August 25, 2013

The Myth of the Middle Class: Who are the Working Class?

The Myth of the Middle Class: Who are the Working Class?

As class war becomes more and more apparent in 21st century America, here’s a real look and analysis of class, and how it manifests. The article below was an attempt to make discussion points to come to a more collective view of class. Although it was written in 2006, the correctness of this article has been shown again by the recent capitalist crisis and recession. The Workers Commission of FRSO/OSCL recommends this reading as an important grounding to understand the nature of class in the United States.
A main source was Michael Zweig the Director of the Center for Study of Working Class Life at the State University of New York Stony Brook. You may also want to check out latest information on the Pedagogy of class page.


Webster’s Third New International Dictionary defines middle-class as a class with an “inclination toward a diversified social morality that includes such traits as a desire for stability and a high material standard of living, … [with] high ideals of education, professional competence, and personal ambition.”   It defines working-class as “people employed for wages; manual labor; a class of wageworkers.”

In this society, in the culture of the United States, it is generally assumed that people qualify as middle class when they make a certain amount of money and have a certain status. We only use the term “working class” to talk about people at the bottom of the economic ladder. Even the dictionary definition bears out this assumption. The reality is, however, that the lines are not so clear. Working class as well as middle class people can have “a desire for a high material standard of living and stability, high ideals of education, professional competence, and personal ambition.”

Our perceptions about which jobs, and what workers, are middle class, and which are working class, are subjective, based on ideology, not on facts about income level. According to Michael Zweig in his book The Working Class Majority: America’s Best-Kept Secret, “Class is about the power some people have over the lives of others, and the powerlessness most people experience as a result. This way of approaching class is different from looking at income or status or lifestyle.

The working class does have different income, status, and lifestyles from those of the middle and capitalist classes. Classes are groups of people connected to one another, and made different from one another, by the ways they interact when producing goods and services …Class is not a box that we ‘fit’ into, or not, depending on our own personal attributes. Classes are not isolated and self-contained.”

In order to understand the economic system, which affects our class, we need to understand the facts that bear on what class a person is in. In our society one’s class is based on one’s income, job status in society, and one’s position in the power structure. “[The] Working class is large and diverse… Since class is a matter of relationship and power, not job title, a person with the same job will be in one or another class, depending on the circumstances of the work. A truck driver who owns his [or her] own rig, for example, is in the middle class as a small entrepreneur, but a truck driver employed by a freight shipper is working class,” Zweig says.

If we examine economic trends over the last decades, we see that they reflect the underlying power relationships Zweig describes. To form a realistic analysis of class in U.S. society, we must examine six realities and trends that exist, or are occurring, in our country:
  • Wage shifts by occupation
  • The shift from industrial to low-paying service jobs
  • Rising education/wage differentials
  • The eroded minimum wage
  • Unemployment
  • Levels of household income
Examining these trends, along with a bit of historical analysis of the development of the economy in America, will reveal what class is.

Some History

Slavery provided the foundation, without which the economy of the U.S. could not have developed, since it was responsible for forty cents of every dollar generated in the north. Slavery and the international slave trade formed the basis for the capitalism that gave rise to the Industrial Revolution and solidified the class power structure in the United States. Sources and supports for the generation of wealth in the Industrial Revolution were the steam engine, the railroads, civil war, coal (between 1865 and 1900), steel production, and the rise of corporations. The Great Depression of 1930 also had a powerful effect on the class structure of America, from the end of World War II to the present day. President Franklin Roosevelt used government control over wages to compress wage gaps during World War II. His New Deal created the social service “safety net” that slowed down the growth of the income gap between those in the capitalist class and workers, but the policies, programs, and values it was based on have been under attack for more than thirty years.

Current Realities and Trends

Let’s look more closely at the six trends, outlined above, that affect wages, since wages are a major factor in determining what class people fall into.

Wage Shifts by Occupation

According to the Economic Policy Institute, in a 2004/2005 report, real wages have been falling since 1973. Low-wage, blue-collar, service, and younger workers experienced the greatest decline in pay. In contrast, wages in the areas of management, business, and finance experienced 2.1% real growth in 2003. This pattern of wage growth is consistent with high unemployment, which affects low-wage workers more severely than high-wage workers. This analysis of wage trends by wage level or percentile encompasses changes in the entire wage structure, not just those in one area. When managerial wages go up, this widens the gap between low-wage workers on one hand, and middle and high-wage workers on the other. The gap is widening, and low-wage workers are getting poorer while their numbers are increasing.

Shifts in Low Wage Jobs

The pool of workers earning poverty level wages expanded in the period from 1989 to 1995. In 2003, this wage was $9.04 per hour. Overall trends in the percentage of workers earning poverty level wages are primarily driven by trends among women, since women are disproportionately the ones earning these low wages. The shift downward in women’s wages therefore represents an increase in the percentage of the workforce that earns very low wages.

Rising Education/Wage Differentials

Changes in the economic benefits which education provides—called “education/wage differentials”— affect the structure of wages by widening the wage gap between groups with different levels of education. The expansion of education/wage differentials led to greater wage inequality in the 1980′s and 1990′s, and helps explain the relatively faster wage increase among high-wage workers. The wages of less educated workers fell during this period—that is, wages of workers with less than a four-year college degree. This group comprises nearly three-fourths of the workforce. In 1985, for example, a person could get a job as an Emergency Medical Service Worker with a GED. Today, college credits are needed. Education, and lack of it, has become one more of many obstacles for low-wage workers striving to become middle- or high-wage workers.

The Eroded Minimum Wage

The real value of money means how much a dollar can buy at any point in time. Because of inflation, the real value of the minimum wage has fallen considerably since its high point in the late 1960′s. The real value of the minimum wage in 2003 was still 22.9% less than it was in 1967. Increases in the minimum wage in the 1990′s raised its 2000 real value 14.7% over what it was in 1989. In 2003, the minimum wage was worth just 34% of what an average worker earning above minimum wage earned per hour. This ratio was at its lowest point in forty years. These statistics reveal that the earning power of low-wage workers has fallen significantly below those of average-wage workers. 58.2% of these low-wage workers, those with the least education, are women. So it should not be surprising that wage differentials—between low-wage women workers with only a high school education, and workers with a college education—are greatly affected by the decline in the minimum wage. Today, according to the New York Times, “New technology and low-cost labor in places like China and India have put downward pressure on the wages and benefits of the average American worker. Executive pay, meanwhile, continues to rise at an astonishing rate.”

Unemployment

The annual unemployment rate increased from 4.0% in 2000 to 6.0% in 2003. During the period from 1947-1979, female workers had a higher unemployment rates than male workers. Data on unemployment generally show that disadvantaged groups experience the most gains from an economic recovery, and the greatest losses during a recession. Lower income families gain the most percentage wise, although they gain the least in terms of actual dollars, since their incomes start off at a lower level. The economic recovery that was prolonged into the late 1990′s brought steep declines in unemployment. This meant it disproportionately benefited the 60% of families with the lowest incomes. The recession that followed, in turn, disproportionately negatively affected those same low-income families.

Household Income

Labor compensation—pay for work—accounts for the largest share of household income. Therefore, the basic pattern of inequality that occurred with earnings repeats itself here. While income inequality is high in many countries, in the U.S., inequality yields higher poverty rates and lower living standards for those at the bottom, than do comparable other economies. (These statistics are measured after taxes and transfers, including refundable tax credits.) The United States has the most unequal household income by both measures, poverty rates and living standards. A household in the bottom 10th percentile of income distribution receives just 39% of the income the median household receives. The New York Daily News reported that many families with children in New York make less than $15,000 a year, while a United Way/Women’s Center for Education and Career Advancement study estimated that “a Queens family of three needs more than $50,000 a year to take care of housing, food, transportation and health care expenses, along with assorted other costs.” Intergenerational earning mobility—ie the degree to which fathers and/or mothers can pass on earning ability to sons and daughters—is another important aspect of inequality and the persistence of inequality. Today, “despite rapid increases in productivity, which is historically the source of a rising standard of living, family incomes are not growing,” wrote Jeffrey Madrick in The New York Review of Books. “In fact, … median family income is roughly what it was in 1999, even though wages at last rose early this year.”
The above trends increase the power the capitalist class has over workers. In the United States, the culture pushes working people to aspire to become middle class, and to eschew the “working class” label. This means most workers identify not with other workers, in keeping with their common interests, but rather with the capitalist class, to which they don’t belong, which actually exerts power over them. The concentration of income at the top is the key reason that the United States, for all its economic achievements, has more poverty and lower life expectancy than any other so-called developed nation. CEOs were always paid well compared with the average worker, but there is simply no comparison between what executives got paid a generation ago, and what they are paid today. In the last twenty-nine years, the average workers salary went up only 10% in real spending money. In 2004, the New York Times reports, CEOs’ compensation “was about $7.6 million, after peaking at almost twice that in 2000,” a rise of “an average of 6.8 percent a year.” At the same time the average worker’s pay rose to “about $43,000 in 2004 from about $36,000 in 1980, an increase of 0.8 percent a year in inflation adjusted terms.”
The ambiguity and wide variety of experiences within classes is a testimony to the fact that classes are not boxes or static categories.
What determines which class people are in is complicated; it’s real; it’s about more than just income levels. It’s mainly a matter of relationships and power, not job title. Workers such as Emergency Medical Service workers or firefighters, who also have their own businesses, are working class when they’re on the job, and become middle class when they’re acting as entrepreneurs. The majority of people are in the working class. Middle class people came from the working class, and aspire to be in the capitalist class, so they end up caught between these two main classes in society.

Sources:

The New York Daily News. ”Making a Living? Hardly” by Jose Martinez.
The New York Review of Books, June 8 2006. Review by Jeffrey Madrick of American Theocracy: The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century by Kevin Phillips.
The New York Times, April 9, 2006. “Off to the Races Again, Leaving Many Behind” by Eric Dash pp. 1, 5.
The Working Class Majority: America’s Best-Kept Secret by Michael Zweig.
The State of Working America 2004/2005 by Mishel, Bernstein and Allegretto, The Economic Policy Institute.
Webster’s Third New International Dictionary, Third Edition.
Lester Muata Greene has been a labor and civil rights activist for thirty years, and is a past president of the Coalition of Black Trade Unionist NYC chapter.
- See more at: http://freedomroad.org/2013/08/the-myth-of-the-middle-class-who-are-the-working-class/#sthash.CeETRsLg.dpuf

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