Who are the middle class?
One 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.
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%.