As we approach President Obama’s Second Inauguration,
why do I have this overwhelming feeling that the Middle Class is dead?
In both the UK and the US. And that the major political parties in both
countries are complicit?
It’s a feeling which has been nagging at me for some time now. But it
began to crystallize this past week when I read a series of newspaper
articles:
- We are told that the US economy is almost back to its
‘historic’ regular annual growth of 3%, with stocks about to break
through to a new record. Yet, unemployment among we mere minions
remains high.
- At the grocery co-op where I have now worked for seven
years (silent scream), sales reach new heights, week-by-week, and
talk of three new stores electrifies the air – but my annual pay
raise remains a pittance.
- All around us, we are told that the union-created US Middle Class is dying. But the 1% continue to thrive.
- Daily we read of the billions of dollars in
settlements that banks are having to pay in penalties for their
various malfeasances leading up to, through and after the Great
Banking Crash of 2008. Yet, bank stock prices shudder only a
ripple. Huge bonuses are back. Dodd-Frank has no teeth. And no-one
cares.
- I regularly read the culture sections of The New York Times,
and various fashion and lifestyle magazines, just to see what are
the trends. And what I see is fashion extolling the virtues of
glamour – in the middle of a recession which still bites for
ordinary working folk. Luxury cars. Property in the Hamptons, going
for gazillions. Who is this aimed at? Because, for sure, it isn’t
intended for me and my mates.
Then, my eye alights on a piece written by Adam Davidson in the
NYTimes.
Adam almost always comes up with cultural and economic analyses that
start out spot-on, and then completely lose themselves in spot-off.
On this occasion, he is wondering what is causing the change in
consumer buying habits. He has noticed that the predilection of the
Middle Class in the Seventies and Eighties to buy in cheap and in bulk
(Sam’s Club, Costco) is dwindling. To be replaced by a tendency to buy
more expensive, more consumer-friendly and more specialized. He cites
local and organic produce and Tide-Pods.
Right. We’re on my territory now. He has my attention. But then his
reasoning goes all to heck. Adam claims that the reason is that the
Middle Class, due to the recession, are still having to work long hours,
and do not have time to buy in bulk any more. Nor to separate their own
portions of food and detergent. So, it is worth the extra pennies to
have someone else prepare the portions. And, at the same time, no-one
can afford to be ill. So, we eat healthier.
Hmm.
No, Adam. Sorry mate. I know. I see it every day. I work in a store
that specializes in organic and Do-It-Someone-Else portions. The folks
doing the latter are not Middle Class. They are a step up. Not quite 1%.
More 3-4%. Annual salaries of $200,000 - $400,000. In jobs which
service the 1%. Primarily computer or web-related.
They don’t buy this stuff because they are overworked. They buy this
stuff because they are nouveau riche ponces. And they are showing off.
To themselves. And because they can.
Bulk-buying is dying because these new, hmm, what shall we call them,
I know, Middle Upper Class. Or MUC (Muck). The new MUC wouldn’t be seen
dead in Costco. Let alone Sam’s Club.
The folks who buy cheap are ordinary working folks. Because it’s all
they can afford. And they don’t buy bulk, because they don’t have that
much cash at any one time.
Well. Seeing as we’ve just got past the Twelve Days of Christmas,
I’ll say this observation led to a personal epiphany. I’ll spare you the
yelling, screaming and staining of the living room walls. And leap
straight to the thoughts that followed.
And bear in mind I’m still thinking as I write. As Daniel Day-Lewis
said in ‘Lincoln’ (may that terrible and contrived disaster win only
Razzies) – “I’m too lazy to stop writing”:
The 1% drive the economies of the US and the UK. I’m not talking
trickle-down. So keep your hair on. Bugger all trickles down. That’s the
point. But what it is that the 1% does, accounts for most of the dollar
amount in the economy. Frankly, in economic terms, Great Britain has
been reduced to the City of London, surrounded by a rather quaint
tourist attraction called ‘England.’
The same is true (at least for the moment) with the emerging
economies in the rest of the world. BRIC, and the countries close behind
them – Bangladesh, Thailand, Egypt, Turkey, et al.
These are the folks buying the $1.2 million Bugatti hatchbacks, for
the wifeys to take the kids to the faux grocery store. These are the
people shopping at Bal Harbor. Buying villas in the Caribbean. And
driving the fashion world’s obsession with old-style glitter and
glamour.
Now, these folks need services. And those (everything from computer
services to fashion to airline pilots) are provided by the new MUC.
These guys and gals can’t swim with the sharks. They can’t donate
millions. Or buy jetliners. But they can ape the lifestyle.
So, they buy the expensive brand fashion copies from Saks Fifth. They
do Porsche, not Bugatti. And they want all that personal service that
makes them feel grand.
Enter the old Middle Class. We poor buggers who are still struggling
to pay off student loans. Teachers losing their jobs through budget
cuts. Doctors getting hit by Medicare belt-tightening. College graduates
mowing lawns to pay the bills. And some, who have accepted this might
be a permanent change. And are going self-employed. Dreaming up niches
to serve the new MUC. But at a much lower pay grade. Personal physical
and motivational training is a favorite.
After that, what’s left? Well, the working folks. The working class.
But, I hear you say, what of aspiration? What of all this talk by
political parties on both sides of the Atlantic about wanting to support
folks in their aspiration to work hard, play fair, pay in, get out,
climb up, better life for kids, landing on Mars?
Bollocks. Not going to happen any more. And the pols don’t want it, either.
In the US, the myth is that the Middle Class there was created by the
unions. Not so much in the UK. But the end result on both sides of the
pond was the same. Out of the bipolar societies that existed prior to
the Industrial Revolution (rich, poor, and some grasshoppers), grew a
Middle Class, which was needed to provide middle management to run
industries. White collar. Skilled blue collar. And the services to
support them. Family GP. Family lawyer. Family banker – yes, they used
to exist. Etc.
The essence of the survival of the Middle Class was the recognition
that they aspired to a lifestyle working folk could not afford, ever.
But they couldn’t pay for it up front in cash, as did the rich. And so
developed the whole concept of pay in now-get out later services.
Especially for public services, like education, pensions and now,
health.
But those days are over. Forget how we got here, or why. But the 1-4%
don’t need pay-in. And they don’t want to pay the taxes to give it to
others. But, I hear you say, surely they want to keep the Middle Class
happy, because they represent market and labor? Not no more.
The 1-4% can find both elsewhere in the world. Industry is dying in
the US. It was declared rigor mortis some time ago in the UK. The 1-4%
no longer need overpaid, underworked white collar or skilled blue
collar.
But surely the pay-in schemes still exist? Nope. They are under daily
attack from budget cuts, at both national and local level. I owe an
apology to FB mate, Chris Telesca, with whom I fenced the other day
about Obamacare. After which I read that, under Obamacare, insurance
premiums for the self-employed and middle-level payees (the classic
Middle Class) are about to go up by double digit percentages. And this
wasn’t foreseen – or worse still, deliberate?
Without a doubt, the next step in ‘fiscal prudence’ will be the
re-introduction of means testing. Which will almost certainly reduce the
provision of pay-in services only to the very needy. In turn, bringing
the old Middle Class down to the level of other working folk. Which
leads me now to re-label the old Middle Class as the new Upper Working
Class.
What of the unions? The folks who created and surely would now
protect the US Middle Class? Well. As goes manufacturing industry, so go
the unions. And unions in the US are becoming ever more irrelevant. But
don't the Democrats rely on them during Presidential Elections? Nope.
Not any more. Two successful election efforts by Barack Obama put paid
to that myth.
But hang on, what about all those political parties (cf. British Tory
rebrand) yelling about Jobs, Family and Education for the Middle Class?
Oh yes. You can have a college education. But unless you intend to sell
out to MUC (at which point law firms, investment bankers et al will
happily pay off your loan as a golden ‘hey there’), then you’re stuck in
penury for most of the rest of your working life.
Jobs? Why would any government spend money from the dwindling public
piggy bank to create uncompetitive jobs? When they can get election cash
from the 1% in return for tax breaks to allow the 1% to export jobs to
Myanmar?
Family? Ha. Take a good long look at how benefit reform is helping
Middle Class families in the UK. For sure (and I applaud it), there may
be better and more sensible coverage for the disadvantaged, without the
welfare trap. But the Middle Class are getting razed.
Their ‘benefits’ are being taken away, one-by-one. Child benefit has
already gone. And in the past few months, a new scheme began, under
which every single employee is having to fork out a monthly amount for
their own private pay-in pension plan, to supplement the state pension.
Expect this formula to become the template for benefit ‘reform’ in the US.
Ah ha. I hear you say. But what about the Democrats? They’ll fight
for the Middle Class. They will continue to work to keep in place a
system that allows social mobility from working to Middle Class. No,
they won’t.
First, the money isn’t there. Secondly, the votes aren’t there. We
just had the most polarized Presidential and Congressional Elections
since 1864. All the talk was of the 1% buying the result. Well, that
didn’t happen. But what did happen was that, against the flow, Romney
got 47% of the vote. And Congress remained Republican – and Tea Party.
This wasn’t the work of the 1%. This was the work of the 3-4%, silently,
but determinedly, voting to maintain their newfound lifestyle.
The new MUC, risen from working folks and the old Middle Class, safe
in their gated communities, educated but not worldly-wise, nouveau riche
but not noblesse oblige. Guilty. Self-contained. Selfish. They don’t
want to share. They don’t like giving back. They don’t like taxes. And
they don’t give a fig for maintaining the Middle Class, or offering a
leg-up for the working folks. And here’s the rub. They will only become
more potent as a voting base.
I don’t care about Dems saying that Hispanics and Asians are natural
Dem voters. No, they aren’t. Everything about their culture will have
them working their asses off to see their offspring aspire to MUC. If
you want to know what America might look like with third generation
Hispanics and Asians, try Singapore, South Korea or Texas.
The Dems are going to be fighting hard to maintain any voting base
they can find. And there is the dagger in the heart of the Middle Class.
Why would Dems want to support and extend a new reality that has folks
aspire to leave the working ranks and join the Republican MUC?
It is my view that you will see Dems increasingly working towards
keeping their voters as a client base. As the British Labour Party did
in the Seventies and Eighties. Oh. It will be wrapped up all pretty in
language about re-discovering our purpose. Putting working folks first.
But what will transpire is a Democratic Party focusing its advocacy on
directing the reduced public purse towards those same working folk, and
away from the Upper Working Class.
If you allow a situation where the UWC can no longer receive benefit
or the leg-up needed to meet aspiration, they slip back down the salary
scale, to find themselves shopping at Dollar General, with every other
working person. And that’s where the Dems of the future will want to
keep them.
So. Even though we may have a short-lived hiccup of Republican
hand-wringing. Which we already have had in the UK. But Dave Cameron
chose hugging a hoodie over wringing his hands. We will move to a
bi-polar political situation where a right-wing, tax-hating Republican
Party (or British Conservative Party) will regularly face off against a
newly-energized, worker-loving/trapping social Democratic Party (or
British Labour Party of old). And the Middle Class will be a footnote in
the history books.
So. What to do? For myself. I learn from Occupy. Or my lesson with
Occupy. Forget the system. Don’t waste time trying to bring it down. Who
cares? Become self-sufficient, and live outside of the system as much
as possible. Oh. And hope that your self-penned pop song does viral …
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