Social Class

So, I keep referring to this article I wrote a few years ago

, and thought I'd repost part of it with an update.

We talk about how much the middle class is struggling these days, but the way I see it, the middle class is doing just fine- It's that a whole bunch of people who used to be considered middle class now aren't.  We'll get to that in a minute.  First, let's talk about what we mean by poor, blue collar, middle class, and rich (with maybe a couple others thrown in).  Again, the entire point of this is to describe those lifestyle classes *without* yet assigning a dollar amount to them.

  • Impoverished:
    You have nothing, or close to nothing. For whatever reason, you are unable to provide for yourself.  If any of your basic needs are met, it is either by charity or the social safety net.  Something others may see as a basic need, such as a vehicle or new clothing, you consider to be a great luxury.
  • Poor:
    Although you have the basic necessities of life, they are a constant struggle to maintain. If you work, it does not provide enough to survive, and you must work multiple jobs or take charity to keep a roof over your head. Your major possessions are likely old or of cheap quality.  The slightest financial setback can literally jeopardize your very survival, and you are unlikely to ever manage a vacation or small luxuries without a great deal of either luck or sacrifice.  Retirement is literally unimaginable.
  • Working Class (blue collar):
    While luxuries are few and far between, your basic needs are generally well met.  You have stable employment and living conditions, and while you feel the pinch of an unexpected expense, you still have enough money to manage a few creature comforts.  You likely drive a used but well-maintained vehicle, and when it comes to possessions, they tend to be either inexpensive or intended to last for a very long time. You can look forward to a modest retirement.
  • Middle Class (white collar):
    Although you are still concerned about money, your basic needs are well met, and you try to put something away for the future.  Your profession or position is one which is considered respectable, and you can move between jobs if necessary without making major sacrifices.  For the most part, essential purchases such as a home or schooling are budgeted for and unlikely to cause hardship. You purchase a new car every few years, and select consumer goods of decent quality  You can plan to retire at more or less your current standard of living.  Given enough time, you are likely to recover from all but the most severe financial setback, and still make an occasional luxury purchase.
  • Rich:
    While it is likely you have a job, it is either as the owner of a company, or in an elite position in a difficult field.  You seldom, if ever, worry about meeting your basic needs, and your standard of living is likely to improve with retirement. You put a substantial portion of your earnings into stocks, bonds, and other investments.  You purchase high quality or luxurious consumer goods and vehicles on a regular basis.  You can take time off frequently, and travel as you wish to foreign destinations.  You employ one or several people such as a housekeeper, gardener, driver, or personal assistant.  You have access to places and social circles unavailable to most people, such as elite country clubs, political fundraisers, and private shopping experiences.
  • Wealthy:
    You do not think about basic needs.  Your income comes from investments- If you work, it is by choice, and in whichever field furthers your own personal goals and desires.  You purchase anything you want, with little thought to anything but the largest or most extravagant items such as a yacht or private island.  At this point, money is no longer about survival, and becomes either about power or a simple game of accumulation.  You can cross international borders at will, and probably have homes and assets on several continents.  You have access to things others can only dream of, such as face to face meetings with celebrities and heads of state.  Your great-grandchildren will continue to enjoy your same quality of life without ever having to work.

I think those are pretty reasonable definitions.  

The problem is that jobs which used to provide a solid middle class income (teacher, office worker) are now barely paying blue collar wages if that;  And the former blue collar jobs (warehouse worker, waiter/waitress, mechanic) are barely enough to stay out of poverty.  At the height of the middle class, one blue collar income could sustain a married couple with a couple of kids.  Now that takes two incomes, at least, working the same jobs.

The middle class is fine- It's just much smaller. The entry point to be able to live that lifestyle now, at least in my parts of New England, is somewhere between $100k and $150k per year.  $40k, which used to be considered a solid salary, is now barely enough to survive once one factors in school loans, health care, and the average American's debt.

With the propensity of automation and globalization to consolidate wealth at the expense of everyone below the "wealthy" level, this situation is likely to get worse unless radical steps are taken to devise an economy built for the post-scarcity world.