I suppose that I am one of the squeezed members of middle classes as identified by the BBC, but then nearly all of us are. As a middle income household (7th decile in fact, check yours here courtesy of the IFS model, whose assumptions on equivilised income may gratify or annoy you depending on your politics), with two kids in their later teens, the Browne bombshell will almost certainly land on our doorstep at some point soon. If the government implements the Browne Report into university funding (and it looks like it will, barring perhaps a few tweaks to placate the LibDems), it will change higher education in England for good. All the more so if the leaked information about university funding proves true. We will move closer to an American system where there is open competition for students and consequent differential costs and benefits. Above all, potential students will need to evaluate whether they want to load up with debt. Overall, probably not a bad thing, but time will tell.
To this must be the added the recent cut in Child Benefit for those in the higher tax bracket. As it happens (and by incredible foresight all those years ago), we shall just escape the CB cut, so I am quids in there. There is a theory, promulgated amongst others by the universities minister, David Willetts, that the baby-boomers have had it too good and that the next generation have suffered in consequence. It's not a theory I generally subscribe to since, for those baby boomers who have done well (and many of them haven't), their children have grown up in comfortable homes and will inherit their wealth or (as Willetts et al. will now ensure) will receive at least some parental funding for their education. They have been getting mortgage support for some time, of course, via Bank of Mum and Dad.
Paul Mason, who writes in the Grauniad and also reports on the BBC, identifies the big middle class squeeze in the USA, a theme that was picked up on recently by ERE. Time was when middle class meant not having to work for a living. These people lived on investment income (check out Jane Austen for the facts and figures), even if for some people these incomes were comparatively small ("distressed gentlefolk"). The term "working class" originally meant people who worked for their living. What a weird idea -- a label actually meaning what it says. We've got away from that simple system as more and more people view themselves as "middle class". A declining rump of people still see themselves as "working class", almost regardless of income, as the term has a certain political kudos (as does "upper class" in its own way). Moreover, some of the working class no longer work. Hardly anyone, of course, would describe themselves as "lower class" even if in educational and financial terms that is what they are.
As more and more people have come to regard themselves as middle class, the term has become more and more meaningless and we've had to invent labels like upper-middle class, middle-middle class and lower-middle class. These terms have specific resonances in Britain and probably elsewhere in the English speaking world, but the fact remains that many have borrowed their way into the middle class club, got drunk on debt and now will be kicked out by the invisible bouncers of the real economy. At the other end of the scale it amuses me to hear that the middle classes will be hit by the recent reduction in the annual tax free limit on pension contributions from £255,000 to £50,000. Notwithstanding a few special cases, that's not a middle class I belong to. Furthermore, in Britain at least, we know that class is not just about money.
It seems very likely that there will be a squeeze on the middle class for the simple reason that it has got too big and too convenient a label. If you are in a household only just above the first decile you might well regard yourself as middle class, likewise if you are below the 99th centile. In net equivilised terms that could take us from a working single parent with two kids on £15k per annum to a single person on £60k. That's over 85% of the population. It seems that we're all in this together.
I'm tickled that the middle classes used to live on investment income. I was under the impression it was what we would call the small business owners and merchants in Victorian times that were what we'd call middle class now, but then perhaps that's why I failed Eng. Lit :)
ReplyDeleteCommiserations on the uni charges. I still think that we need to roll our sleeves up and fix the dysfunctional exam system, and then get behind the bright kids financially once we can spot them, so some of them can create wealth in future...
Well, I'm no expert here and I failed Eng Lit too (you could fail exams in those days), but I think it was a change that happened in the course of the Industrial Revolution. Essentially, some working people turned themselves into entrepreneurs and became wealthier (often, much wealthier) than the local gentry. There were middle income earners always, so I suppose it's not literally true that being middle class necessarily meant not working, but there certainly were large numbers of people who lived, often quite modestly, off investments or rents.
ReplyDeleteAs the entrepreneurs came to dominate the new middle class, the rentiers and gentry, so far as purely investment income was concerned, were squeezed out. At the same time, the professions, populated by people who had always worked, could identify themselves socially with the factory owners as against the factory workers.
As for Uni, you win some you lose some. I suppose it's payback time for CB. -SG.