The “Middle” Class: An Illusion

 The Origins of the “Middle Class”

There is a reason that this article has quotations around Middle. If one speaks of a middle it usually denotes “in between,” but in this case in between what?

There was a time when the term “middle class” had a definite economic and sociological meaning. Back in the Middle Ages about 500 years ago, the middle class meant in between the upper class of nobleman and lower class of serfs. Feudalism had several classes: feudal lords , theologians, artisans, and finally the lowest rung of the ladder-the serfs that went with the land owned by the feudal lords Each class was clearly defined into law that reflected feudal society.

Presently this number has been drastically altered. As Rosa Luxemburg pointed out almost 100 years ago unlike acquired rights, capitalism is based on “real economic relations-the fact that wage labor is not a juridical relation, but purely an economic relation. In our juridical system there is not a single formula for class domination of today.”[1] The reason for this is that when capitalism overthrew feudalism and placed the upcoming merchant class-the bourgeoisie (the capitalist class)-in the dominant position, laws defining classes became meaningless. Defining classes into law, which can’t be fully explored here, prevented the development of capitalism. As Marx and Engels explained:

Our epoch, the epoch of the bourgeoisie, possesses, however, this distinct feature: it has simplified class antagonisms. Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other – bourgeoisie and proletariat[wage workers][2]

This split into two classes has been completed many years after the aforementioned was published in 1848. With only two classes left, there is no class in between, hence no middle class. Let there be no equivocating, capitalism’s two class divisions are the capitalist class and the working class. The term “working class” seems repugnant to many intellectual and salaried workers, but this is a vanity left over from the final overthrow of feudalism.

America didn’t experience feudalism. The idea of middle class notions emanated from Europe. Paul LaFargue noted that the modern idea of “middle class” began with the intellectuals in the French Revolution. They had high hopes. As LaFargue noted:

Promises cost it [the Revolution] little; it announced to all men that it brought them joy and happiness, with liberty, equality and fraternity, which, although eternal principles, were now born for the first time. Its social world was to be so new . . .even before the Republic was proclaimed. . . .[but] It did not take long to determine the value of the promises of capitalism; the very day it opened its political shop, it commenced proceedings in bankruptcy. . . . In 1790, an electoral act. . .established inequality before the law, no one was to be a voter but the “active citizen,” paying in money a direct tax equal to three days’ labor, and [only those in this category were] to be eligible for office. . . The electoral law deprived so many citizens of political rights, that in the municipal elections of 1790, at Paris, a city which counted about half a million inhabitants, there were but 12,000 voters, Bailly was chosen mayor by 10,000 votes.[3]

The middle class grew from these early intellectuals. It didn’t take long for this prestige to evaporate. By 1848, Marx and Engels observed: ”The bourgeoisie has stripped of its halo every occupation hitherto honored and looked up to with reverent awe. It has converted the physician, the lawyer, the priest, the poet, the man of science, into its paid wage laborers.”[4]Accompanying this lowered status was law of supply and demand. Lafargue continued: “in all branches there is an overproduction of intellectuals, and. . . when a place is vacant, tens and hundreds offer themselves to fill it; and it is this pressure which permits the capitalists to lower the price of the intellectuals and to put it even below the wage of the manual laborer. . . . The capitalists have degraded the intellectuals below the economic level of the manual laborers.”[5]

And of course, the “middle class” to this day is still awash in its fantasies:

These intellectuals of industry and politics, the privileged portion of the wage class, imagine that they are an integral part of the capitalist class, while they are only its servants; on every occasion they take up its defense against the working class [meaning workers with lesser education], which finds in them its worst enemies. . . . They think their education confers on them a social privilege, that it will permit them to get through the world by themselves, each making his own way in life by crowding out his neighbor or standing on the shoulders of everyone else. They imagine that their poverty is transitory and that they only need a stroke of good luck to transform them into capitalists. Education, they think, is the lucky number in the social lottery, and it will bring them the grand prize. They do not perceive that this ticket given them by the capitalist class is a fraud, that labor, whether manual or intellectual, has no other chance than to earn its daily pittance.[6]

In our times, the wages of the “middle class” have usually been above what LaFargue referred to as a “daily pittance.” So what does “middle class” mean today? Usually those that aren’t on the lower rungs of the wage scale, but they still retain the same economic quality of their lower paid colleagues. Both must present themselves to an employer to get a job for their existence. As a class there is no distinction. That distinction only exists in their fantasies.

But rungs on the wage-scale ladder sometimes collapse to the lower rungs. Losing higher paid positions to lower ones from outsourcing is an example-but more on this later.

Education
The percentage of degreed workers in the U.S., bachelors and above, stands at 27.2 %.[7] In my location-Minnesota-it is about one-third of the work force. It’s difficult to retain one’s illusions of superiority when such a large portion of workers are educated.

Employment is a reflection of our increased technology and unless one has familiarity with this technology only the lowest paid jobs are available. The education “advantage” has evaporated and changed into a necessity to find employment.

In 2004, John Podesta and David Sirota posited that “The gateway to the middle class is considered to be a salary of about $35,000 a year.”[8] But despite this very modest definition of entry into the “middle class,” Podesta and Sirota went on to note that the Bush Administration had stripped these middle classers of Federal overtime pay protections and cut job training outlays by billions. The level of $35,000 is only what one can expect with a high school education. They also noted that providing adequate health care for this middle class had also suffered by inauguration of health savings accounts. As was suspected: “The president’s health savings accounts, which would put money into the consumers’ hands, also would allow employers to contribute less to workers’ coverage. In other words, annual health insurance deductibles probably would go up.”[9]

As expected, nothing good could possibly come out of the Bush administration-criminal even under the standards of capitalism. Podesta and Sirota went on to comment on the alleged “drug coverage” for seniors who once considered themselves “middle class.”

As prices skyrocket, the president’s Medicare bill all but ensured hundreds of billions in profits for the pharmaceutical industry without providing truly comprehensive drug coverage to seniors. The bill did nothing to prevent drug companies from charging Americans the highest prices in the world.[10]

What can the “middle class” look forward to?

In an piece by Floyd J. McKay, “The Rapid Disappearance of America’s Middle Class,”[11] he quotes Elizabeth Warren, Harvard Law School professor about the prospects of the middle class:

During the past generation, the American middle-class family that once could count on hard work and fair play to keep itself financially secure has been transformed by economic risk and new realities. Now a pink slip, a bad diagnosis, or a disappearing spouse can reduce a family from solidly middle class to newly poor in a few months.”

The danger, Warren finds, comes from both ends of the financial spectrum: a decline in real wages for full-time workers and huge increases in basic family expenses. As a result, families are staying afloat only because both partners work.

Male full-time workers in 2003 earned $800 less than their counterparts in 1970, after adjustment for inflation. Enter the second paycheck, and the family’s combined income goes to $73,700 a year, a huge 75 percent increase from 1970. Sounds great, right?

Not so, says Warren, and most of us would agree. Extra earnings increase costs for transportation, child care and taxes. Additional higher costs of mortgages and health care simply erase the added earnings – and then some. Warren estimates today’s two-income family actually has $1,500 less per year in discretionary spending.

If you prefer the 70’s style family of one working parent and the other keeping the home fires burning Warren warns that you had better be ready for a 72% drop in discretionary income compared with a generation ago. McKay continues on about Warren’s observation:

There’s no room for error with both parents working and up to their necks in debt and obligations. “A once-secure middle class has disappeared. In its place are millions of families whose grip on the good life can be shaken loose in an instant.”

Added to these worries are stratospheric credit-card interest, adjustable mortgage rates, and a banking industry that has made bankruptcy only an option of the wealthy or faltering business enterprises.

Another historical mark of “middle class” entry has been home ownership. “Home ownership” doesn’t really mean ownership but living in a house owned by one’s mortgage holder. The year 2007 hasn’t shown much promise to this earmark of middle classism. As the Houston Chronicle put it:

The number of U.S. homes facing foreclosure surged 58 percent in the first six months of the year, the latest sign of growing problems in the mortgage industry, a data firm said today. In all, 573,397 properties across the nation reported some sort of foreclosure activity in the first half of this year, including receiving notices of default, auction sale notices or being repossessed by lenders, Irvine-based RealtyTrac Inc. said. That was 58 percent higher than in the first six months of 2006 and 32 percrent higher than the last six months of 2006. . . . The number of U.S. homes facing foreclosure surged 58 percent in the first six months of the year, the latest sign of growing problems in the mortgage industry, a data firm said today.

In all, 573,397 properties across the nation reported some sort of foreclosure activity in the first half of this year, including receiving notices of default, auction sale notices or being repossessed by lenders, Irvine-based RealtyTrac Inc. said. That was 58 percent higher than in the first six months of 2006 and 32 percrent higher than the last six months of 2006.[12]

And from the June, 2007 issue of the Monthly Review it shouldn’t be a revelation to workers that income disparity has greatly increased. From 1980 to 2004 U.S. worker productivity increased by two-thirds while wages [inflation corrected] actually fell. Wages at the 90th percentile [the point where 90% are doing poorer] had only a 1% increase. To fathom where the great difference is we must go up to the 99.9th percentile and note that income there rose 181% while those in the 99.99th level rose 497%.[13] The share of income in the top one-tenth of one percent quadrupled from 1970 to 1998.[14] At these giddying heights we have long left the ranks of those that must work for a living.
https://i0.wp.com/i.imgur.com/J9St9.jpg

Outsourcing

Where have the jobs gone that once made it possible to eke out a minimal “acceptable” living? To understand their emigration we must first address the assertion that wages determine prices. Diamond miners in South Africa produce a very expensive commodity and are paid low wages. High priced labor such as mechanical and chemical engineers are in charge of factories that produce vast quantities of inexpensive goods still command higher wages than most other workers. In a nutshell, the value of commodities isn’t connected to wages, but reflects the amount of efficient productive time it takes to produce them. Thus, candy bars are cheaper than bulldozers; since bulldozers take more expended effort to produce than individual candy bars. Likewise the value of the commodity labor power (wages or salaries) reflects the amount of useful time it takes to produce it. In short, this means the amount of necessary time to produce the food, clothing, shelter, furthering education, etc. for its production just like any other commodity. It takes more to produce an engineer than other types of workers. Wages/salaries reflect this.

So what happens when a factory is sent to low-wage countries from the U.S? In short, the lesser standards of living in Indonesia and other similar locations mean that wages are lower, meaning that profits begin to soar. As Thom Hartmann put it:

When wages go down, profits go up. American wages [this also pertains to salaries-just another word for wages] have been falling steadily since Reagan first reintroduced con economics in 1980, and American corporations are generally more profitable than they’ve been in decades. In part this is not only because wages are going down within the United States but also because U.S.-level wages are being replaced by India- and China-level wages through outsourcing and offshoring.[15]

In essence, if the American “middle class” wants to compete with their low-wage counterparts they must learn to live with their offshorers level of existence. Since the cost of living in the U.S. is much higher this is almost impossible. Only when American wages reflect the level of the poverty ridden areas where their former jobs have migrated will jobs return to the U.S. Then world-wide low wages/salaries will be the new standard. Paul Craig Roberts, former Assistant Secretary of the Treasury had a dire outlook for former middle class high tech jobs:[16]

At a Brookings Institution conference in Washington, D.C., in January 2004, I predicted that if the pace of jobs outsourcing and occupational destruction continued, the U.S. would be a third world country in 20 years. Despite my regular updates on the poor performance of U.S. job growth in the 21st century, economists have insisted that offshoring is a manifestation of free trade and can only have positive benefits overall for Americans. Reality has contradicted the glib economists. The new high-tech knowledge jobs are being outsourced abroad even faster than the old manufacturing jobs.

Declines in the highest paid “middle class” jobs have become the rule. From 2001 to 2005 computer science and computer engineer pay fell 12 to 13%. Individuals holding graduate degrees in computer science, computer engineering and electrical engineering fell from 7 to 14%.[17] Non-computer related engineering and architectural jobs were reduced in the five years of 1999 to 2004 by 100,000.[18] Higher paying technical job so closely intimated to middle class membership, that can be outsourced, will eventually be.

The Politics of Capitalism and the Middle Class

Charles Sullivan, writing in CounterPunch said it clearly in a 2004 article, “Corporatism and Single Party Politics”: “the two parties long ago merged into a single political force that is fueled by corporate money. This single party system not only caters to the rich–it exploits the shrinking middle class. . . . Under the rules of corporate governance, the working poor and the eroding middle class-indeed more than ninety-five percent of the population-are left out in the cold to fend for themselves. . . . That party unifying force is the ruling class power structure of corporate governance. It is driven by the economic engine of capitalism that concentrates wealth at the top of the economic ladder. Capitalism makes the rich richer by exploiting the poor much in the way that slave labor built the pre-civil war south into an economic power–a power that could not endure because it rested on the precarious underpinnings of social injustice.”[19]

Future Possibilities

Has the last 40 years cast all exits from this nightmare hopeless? The U.K. Ministry of Defense’s Development, Concepts & Doctrine Centre produced a report that paints a possible dire outcome for capitalism that includes “The middle classes could become a revolutionary class, taking the role envisaged for the proletariat by Marx.” As reported in The Guardian, April 9, 2007:

The thesis is based on a growing gap between the middle classes and the super-rich on one hand and an urban under-class threatening social order: “The world’s middle classes might unite, using access to knowledge, resources and skills to shape transnational processes in their own class interest”. Marxism could also be revived, it says, because of global inequality.[20]

The middle class is an illusion. To call on the “middle class” to give up their illusions about their condition is to call on them to give up a condition that requires illusions: that condition is capitalism itself!

Footnotes

[1] Rosa Luxemburg, Rosa Luxemburg Speaks, Reform or Revolution, p. 78, Pathfinder Press, 1970.

[2] Marx and Engels, The Communist Manifesto, Chapt 1, Bourgeois and Proletarians. http://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch01.htm

[3] Paul LaFargue, Socialism and the Intellectuals, 1900. http://www.marxists.org/archive/lafargue/1900/03/socint.htm

[4] Marx and Engels, The Communist Manifesto, Chapt 1, Bourgeois and Proletarians. http://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch01.htm

[5] Paul LaFargue, Socialism and the Intellectuals, 1900. http://www.marxists.org/archive/lafargue/1900/03/socint.htm

[6] Ibid.

[7] Education Statistics, http://www.statemaster.com/graph/edu_bac_deg_or_hig_by_per-bachelor-s-degree-higher-percentage

[8] Podesta, John and Sirota, David, “Late, Great, Middle Class,” Los Angeles Times, Sept. 6, 2004, http://www.commondreams.org/views04/0906-24.htm

[9] Ibid.

[10] Ibid.

[11] Seattle Times, January 11, 2007. http://www.commondreams.org/cgi-bin/print.cgi?file=/views06/0111-28.htm

[12] U.S. Home Foreclosures Jump 58%, Houston Chronicle, July 30, 2007. http://www.chron.com/disp/story.mpl/business/5011634.html

[13] Tabb, Wm. K., Wage Stagnation, Growing Insecurity, and the Future of the U.S. Working Class, Monthly Review, June, 2007. http://www.monthlyreview.org/0607wkt.htm

[14] Ibid.

[15] Hartmann, Thom, Screwed: The Undeclared War Against the Middle Class, Barett-Koehler Publishers: San Francisco: 2006, p. 177

[16] Roberts, Paul Craig, “As Jobs Leave America’s Shores-The New Face of Class War’” http://www.counterpunch.org/roberts09302006.html

[17] Ibid.

[18] Ibid.

[19] Sullivan, Chas., Corporatism and Single Party Politics, CounterPunch, Feb. 22, 2006. http://www.counterpunch.org/sullivan02202004.html

[20] Norton-Taylor, Richard, “Revolution, flashmobs and brain chips. A grim vision of the future,” The Guardian, April 9, 2007. http://www.guardian.co.uk/science/2007/apr/09/frontpagenews.news

[This piece originally appeared on the website of our comrades of the Socialism Marx DeLeon For A Real Union (RUSS) 08/03/07    http://socialismmarxdeleonforarealunion.org/  ]

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