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Who are the middle class?

August 28, 2015

slice of pieOne economist recently suggested that there are as many as 156 definitions of the middle class. If this statistical potluck isn’t complicated enough, pollsters also tell us that a very large fraction of the population describe themselves as “middle class.”

You can see why politicians have made the “middle class” an election issue, but also why they might hesitate to answer the question: “Who are the middle class?”

It isn’t a contradiction for many people to feel they are in the “middle” even if their incomes are well above average or well below. There’s a certain truth to this because most Canadians share a set of common concerns that go beyond just their incomes.

You are “middle class” if you aspire to a better tomorrow, and have a hope for growth and progress in your circumstances; you are “middle class” if you are struggling with uncertainty, and worried if you and your family will be able to weather the storms that tomorrow will surely bring; and you are “middle class” if you have an expectation that your children should be treated fairly once you have done all you can to help them.

But while many people share these three concerns, their circumstances and capacities to manage them differ, something that is the result of growing inequality in access to secure and well-paying jobs.

Ninety percent of the population may belong to the “middle class”, but that doesn’t mean there is a one-size-fits-all-policy.

One way to get our heads around this is to let the answer to “Who are the middle class?” fall out of an answer to another question: “How is the economic pie divided?”

I’ve partitioned the Canadian population into those with incomes putting them in the top 10%, those with incomes putting them in the bottom 40%, and the remaining 50% of the population who are middle and upper income earners. This classification has not been commonly used in the Canadian discussion of the “declining middle class,” but it conveniently summarizes more detailed categories.

It highlights the distinct circumstances and concerns of different groups in the population in a way that is missed by focusing on “middle income” groups, who are often defined as some share of the population either side of the median.

Source: The author using Statistics Canada data, various surveys.

The richest tenth of the population has a growing share of total market income, rising steadily from about 25% and reaching almost 30%. Their incomes have consistently risen. This gives them the financial resources to deal with uncertainty, and also to set their children off on the right direction with both a leg up to get ahead, and a glass floor to keep them from falling behind.

They are not “middle class.”

The middle and upper income groups lost some ground during the mid to late 1990s, but overall have not experienced a big change in their share of total market income, just less than 60% of all income in the country over these 35 years. They managed because they made some smart family decisions: getting a better education, putting off marriage, having fewer kids, working harder. But this has led to more stress, time pressure, and an unease about what comes next. They need flexible family policies that make the marketplace more convenient for the family, social insurance for both demographic and labour market risks, and social and education policies to support the prospects of their kids.

They are “middle class.”

The bottom 40% lost ground for 20 years, and since the mid 1990s has made no gains, obtaining since that time about 12 to 13% of total income. Their incomes have stagnated, and in some ways this reflects the harsher realities of globalization and the erosion of the jobs and supports that decades ago offered a degree of certainty. They certainly need family policies, but also income support that guarantees an acceptable standard for themselves and their children.

They too, are “middle class.”

Our politicians need to recognize this diversity, offering  policies for the new reality of top earners, for those who have made all the right decisions yet are running up a down escalator, and for those who have fallen behind, whether through bad decisions or bad luck.

This is “middle class” politics for the 90%.

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10 Comments
  1. djb permalink

    I think that people should first be stratified by wealth not income….. then by income

    I think that using the top 10% shields the ones making all the gains the top 0.01%

  2. As we know, “Middle Class” is one of a number of popular and commonly-used terms that are applied to different groups of people, based on popular social customs and popular perceptions. It’s one of these terms which appears SUPERFICIALLY to be meaningful to many people, even though there is no generally-agreed definition of it. No wonder there are “as many as 156 definitions of the middle class”. Surely one of the key factors involved is the question of whether certain groups of people have inadequate, adequate or excessive incentives to better themselves relative to their current situations and needs. In this context, “incentives” equals positive incentives in the form of gainful employment opportunities and/or other positive and adequate opportunities for financial gain – because these are basic to everything else in life.

    A situation involving no gainful employment opportunities to escape poverty, for instance, equates to no incentives to better oneself and hence permanent poverty for the people affected. In the same way, people who are already rich with plentiful money to live on – but also having opportunities to do even better – could be said to have a gross excess of incentives relative to their actual needs (and don’t know or don’t care about those in poverty having no opportunities to improve their lot).

    Humans, like all other animals, can only function in the presence of adequate returns on time and effort – meaning, adequate incentives – to improve their lot. Our politicians need to recognize this. Also, I don’t see any reference to this in Statistics Canada’s analysis on the issues around “new entrants or re-entrants” to the labour force.

    Please see http://www.esdc.gc.ca/eng/publications/evaluations/skills_and_employment/2011/november.shtml

    Nor do I see any reference to the issue of lack of adequate incentives in Statistics Canada’s un-qualified / un-justified use of terms like “…given up looking for work…” or “…dropped out of the labour force…” when referring to most people out of work.

    How often do we see any of the foregoing discussed, particularly in the mainstream media?

    Robert T. Chisholm – Associate Member, OSPE

  3. Ken Doran permalink

    The core tension is between the classic social sciences use of the term “middle class”, and “middle income” as more colloquially connoting a median bloc of somewhere between 50 and 80 percent of the percentile scale. The classic definition, which still impacts the intuitive understanding of the term, applied to a tier between a small aristocracy and a larger and poorer majority. The two groups overlap somewhere between only slightly and not at all. For instance, a 75th percentile household could easily be no higher than the bottom edge of the classic middle class, but near the top of a middle income band. This can be dealt with effectively by defining one’s terms. Unfortunately, politicians attempt that essentially never, and journalists only rarely. The result is an extremely murky expression that contributes more confusion than enlightenment to public discussion.

  4. It’s hard to find a good way understand economy disabilities. Middle class has been damaged by unfair governments that just care about themselves before starting cut taxes for poor people.

  5. In order to define middle, or any other class, one needs to use family incomes as a starting point, since this is the best annual measure of economic well-being.
    Using quantiles is a dead-end, since by definition, x% of families will be within the defined range and one will not be able to measure polarization trends, or the “disappearance” of the middle class.
    With this in mind, I believe Wolfson used the number of families between 0.5x and 1.5 (or 2.0?)x the median family income as his working definition. The approach seems reasonable to me, with some refinements (such as making sure that the bottom of the range is above the low-income cut-off).

  6. Very interesting discussion. If we’re going to define what “middle class” should mean then it seems to me that we also need to come up with corresponding definitions for all the other popular terms such as “upper class”, “working class”, “underclass”, “super-rich”, “well-to-do”, “poor” etc. Wolfson’s definition of “middle class” is clearly a starting point. In all cases the issue of adequate incentives – or lack of them – to better oneself relative to one’s current situation, must also be included. Otherwise the exercise is meaningless. Another part of the puzzle is the issue of attitudes of the members of one social “class” of people towards those perceived to be in a different social “class”. Example: attitudes of “upper class” people towards “poor” people, along with the associated social “prejudices”.

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