Tuesday, October 30, 2012

In political terms, who are the ‘middle class’?

Previously published in the Terre Haute Tribune-Star, 10/14/2012

TERRE HAUTE — Will the 2012 presidential election win a prize for how many times the candidates say they care about the “middle class?” Who is this “middle class” they talk about? In many ways, the candidates are really talking to anyone and no one at the same time.

“Middle class” is a bland term, one that is broadly inclusive in an uncontroversial way and helps the candidates obscure their policy paybacks to their political base. To the candidates, middle class status is simple: it’s a single dimension, an income range, with no stated bottom, but a ceiling of $250,000. This is the political equivalent of redefining the shrinking middle class to enlarge it. There is no serious discussion of poverty. Hence, the middle class is construed as expansive. In short, it’s America.

According to the Pew Research Center’s study of 2,508 U.S. adults during July of this year, 49 percent identified themselves as “middle class.” The middle class brand is for mass consumption. Self-identified middle class status varies little by race, age (except for 65 and above), or education. Forty-six percent of those who earn $100,000 or more, 65 percent who earn $50,000-$99,999, 51 percent who earn $30,000-$49,999, and 35 percent who earn less than $30,000 self-identify as middle class.

If middle class means middle income, Pew used Census data to estimate how many people fall into a range of middle incomes. They found the share of adults who self-identified as middle class in the survey was about equal to the share of adults living in households defined as middle income using Census data falling in a range of two-thirds to double the overall median size adjusted household income. Hence, Pew found that 51 percent of adults lived in households with incomes $33,331-$101,004. If President Obama and Gov. Romney think middle income is above $200,000, it would be interesting to hear them explain why.

It is to the politicians’ advantage to use an abstract concept of social class, one based only on income. This simplistic, non-relational, concept of social class helps to obscure real social class differences that might cause political difficulties for the economic elite in the United States.

Many reading this surely remember everyday terms that real people use to describe various social class groupings. One that was common just 20 years ago was “working class.” And working class people had influential non-governmental organizations to help represent their interests in the rough and tumble world of politics — labor unions. How about white collar and blue collar? Those terms reflect social class as a relation, not just a crude income category; they reflect social class in terms of one’s relationship to the economic institution. In short, how a person makes their living, which is not the same as one’s income.

People who earn their money by working for a paycheck are treated differently on a daily basis in their work and through public policy than those who earn their money by “renting” their wealth. Most employees are “at- will” employees and serve at the will of their employers. Losing their job means losing their income, their health insurance and a whole lot more.

Others can earn a middle class income through dividends, interest payments on large sums of money and buying and selling stores of wealth. Others earn their money directly off the labor of their employees. Some earn a salary by supervising and managing the labor of others who in turn make money for the enterprise’s owners.

Public policy treats sources of income differently. Income earned through work is, except at the very lowest levels, taxed higher than income earned through expending no effort other than lending money, buying municipal bonds, and renting assets. In short, those who can live off their wealth are in a different social class than those who live mainly or solely from what they can earn with their labor. A job can be easily expropriated, but wealth cannot. These people are in different classes even if their incomes are similar.

Reducing complex social relationships that create power differences between people into broad groupings of people based on income serves only to benefit those who govern the rest of us. The Washington gridlock and the political polarization isn’t serving the interests of the middle class. Whose interests does such a situation benefit? The poor?

The median household income in Vigo County in 2011 was $39,229. Twelve percent of households earn over $100,000 and 22.5 percent of families with minor children live in poverty. That means that virtually everyone, to listen to President Obama and Gov. Romney, are middle class in Terre Haute. Really?

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