Rethinking What It Means To Be Middle Class

Maybe it's not 'them,' it's us.

'Them' are the shadowy forces that we accuse of having stolen the dream of middle class plenitude. Could be the banks, or the liberals,  or the conservatives, or organized labor, or the corporations or whoever else we might think to blame.

But it is just possible that the big houses outside Dublin or Chicago or Sydney and the sybaritic vacations in Marbella or Cancun or Bali were historical anomalies. The three car garages and the flat screen TVs and the new iPhone every year may just be unsustainable appurtenances to an already doomed way of life. Not that it would be so bad without them: with plenty to eat, entertainment, education, cars and computers, Maslow's hierarchy of needs seems like something from a different universe, which, in a way, it was.

But it could well be that a fully functional and competitive global economy, driven by succeeding waves of technological change, is simply a place in which accumulated surpluses are going to be a rarity, at least for the foreseeable future. Which is not to say that the internet, or China or anyone else is to blame, but that as in so many other phases of human history changes take time to work their way through the economy and they extant societies they both support and reflect. Those changes affect our expectations as well as our realities - and not always positively.

It may well be that the rise of developing economies, a situation which now ranks China as a relatively expensive labor market, means that even Africa, yes Africa! is now considered a potentially desirable locale for both export and import. This all may imply that the largess to which we have become accustomed will be harder won in the future, and not as broadly distributed. That may be good or bad but it will be different and if we are looking for reasons, we need search no further than our own closets, garages and larders. JL

Paul Wallbank comments in Unconventional Economics:

Maybe we also have to change the definition of what is middle class and accept the late 20th Century idea of a plasma TV in every room of a six bedroom, dual car garage house in the suburbs was an historical aberration.
Just like the loom weavers of the 18th Century, it could well be the middle class incomes of the post World War II west were a passing phase.
Technologist Jaron Lanier says the internet has destroyed the middle classes.
He’s probably right, a similar process that put a class of mill workers out of a job in the Eighteenth Century is at work across many industries today.
Those loom workers in 18th Century Nottingham were the middle class of the day – wages were good and work was plentiful. Then technology took their jobs.
Modern technology has taken the global economy through three waves of structural change over the past thirty years, the first wave was manufacturing moving from the first world to emerging economies as global logistic chains became more efficient.
The second wave, which we’re midway through at the moment, is moving service industry jobs and middleman roles onto the net which destroys the basis of many local businesses.
Many local service businesses thrived because they were the only print shop, secretarial service or lawyer in their town or suburb. The net has destroyed that model of scarcity.
The creative classes – people like writers, photographers and musicians – are suffering from the samee changed economics of scarcity.
Until now, occupations like manual trades such a builders, truckdrivers and plumbers were thought to be immune from the changes that are affecting many service industries.
The third wave of change lead by robotics and automation will hurt many of those fields that were assumed to be immune to technological forces.
One good example are Australia’s legendary $200,000 mining truck drivers. Almost all their jobs will be automated by the end of the decade. The days of of relatively unskilled workers making huge sums in the mines has almost certainly come to an end.
So where will the jobs come from to replace those occupations we are losing? Finance writer John Mauldin believes the jobs will come, we just can’t see them right now.
He’s almost certainly right – to the displaced loom worker or stagecoach driver it would have been difficult to see where the next wave of jobs would come from, but they did.
Businesses and politicians who cater to the whims and the prejudices of the late Twentieth Century middle classes will find they have to change their message.