IMG_1271

The Oxford English Dictionary defines the middle class as “The social group between the upper and working classes, including professional and business people and their families”. However, this definition loses usefulness depending on both who you ask and where you ask it. According to many modern statistics, it defines anyone from the Indian household earning the equivalent of $8 per day (Meyer and Birdsall, 2012) to the American office worker raking in more than $100,000 per year (O’Brien and Williams, 2013).

In developed countries, the middle class seems to be a dying breed. As an onlooker, it seems that the nightmare of the working class is happening as we speak – and as Marx predicted, the rich are getting the richer, and the poor are getting poorer (Marx, 1887). While this is happening, it looks like the divide in the centre of these groups is ever growing. But what is happening to the middle class? Where have they gone?

One variable which can be attributed to this is the rapid progression of technology (as can be seen in Moore’s Law which states that roughly every two years, processing power will double, which he predicted in 1965). For the working class, bricklayers and bartenders could never be replaced with machines. Neither can rock stars or surgeons. However, what is stopping an average accountant from being replaced with something more efficient and less likely to make mistakes? You don’t even need to pay a machine a salary. A recent example of this can be found in London’s Underground. They plan to close ticket offices in favour of ticket-selling machines (Transport for London, 2014), which would remove around 750 jobs from the British economy (BBC, 2013).

So where are these people working now? The growing unemployment rate hints that perhaps a number of them simply haven’t found work yet, and Diamond wrote that many have been forced into part time jobs to compensate (2013).

Image sourced from OECD Development Centre (Kharas, 2010)
Image sourced from OECD Development Centre (Kharas, 2010)

But what does this mean as a whole? Most obviously, if these previously affluent people have less money to spend, then they can consume less when historically consumer spending has been the driving factor of economic growth (Stiglitz, 2009). Stiglitz also argued that the disappearing of middle class influences not only the financial sphere, but affects many other spheres of life too. For example, on education he wrote: “The ‘hollowing out’ of the middle class means that many Americans cannot afford an education for themselves and their children.”

A member of New Economics Foundation, David Boyle, warned that if in the next 30 years housing prices continue to grow as fast as during the previous 30 years, most of the people from the middle class won’t be able to own their own house because an average house in Britain will cost £1,200,000 (Knapton, 2014). He also predicted that the middle class will fail to keep pace with the enormous price increase – people from the classical middle class will be unable to pay rent so they’ll be forced to take on more jobs to pay for their needs and less time for their hobbies, children, families and friends. He argued that people from the middle class have to ‘wake up’ and create a new political movement, because in next 30 years British society will consist of a narrow elite class and a huge mass of proletariat.

By: Maria Homolova

References:

BBC News, 2013. London Underground in 24-hour plans as ticket offices shut. [online] Available at: <http://www.bbc.co.uk/news/uk-england-london-25025888> [Accessed 22 November 2014].

Diamond, D., 2013. ‘Why The ‘Real’ Unemployment Rate Is Higher Than You Think’. Forbes, [online] Available at: http://www.forbes.com/sites/dandiamond/2013/07/05/why-the-real-unemployment-rate-is-higher-than-you-think/ [Accessed 22 November 2014].

Knapton, S., 2014. Middle Classes will Disappear in Next 30 Years Warns Government Adviser. [online] Available at: http://www.telegraph.co.uk/culture/hay-festival/10860796/Middle-classes-will-disappear-in-next-30-years-warns-Government-adviser.html [Accessed 22 November 2014].

Marx, K., 1887. ‘Capital: A Critique of Political Economy, Volume 1’. Progress Publishers, Moscow, USSR.

Meyer, C. and Birdsall, N., 2012. New Estimates of India’s Middle Class. [pdf] Centre for Global Development. Available at: <http://www.cgdev.org/doc/2013_MiddleClassIndia_TechnicalNote_CGDNote.pdf> [Accessed 22 November 2014].

O’Brien, R. and Williams, M., 2013. ‘Global Political Economy: Evolution and Dynamics.’ Palgrave Macmillan, London.

Stiglitz, J., 2009. ‘The global crisis, social protection and jobs.’ International Labour Review: Geneva

Transport for London, 2014. Ticket offices – questions answered. [online] Available at: <http://www.tfl.gov.uk/campaign/tube-improvements/the-future-of-the-tube/world-class-customer-service?intcmp=22072> [Accessed 22 November 2014].

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s