Who are the new working class? Or the ‘squeezed middle’? And who is left behind?

Lately, lots of people have been talking about class. I read these debates, and I kind of get what they are trying to say, but it doesn’t bear any relation to what I see when I look around. People are really complicated. I have friends who could be described as ‘working class’ but would be mortified to hear themselves described so. Friends who will identify as working class, because their grandmother once chomped on an eccles cake before she got into interior design. I don’t identify with the working class culture that I hear mythologised, I grew up on council estates under Thatcher. Work did not define those communities. It’s dissapearance did.

What I see around me, is a generation of people who weren’t born into those class boxes  Higer education has been open for quite a while-the so called working class got educated and learned to expect education. Education changing our self image but not economic status. That expensive education is now a basic requirement for all but the lowest paid skilled work.

Entire communities who would have been defined as working class, survive but are now considered deprived. Our credit based growth came on the back of the loss of industry that created work, and then excluded them entirely. Leaving little but state support. Those that stayed in those communities, viewed as having made the wrong choices. Creating the so called chav’ culture we are all supposed to despise.

Identity politics has been complicated by the economic system we have had since the late 70’s,  and the ability to rapidly share information. A complex fluid culture that doesn’t fit into tightly defined boxes and certainly not boxes people see themselves in.. Socio economic distinctions, reace, gender, sexuality and even old class snobbery still exist-but one thing unites us all.

Debt and the importance of our relationship with credit.

The invisible burden.Our place in society defined by how much we owe, or can borrow not how much we have.

THe tories use the term ‘decent hardworking people’ because everyone defines themselves as that. Well actually, close examination reveals that the ‘decent hardworking people’ the tories talk about, are in debt. The myth of ownership and individualism creating shame at the debt our economy required, that shame allowing people to be told that this economic policy is necesary.

Contrary to popular opinion, the credit boom still hasn’t played out. In a country where wages have not risen that far, house prices have. We have a personal debt bubble of 3 times our GDP. We are maxed out. It isn’t just that banks aren’t lending, people can’t afford to borrow any more.

It is the norm that a significant portion of your salary will be going to credit payments, whatever you do. Servicing the debt necessary for fear of being blacklisted from participating in our credit based society. Car payments, mortgages, credit card payments, even mobile phone contracts.

Tax credits have allowed people to ignore the suppression of their wages. And have made mortgages that shouldn’t have been considered, affordable. Low interest rates, and easily available credit made lifelong loans of 6-7 times your household income the norm. Outrageous numbers that bear no relation to what you can earn, now an expected debt burden to a family. You know you are struggling when your credit card is being used to pay your essentials not when your savings run out. Throughout the income scale. Regardless of class. Regardless of their political affiliation. People haven’t stopped spending and started saving. People have stopped spending cos their earnings are servicing their debt..

When you lose your job or get sick, the inadequacy of the welfare state isn’t the biggest problem, your mortgage and your credit cards are. The thing that will keep you in poverty when you fall, is debt. Exclusion from the credit market very difficult to undo. When you sign on, you are signing on so your credit insurance will pay, not for the measly £67 the welfare state allows you to survive on. The jobcentre keeping you in line, for your credit card company and your mortgage. Jobcentres keeping you in line for the bank.

When you look at the way earnings are distributed, you see that actually the highest earners ARE paying their fair share of tax. Those who are paid by salary. It is only when you move into the realms of company directors, payment by dividend and shares, and bonuses that find a problem. Corporation tax is where you find people avoiding their fair share- not PAYE. 

Those salaries which havent increased are paying mortgages which have. Servicing debt. Tax credits are currently subsidising house prices and wages quite a long way up the ladder. In the US this is manifesting itself with ever increasing numbers of middle class people using food stamps(helpfully administered for profit by JP MOrgan Chase) and losing their homes. In Britain we have had tax credits and relative stability- so we haven’t had to consider this. The much criticised unsustainable welfare spending subsidising this, has been one of the key protectors against the the crisis the conservatives are perpetuating. A crisis that hasn’t blown up yet.

The new working class is not flatcaps and whippets. There appear to be three distinctions. Those who keep their assets away from public hands. Those earning and in debt. And those exluded entirely.. The new working class is those paid by salary, who are in debt. It is not work that defines us, it is credit and an inability to minimise your tax obligations.

The net of undeserving, as I am so fond of saying, has never been cast so wide. Now it is all public sector workers. Teachers, professionals. Look at the relationship of the average house price to the average salary.

The so called working class and middle classs have kind of merged and just got shafted.

THe people who until recently thought they were working to provide services that were necessary, are now being told that not only have they had their wages suppressed, but they are undeserving of their pensions, their jobs, and recognition of the contribution they made. And they have mortgages and havent paid into an alternative pension.  People whose skills are no longer seen as essntial for credit based growth, no matter how essential they are for the society we live in. Our small businesses dying as banks suffocate them by withholding the credit that they are forced to treat as their lifeblood. People whose wages now need subsidy for rent, and childcare are not our lowest paid workers or just public sector, but people on average and above average salaries.

Students are protesting because their very education, is now a ticket to a lifetime of servicing debt. An average mortgage and university education will leave people who would never have imagined such an amount of money, hundreds and thousands in debt before they start. The jobs they educated themselves to do, dissapearing in favour of part time unstable jobs, that won’t ever allow them to release themselves from this burden.

I saw Elizabeth Warren talking about the middle classes in america. She defined an american middle class, by credit. By debt. And in doing so, spoke to the people who were watching with me, in a way they understood. In a way they identify themselves. In way they wouldn’t, if that description had been about class or ideology. And I realised that was what was wrong with all this debate.

We are spending so much time looking for definitions of society, that  might not exist, or have faded and become confused or make people self exclude- that we aren’t even bothering to look at society as it is now- and ask whether those definitions are relevant any more. Which would be fine, if it wasn’t leading us to ignore the very clear economic distinctions that have developed.

Those looking to redefine class as the basis for a political ‘movement’ could do worse than look at how much the country owes, in relation to what it earns. And have a think ab
ou
t what that means in terms of people’s lives. 

Anyway- this is middle of the night musings. I will read back in the morning and probably delete!haha

 

 

9 thoughts on “Who are the new working class? Or the ‘squeezed middle’? And who is left behind?

  1. "People haven’t stopped spending and started saving." : But what is the point of saving when you earn practically no interest and there is inflation too. Good article. Interesting late night musings!

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  2. Think you have something here. Credit on such a mass scale is the new normal and with the changes ahead for student fees etc is set to deepen dramatically. We should be talking more about this shift in our society. Looking forward to reading more of your thoughts on this.

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  3. The ‘traditional’ definition of working class is as true today as it ever was: "proletarians [working class] have no means of support other than selling their labour power" i.e. they can not live off their savings/investments, or the business they own. This includes labourers by head as well as by hand. Traditionally, the proletariat were also defined by their role of increasing capital. This leads to a question around public sector workers as they are not seen to either be reliant on capital or to increase it. However, in as much as they are reliant on the capital of the state, and increase the value of capital to the state through healthcare, education etc. then it may be said that they fit the definition.The working class is important in marxist theory as not only are they the producers in society, but also have been equipped by their experience and training to be able to rationally organise social labour for the benefit of humanity as a whole.The language may be archaic, but the underlying theories are as relevant today as always.Credit is only a problem if you can not repay it. The capitalist who borrows £30k on his credit card but knows [s]he can pay it off by selling a few shares or liquidating a business is not in the slightest bit bothered by it.Marx did not recognise a "middle class"; he did however recognise the "petty bourgeois" – i.e. the small business owner or craft producer, who, whilst selling goods or services in their own right, are in danger of being swallowed by the larger capitalist enterprises, and probably still have to work in their own businesses to make a profit. Petty-bourgois also applies to those who manage the apparatus of production, distribution, and/or exchange, who, whilst part of the working class by virtue of being wage dependent, have a different consciousness due to their different relationship with the means of production.

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  4. The problem with petty bourgeois and wording like that- is that actually that is where most of us see ourselves. I was a social worker- no more oppressive job tat than. Essentially removing peoples kids as punishment for poverty and its effects.And it is the ‘petty beurgoise’ who need to identify themselves as part of those affected at moment. It is a divisive term which offends and is used to denigrate those who actually dont run their busineses to oppress, and dont do their jobs to oppress- but to look after their families or fulfil ambitions. THis is problem with definiton by class and viewing of some as less desirable than others.

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  5. The language is archaic, it was written a few years ago now so thats understandable! If Marx were alive today how would he re-write it ? The layers of society Marx wrote about have melted and melded, he would need to take some time to study before re-writing. Does it need re writing ? If you/we whoever want to communicate the issues then yes. and surely we do wan tto communicate the issues.Anyone remember John Prescotts TV prog where he met "ordinary people" ? He met a young woman, he asked her about "class" she said she didnt work, shed never worked and had no prospect of doing so, was living on benefits. So, she said she must be middle class. She was a bright young woman but clearly had not read Marx! I guess most people these days havent. Language can and will alienate. We want to communicate. Think Lisas ideas/definitions will make more sense to most these days. Not suggesting we forget Marx at all, just that these "definitions" dont stand still.

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  6. Exactly. Our means of production is arguably now the money supply- this has been at core of economic policies since early 80s.

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  7. Government has been systematically transferring debt from the public sector to the private sector since the 1960s. I did a review of the relationship of public debt to home ownership – since by far the largest slice of debt that people usually have is a mortgage, home ownership is a reasonable proxy for personal debt levels. There is an almost exact inverse relationship in the UK between government debt levels and home ownership: as home ownership rises, government debt falls, and vice versa. The decline of social housing has forced thousands into debt, but we don’t regard that debt as a problem – it’s simply a way of life. But it does mean that we can’t use the economic theories and paradigms of the past as a model for today’s problems. We have never had such high levels of personal debt in our history. We have never before accepted living entirely on credit as a reasonable way of life. Personally I don’t think we should accept it. It’s a terrible way to live: while you may be able to meet debt obligations when times are good, it leaves you very vulnerable to economic shocks and downturns, price rises and interest rate increases. I’m concerned that the government’s economic strategy seems to be based on the idea that people and businesses can take on even more debt. I don’t think they can – they need to shed much of the debt they have. Cameron actually called it right, didn’t he? but in doing so he undermined his government’s entire economic strategy, so they had to shut him up. What an opportunity missed.

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