Sunday, 22 January 2012

Collapse of the Middle Class?

A discussion a few days ago, and some articles I have recently read, suggest that, while the wealthy continue to expand their wealth and their grip on the organs of power through their courting and funding of the political classes, the "middle income" group is rapidly being squeezed out of existence. They have been attacked in recent years by being priced out of the best schools and forced to accept the inadequate and often utterly incomprehensible "comprehensive" schooling imposed by the champagne socialist set of the political class. This means their kids are excluded from the networks developed at the best "fee paying" schools which are essential if they are ever going to get past the glass ceilings that exist in every business.

They are also excluded from the places at the top universities which they might once have gained, because the dice are now loaded in favour of "working class" children from lower income families. Once a Middle Class background meant stable home life, a home in a nice neighbourhood, a comfortable lifestyle, access to good education for your offspring and the expectation of a good standard of living for your kids. Not, it appears, any longer.

"Middle Income" earners have been treated for a long time now, as "rich" and there fore a target for milking through the tax system. That has eroded incomes and reduced, particularly at the lower end, the disposable income these folk enjoy. The reduction in "disposable income" has meant less to spend on helping the next generation, less to spend on leisure and an erosion of their lifestyles. At the same time many in the "Working Class" have found themselves earning incomes once considered "middle class" and some have even reached earnings levels well toward the upper end of that scale. They too find themselves caught in the income trap, of working ever harder just to hold their place or defend the lifestyle they aspire to. But there comes a point at which the strain begins to tell. The harder they work, the more hours they devote to earning enough to make up for the depradations of the tax system and the ever rising costs of housing, pension provision, health care, etc., the less time they have to actually enjoy it. The strains on marriages when two careers have to be catered for, increase the problems couples face in trying to build and maintain their relationships.

It used to be the case that "Middle Class" meant having a "white collar" career, someone in management, or one of the professions. This is no longer the case, now it is more a measure of income and even that is uncertain. The gap between those in the top earning bracket and those in the Middle Income group is rapidly becomeing a gulf. Very few Middle Income earners come anywhere near the upper end of the bracket and the vast bulk are struggling to stay where they are. As for their children - well, things don't look so good for them either, in fact they look depressingly as if these young people face having to accept a reduction in their living standard over their lifetimes.

Part of the problem is that the current economic system in western society rewards the very top of the organisations, the investors and those workers in the public sector protected by padded pensions (paid for out of taxes), job security that anyone outside of the civil service can only dream of, and those who know how to milk the benefit system. With the banks and the Boards of various supermarket chains paying their top management huge bonuses and six and seven figure salaries while paying minimum wages to everyone else, it becomes clear that there is a serious inequity developing. Professionals fare no better. A generation ago they would have expected to be earning more than their "administrators" but that has been eroded to the point where an engineer is often earning less than the office "manager" - yet the engineer is key to the trade of the organisation, while the "manager" is not.  Teachers, health professionals and other "professional" workers are suffering a similar decay of their status and earnings.

Considering the situation carefully suggests that the "Middle Class" is shrinking. Incomes are being eroded, and overtaken by "labouring trades." As the Postulant remarked recently, one partner stopping working or not working, is not an option for most "Middle Class" couples, they need both incomes just to keep afloat. Pregnancy can spell disaster for their finances.

I'm not sure what the answer is, or if there is one. I do know that somewhere along the way there is going to have to be a serious reconsideration of the way wealth is distributed and the way governments constantly, and of all flavours, favour their chums. In the meantime the rich will continue to get ever richer, and the aspirations of those not able to access those high-flying careers will continue to feel the squeeze ...

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