Money, class & power

It’s being widely claimed that the cut in child benefit for higher-rate taxpayers will lead to “real hardship” for the “middle-middle class.”
My immediate reaction to this is: get a grip. A two-adult, two-child household with an income of £50,000 a year is better off than 63% of the population. You can call this middle if you like, but I doubt if a fund manager who out-performs 63% of his peers would advertise his performance as middling.
Why, then, do we think of such people - and those earning significantly more - as “middle class”? 
I have called it the middle England error. But I suspect that something else is going on as well. The reason we don’t describe people on relatively high incomes as upper-class is that they lack something a true upper-class has - power.
Many - most - people on around £50,000 a year lack control over their fate. They are vulnerable to the sack; they can’t choose how long they work (it’s a cliché that “middle class” women are frowned upon if they take time off to look after the kids); and presenteeism traps them into long commutes.
In these respects quite high earners have more in common with minimum wage workers than they do with (some? many?) bosses.
What we think of as the “middle class” is instead - to borrow Erik Olin Wright’s phrase - a  contradictory class location.  Such people score highly for incomes, but lowly for power.
This, though, raises questions. Why is there so little political demand among the “middle class” for greater empowerment at work? Why are such people so reluctant to identify themselves with others who also lack power?
The answer, of course, lies in ideology and cognitive biases. Not least of these, perhaps, is a wishful thinking which leads people to think that they can escape their lack of power by climbing the greasy pole. 

Comments

[Luis Enrique]

auto-trumpet:

I refute your middle class error thusly!

http://liberalconspiracy.org/2010/03/19/data-abuse/

[Tristan]

These 'middle classes' who lack power are in reality working class, but that term is reserved in the minds of most for the poor who don't speak 'properly' and live in the inner cities.

Stupid really, and divisive.

If there's a middle class its the employers who aren't from the upper classes - the political and hereditary powers.

[Phil]

Good stuff.

[Luis Enrique]

if you wanted to increase power, as you define it, what would the economy look like? An economy of sole traders?

If you want to work in organizations of any scale you need to toe the line to its rules. How large an increase in power would a Vodafone employee experience if Vodafone become worker owned or workers voted to elect the board, or whatever? Not a great deal imho, but I could be wrong.

[Dave O]

Love the Mandel reference. Don't think I don't notice these things, comrade.

[redpesto]

Maybe they think that 'higher rate taxpayers' are the real middle-class, so the fact they can be earning more than four times more than someone in the same tax band doesn't register.

[Matthew]

Luis - I think you're wrong on one point, which is about mixing different households, as isn't the IFS data 'equivalised'?

On the lifetime income, your point is obviously a good one. There is data here

http://www.dsdni.gov.uk/section_3-5.pdf

Ignoring two earners etc, it seems to me for women age 24-34, and men age 45-49 are at peak earning power, and you should divided by about 1.5 to normalise it.

[Craig M]

Just as Bob Crow said on hardtalk recently really – there is no middle class..

Just a small point on that 40-50% bracket. Take a London household on 44k with two young kids & stay at home mother – monthly take home after student loan is £2,444. Take rent for a two bedroom house at £1450 (honestly!), council tax at £110, utilities £115, transport to work £100. That leaves £669 a month to live on. You can quickly see how useful that extra CB is.

If tax breaks are to be implemented to compensate, any savings made are going to be fairly negligible. The cannier move would have been to end CB next year for the top rate tax earners – this at least would have been a token gesture towards “we’re all in this together”.

[Nick Rowe]

Why, though, does there seem to be such a big difference between what Americans and Brits call "the middle class"? Reading US blogs, I get the impression that if you are not actually panhandling for spare change, you must be middle class. Somehow, they lost their working class.

[D]

I've wondered about that too.

I think it is the British are still wrapped up with Victorian notions of class and the aristocracy.

Clearly the Americans have their own establishment; but they've never had their own monarchy. I think that's part of it.

We also have a very strong working class cultural identity here; look at the indie scene, Mockney accents,Eton toffs etc. We are very concerned by concepts of class; they aren't.

Here one can be upper class or middle class without any money. A working class lass is always that, regardless of her income. It seems over there cash is class (though with obvious exemptions). It's all about the American Dream, there are no "new money" digs if person climbs that greasy pole.It's all about aspiration. Who you want to be. Who you can become. Here it's about who you are and where you're from. We don't leave it behind.

Then again, maybe they've not lost their working class, maybe we left behind those the Americans consider "working-class" to become our "under -class"?

[rogerh]

Well, back in 1829 £1000/year was considered a pretty comfy income for a middle class gel. About £300K nowadays I guess which is about right for a 'proper' middle class income. As a check, my local GP pulls down about £200K and established doctors historically earned about 10 time a labourer's wage - so £20K today - so the scale is roughly right. So to be called 'middle class' you need £200K/year at least to live up to the title.

Realistically a middle-class worker on £200K is not going to jostle for more power for the wage-slaves on a mere £50K and the wage-slaves don't have the power to do so.

Wage differentials seem in line with history, but house prices are not. My Grandfather bought his house for £200 in 1920 - about £8K today. The traditional working class has certainly lost out.

[Luis Enrique]

thanks Matthew

[john b]

We are very concerned by concepts of class; they aren't. Here one can be upper class or middle class without any money.

No, this is the bullshit American myth. They are very concerned by concepts of class, but it's far more insidious than the UK way of viewing things, because they believe their class system is solely meritocratic.

A working class lass is always that, regardless of her income.

Yeah, tell that to Anne Robinson and Susan Greenfield.

[David Weber]

The percentage of people you are better off than isn't really so important on its own. Take a (hypothetical) world where 90% of people earn within £100 of the median, but with 10% earn astronomically high salaries.

It would clearly be absurd to proclaim to those earning marginally higher than the median that because they earn a higher wage than the majority that they are not "middle class". Thus there is no sense in looking at things proportionally without the context of the extremes at either end.