“Across OECD countries, which include most of the big economies in Western Europe and North America, the 10% of highest earners have increased their income by a third more than middle earners. In the UK, more than a third of middle-income households ‘report having difficulty making ends meet’, says the OECD. In the United States over the past three decades, the top 1% of earners have increased their slice of total annual income from 11% to 20%.”
The fragility of middle-class household finances isn’t just about income:
“The report, Under Pressure: The Squeezed Middle Class, says that totems of middle class family life, such as access to housing and higher education, have become increasingly expensive.
“The rising cost of property, in particular, has outstripped the growth in income, with parents worrying about the housing prospects for their children.”
Given the ease with which rich avoid tax, the squeezed middle fear that they will be squeezed even harder to pay for a tax-funded redistribution of wealth to the poor.
And whether they pay for it or not, I suspect that people on middling incomes (i.e. the majority of the working population) resent redistribution to the poor when it pays for lifestyles not dissimilar to their own. This isn’t snobbery so much as the sense of unfairness that people feel when the things they have to work for are given to others for free.
I wonder if trends like the expansion of higher education, competition for affordable housing in expensive cities and the erosion of some mid-level occupations is having the effect of pushing the classes closer together – both physically and in terms of socio-economic status. One might have thought this would encourage solidarity, but it could be having the opposite effect – undermining popular support for focusing government assistance on the poorest people.
It is usually assumed that a weaker, less optimistic middle class is bad news for the established parties of the centre-Right. On the one hand, angry older supporters defect to the populist Right; and, on the other, the conveyor belt of prosperity that would otherwise turn young radicals into middle-aged conservatives grinds to a halt.
And yet the Left needs to watch out too. Right now, their ranks may be swelling with the disaffected children of the middle-class. Indeed, by holding out the prospect of change to Generation Rent, the likes of Jeremy Corbyn and Bernie Sanders might just find themselves in power. However, what this new Left would be expected to deliver in government wouldn’t just be a bigger welfare state, but a middle class welfare state. That won’t be cheap and they’ll be expected to pay for it without middle-class tax rises.
Yet with the wealth of the rich never more mobile (and alternatives like Modern Monetary Theory being, let us say, unproven) a Left-wing government would have to rely on borrowing and thus the confidence and goodwill of the money markets.
A corrupted capitalist system is close to putting the radical Left into power – and yet it is on that system that the Left in power would have to depend.
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