welfare state gave substance to those aspirations by providing security through social housing, pensions and education – and by expanding the public sector. Jobs such as nursing and teaching provided the crucial bridges over which millions travelled from unskilled low-paid backgrounds into white-collar security.
The Irish middle class, I would suggest, is almost entirely the creation of progressive social movements: of the land reforms (heavily State subsidised) that created family farms; of the educational reforms that allowed farmers’ children to move into the professions and that created a skilled workforce for high-tech industry; of the labour struggles that won for working families a living wage; and of the women’s movement that created the dual-income household.
But the middle class that grew out of all of these movements allowed itself to be persuaded that all that matters is individual aspiration. The cost of that illusion is not just a short-term squeeze but a long-term threat to the defining value of the middle class: the belief that your kids will inherit opportunity.