What is "Middle Class"?

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Túrin Turambar
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Post by Túrin Turambar »

Prim wrote: This is probably a semantic disagreement. Americans don't tend to talk about any group as the "working class." I would guess because it sounds archaic and elitist, implying that the classes above "the working class" don't work but live on capital (as used to be the case to some extent in European countries).
Well, a recent release of Working-Class Hero by an American band has been very successful. And wikipedia does have an article on the working class in the United States :P.

In all seriousness, I think that this issue runs deeper than semantics. Excuse me if a get little Marxist and class-warrior, but I suspect that the idea that blue-collar workers are really middle class originates with the ‘true’ middle class itself.

The reality is that people with college educations making 60k or more a year in the U.S. are a privileged minority. A sizeable minority (according to 2005 census bureau data, some 30% of employed Americans make more than 50k), but still a group much closer to the top tier of society than the bottom. Not only are they personally wealthier than average, they have the ability to pay for tertiary education for their children and accumulate some capital to leave them when they die, giving them a significant advantage. Plus they are better-educated, better able to deal with the law, banks, and the like, and far more politically powerful than those below them. After all, most politicians come from such a background.

However, people don’t like to think of themselves as being better off than average, particularly if they don’t seem to be wealthy compared to the people around them. In Australia, for example, we have the phenomenon of people living in households with three-figure incomes identifying themselves as being ‘working-class battlers’. The American middle classes have gone the opposite way – they admit that they are middle-class, but insist that the bloke in the hard-hat digging a hole in the road for 25k a year is too. It plays into what I see as being the middle-class American fantasy that America is a classless society. Everyone is middle-class.

That isn’t to say that income inequality hasn’t increased – it has. Nor am I saying that people on joint household incomes of 80k or more aren’t finding it harder to pay for education for their children, housing and healthcare. But I do deny that such people have been hit harder by the recent changes in the economy than the old blue-collar working class, and I am also deeply suspicious of any attempt to deny that a distinction between those groups exists. For unemployed auto workers in the outer suburbs of Flint, Michigan, or rural African-American day labourers in Bullock County, Alabama (where the illiteracy rate is 34%), paying a mortgage and college fees for children is not exactly a major concern. And they don’t have their interests represented by politicians no anywhere near the degree that the mortgage and college gang does, either.
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Cerin
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Post by Cerin »

I think it's shocking, or should be shocking, that 1% of the people in this country earn 25% of the income. And now with the ability to funnel that money into elections without limit or disclosure -- it's really scary. How can that be regarded as democracy in any sense of the word?
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anthriel
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Post by anthriel »

Cerin wrote:I think it's shocking, or should be shocking, that 1% of the people in this country earn 25% of the income. And now with the ability to funnel that money into elections without limit or disclosure -- it's really scary. How can that be regarded as democracy in any sense of the word?
That is kind of bizarre. :shock:

I assume you are referring to the data in Dave's link, which I just read. The author says that the very rich are less likely to spend tax savings, which is interesting. Really? So they tend to save that money?
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Post by Dave_LF »

Yes. You can really only spend so much money on yourself per year. If you're already sitting on hundreds of millions of dollars (to say nothing of billions), your spending isn't going to increase just because you get a few million more. Also, I'm sure miserly personalities are overrepresented among the superrich.
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anthriel
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Post by anthriel »

Well then they won't miss it if we just tax 'em hard. :)
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Post by Griffon64 »

Dave_LF wrote:Also, I'm sure miserly personalities are overrepresented among the superrich.
That's one way to accumulate the stuff, that's for sure! ;)
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Túrin Turambar
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Post by Túrin Turambar »

The new leader of the U.K. Labour Party, Ed Miliband, has promised to campaign in the interests of the ‘squeezed middle’. I read a blog post by BBC analyst Nick Robinson on this statement that I found interesting, and raises many of the same questions that Miliband’s comment raised with me:
We know Ed Miliband's standing up for them but who exactly are they?

The Labour leader's phrase "the squeezed middle" is deliberately vague. It has the same widespread appeal as "hard-working families who do the right thing" - the phrase William Hague once used.

Pretty much everyone - bar, perhaps, the very poor and the very rich are meant to think Ed's talking about them. What's more, the phrase has the advantage that newspapers tend to replace it with the more reader-friendly words "middle classes". This morning's Telegraph, for example, implies he'll stand up for their readers even though he said no such thing. What's wrong with that, you may ask? After all, he's a political leader trying to re-build a widespread coalition of support.

The problem is that, as someone once said, to govern is to choose and when there's no money to spend you do really need to choose.

So, it matters whether Ed Miliband's standing up for people on £50,000 a year who stand to lose their child benefit or those on £40,000 who stand to lose their tax credits - both, incidentally, statistically part of the rich "few" rather than the poor "many" - or those he met in Tescos in Dudley yesterday who earn £6.81 an hour and had the same views about those on benefits as Howard Flight (even though they didn't use the word "breeding"). If he intends to stand up for them all at the same time that may tell people something about his willingness to make choices.

When I interviewed Ed yesterday, he refused to define his terms beyond saying it didn't mean millionaires and that everyone knew what it meant anyway. This morning on the Today programme he was pushed again by John Humphrys. He explained that he meant those above and below the median salary and, in particular, those earning less than £45,000 and, therefore, on the basic rate of income tax. He went on to say that the words "squeezed middle" and "middle classes" meant something different.

This is the group who John Healey, the man who topped the shadow cabinet elections, identified as "one third of the population who manage with a household income either side of the UK's £22,000 median... more than 7 million families with an annual income between £14,500 and £33,800; 14 million people working hard for low and modest wages." Healey wrote that:

"The squeezed middle seem stuck in no man's land. Too poor to get the best from the market, too well off to claim state benefits. Not wealthy enough to get a mortgage, not sufficiently vulnerable for social housing.


We too easily allow a mobile, metropolitan class to skew our understanding of society. Too many of those in the media, political and public policy world take people earning 40 or 50 thousand pounds or more as typical of 'the middle'. The real squeezed middle are overlooked by the press, and overlooked by the modern Right."


This is the group Ed Miliband's really talking about but, spotting the danger of saying so this morning, he quickly reverted to saying that he meant everyone who wasn't rich and wasn't poor and were, after all, middle class.

Many wiser than me who've slogged through long years of opposition - whether on the Tory or the Labour benches - will tell you that Ed's wise not to pin himself down to policy positions early, that opposition's a marathon and not a sprint, that being seen to listen and learn is the most important priority after an election defeat.

However, definition matters too. At the moment Ed Miliband's struggling to find it.
I’m keeping an eye out for some American articles on this subject as well, but some of the basic points are the same.

As a key point, I think that many people simply don’t realise what a median or average income is. After all, we tend to associate most strongly with those from similar backgrounds to us, who live in similar neighbourhoods and make similar amounts of money. I’ve referred to this graph before, but I think it is very striking. The median annual income of an American over 25 years of age is a little over $32,000, while the median income of all Americans who worked for wages in 2005 was $28,567[/url]. And even that is close to twice the likely income of someone on a full-time minimum-wage job. I would be willing to bet that many middle-class people would expect those figures to be significantly higher, and people on 40k and 50k would be surprised to see that they are, in fact, privileged – people of well above-average wealth in one of the wealthiest countries in the world.

Miliband can be deliberately vague for this very reason. People on £30k, £40k and £50k are all probably going to be thinking of themselves as ‘the squeezed middle’. They’d certainly be middle-class, even though Miliband acknowledged (rightly) that middle-income earners are different from the middle classes. I imagine that Labour is more secure with voters in the sub-£30k range, although plenty of them would think of themselves as being the squeezed middle as well.

One of the reasons, I think, why Americans in particular tend to be fuzzy on these issues is that social class and income is more strongly tied to geography. Most of America’s poor live in the rural south and Appalachia, where they would be unlikely to come into contact with middle-class suburbanites from the coastal cities. As such, those people could go on thinking of themselves as being struggling average-income earners. Another interesting wikipedia article is this one on America’s poorest counties. Seventy counties have a median household income less than 22k, and all are found in the same twenty-four states (which do not include any states on the west coast, New England or the Great Lakes). Hell, the median household income (that’s household income, mind) in Starr County, Texas, is seven thousand dollars per year.

This is my issue with this whole debate. I don’t like to sound like I’m lecturing, but the people on this board seem to view social class, if they view it at all, is being a case of them (squeezed and under-represented) against the super-rich. But to many of your fellow citizens, you are the rich.
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Post by axordil »

Yet we have more in common with those making less than those making more, because there's a difference in kind: wage-earning versus investment income. That's the great divide. A downturn that means not buying a new car for a year at the top end of the spectrum means layoffs and foreclosures farther down. The only difference is how much savings one can burn through to put off collapse.

Ultimately it's control, not earning power, that's the difference. Even a well-paid wage slave is always one corporate decision from economic crisis.
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Post by Holbytla »

Disregarding for the moment the semantics of the discussion, would it be a fair statement to say that this country is heading towards a have and have not society and that the have nots are increasing?

Lord_Morningstar
the median income of all Americans who worked for wages in 2005 was $28,567
The poverty level for a family of 4 in the contiguous 48 states and DC is $22,050. http://aspe.hhs.gov/poverty/09poverty.shtml

In 1980 terms, a $100 would equal $264.32 today. In other words, you would need to earn 2.64 times as much money today to have the same buying power you did 30 years aago.
http://www.aier.org/research/worksheets ... calculator

If I did this correctly, then in 1980 you would have earned $12,400.00, and if you multiply that times 2.64 to reach today's level of cost or buying power then you would need to earn $32.736 to remain the same. Yet the median income is $28,567.

In a long convoluted way, I am saying that income earned today by the average American is not concurrent to what it was 30 years ago. Unless you are among the very wealthy. In which case the very wealthy (top 1%) in 1980 garnered less than 9% of the nations total income, where as today the top 1% garner 23.% of the nation's total income.

Minimum wage, average wage, wages of the bottom 50% of the country, none of them have kept up, in terms of buying power, with what it was 30 years ago.

Compare the wages of a meat packer 30 years ago to what it is today.
There are lots of examples out there where wages have decreased over the years, while the cost of living has increased. Maybe a meat packer never qualified as middle class, but making $30,000 - $40,000 in 1980 sure put him alongside them. It is conceivable that the median income will rise over the years while the distribution of that income favors the top few percent and not the middle or bottom earners.
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Post by Griffon64 »

Random thought - and it is only a thought, I don't have anything to back it up with as far as numbers or research goes, and it is also a small portion of devil's advocate - but here goes:

Isn't the "average" American, the middle class worker, also responsible for the decline of the middle class? The rich can't do it all by themselves, they need the consent of the many. And that consent is given, to some extent, every time someone who shops at, say, WalMart, prefers cheap imported trinkets over more expensive locally made ones, buys thin, low-quality ( but cheap! ) imported garments instead of more expensive, locally made ones, etc. Buys vegetables made cheap by illegal immigrant labor, has a gardening service that employs illegal immigrants - but is cheap! - and so forth. Every time the masses demand cheap, businesses will supply it - and it will be at a cost to the masses. One can make an argument that the higher tiers should give up all but a sliver of profit and absorb the costs of keeping labor local and lowering prices, ( and they probably should to some percentage, given the shift in wealth allocation to the top 1% ) but then one probably shouldn't argue that one's 401(k) balance and other investments should give any yield that prepares one for retirement. That money is invested in those businesses and one won't be happy with a mediocre profit for one's investments, so why should other people be? One can't have one's cake and eat it, the saying goes. Is greed at the "everyman" level more acceptable than greed at the elite level - is it simply being good with money and making sure one gets one's own, while the greed of the higher classes is bad greed? I dunno. I think it is worth remembering that there's probably a facet of the problem rooted with oneself, and that solving it would require change everywhere, including in one's own modus operandi. Any time I come across an argument that seems to angle towards exempting the group I'm in from having a hand in an averse situation, I tend to be suspicious of it. The world has too many interlocked pieces for such things to be common.


Standard disclaimer: I went through the whole thing and changed all the "you" to "one" and so on, so sorry for how it reads, even more convoluted than my normal writing, :D because I don't want anybody taking generic you as personal you. I'm speaking generically, not addressing any specific person.
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Post by Holbytla »

Oh I'm pretty sure it comes down to a certain amount of greed by all parties.
And I know this isn't a worker's paradise and we live in a free market society.

Still there are laws that enable people to organize and laws that provide some worker's rights. It is kind of difficult for the average guy to take on large international corporations and try and exact a fair wage and expect them to realize they are supposed to give back to the community in which they operate, but it can be done.

I do think it would be helpful if the pols would listen to their constituents more than the lobby groups though.
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Post by axordil »

Fifty years ago, a greater percentage of income went toward food purchases. Now we have cheap food--and we get pretty much what we pay for. We also pay for a lot of it in our tax-based subsidies to large agribusinesses, but that's another topic.

Fifty years ago, most families did fine with a single wage earner. It was almost always the husband in a married couple, but that's more or less irrelevant: one person could support a family comfortably. Nowadays you see that either at the bottom of the pyramid, with single parents, or at the top, where investment income starts coming into play (or where you have a single highly paid professional, often not in a classic employment situation: doctors, lawyers, financial services people).

Fifty years ago, the average size of a suburban house was significantly smaller, and said house was significantly closer to the middle of a metro area.

Fifty years ago you had appliances repaired. Period. You only replaced something when it burst into flames. Maybe.

Fifty years ago the highest marginal tax rate on income in the US was twice what it is now.

All of these are connected factoids. The changes between now and then all have something to do with the decline of the middle class and the upswing in consumption we are reaping the "benefits" of now.
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