Death of the Middle Classes?

kabayiri

An article on Newsnight last night repeated a theme I have started to come across more recently.

An ex advisor to DC and friends presented the piece, with the basic premise that "technology" is going to signal the death knell of the middle classes over time.

It's an interesting premise. In the latter half of the 20th century technology eliminated vast numbers of blue collar jobs, so why shouldn't the same happen for white collar roles in the 21st century?

Areas for change cited included Legal Services and Health.

Since the economic dip, 4 out of 5 jobs created here are no below £8 per hour. Perhaps this process is already on the way.

Graham_Devon

kabayiri wrote: »

Since the economic dip, 4 out of 5 jobs created here are no below £8 per hour. Perhaps this process is already on the way.

This is the bit on newsnight which really stood out to me.

I guess this isn't a problem in itself, so long as it doesn't just mean that benefits make up a larger and larger part of peoples incomes.

If 4 out of 5 jobs created are now paying less than £8 an hour, then we must start looking at the cost of essentials and start looking at anything we can do to make things cheaper.

There are things that can be done, especially on rent and homes, just a lack of ambition and a larger group blocking such things at the moment.

Morrisons seem to have also caught on to the fact that families can no longer justify runs to the out of town shops, so they have stopped building them, are going to focus on internet delivery for the monthly shops and smaller convinience stores in towns that people can walk to in order to save the money spent on fuel. They also suggested families were shelving the second car (so can't get to the out of town supermarkets when the car is at work) as they can no longer afford it, which may well be true of their client base, but not sure that stacks up overall.

So the private sector seems to be tapping into the fact families have less income, just got to wait for the government to do the same. Could be along time coming considering their big project is HS2 which will be unaffordable for the majority!

wotsthat

kabayiri wrote: »

Since the economic dip, 4 out of 5 jobs created here are no below £8 per hour. Perhaps this process is already on the way.

Possibly but isn't it more likely that recessions aren't known for an expansion in wage growth? Things which are normal in recessions are used to extrapolate into weird and wonderful conclusions.

I think this downturn has ground on for so long that pessimism is being 'built in'.

Carl31

Being 'Middle Class' these days seems to mean 2 working adults in a household, meaning they are able to afford greater luxuries

Surely truly middle class would mean a professional high earner, leaving the other adult with no need to work, or to work part time for pocket money?

I think middle classes (along with any other class) died ages ago

Loughton_Monkey

Something similar was being said in the mid 1970-s. Never happened anything like what was predicted.

I always think these future predictions are too "straight line". People look at trends, project them forever, and dream up a new paradigm. If I've learned anything, it is that virtually nothing in this world goes 'straight line' for long.

The thinking is also derived from recent successful business models. Take Amazon for example. We envisage (a) a handful of rich entrepreneurs, board, top management, exec. all highly paid. (b) A small number of excellent 'techies' who design and build the business model and processes, and then (c) a relatively high number of 'low level' jobs overseeing the packing, and courier delivery. Doesn't need a lot in the 'middle'.

But this neglects two things. Firstly, Amazon would (presumably does) use a growing band of mid-management 'thinkers' to do marketing, dream up new initiatives (like Amazon Local, patnership etc..) and drive them through. Secondly, think of all the 'middle income' jobs created in their supply chain as small businesses gear up to supply Amazon with everything under the sun...

[I'm trying hard not to count the number of middle HMRC bods required to make these jokers pay a bit of tax....]

Personally, I would predict that any measurement of wage distribution in the future will continue to show broadly the same shape as now.

PS Don't agree the term 'middle class' as I've never seen any good clear definitions of what it means. I was a poor council house lad, ending up earning well above average. There are presumably many sons of doctors, lawyers, etc. born in 6-bed country houses delivering pizzas or driving vans for a living. Which 'classes' do we belong to?

Loughton_Monkey

Graham_Devon wrote: »

.....If 4 out of 5 jobs created are now paying less than £8 an hour, then we must start looking at the cost of essentials and start looking at anything we can do to make things cheaper....

I can't see the logic here. An explanation might be helpful to the readers....

Presumably, if and when we reach a stage when 4 out of 5 new jobs are paying between £30K and £50K, you need the government to start looking at how to increase prices?

kabayiri

To add specifics ....

Legal Search now takes much less manpower resources than before due to technology. It doesn't take a genius to work out that fewer people can do more. Those "fewer" can command a bigger share of the pie, or the increased profitability will go to the bosses. That's just the way it is.

Same with medicine. Remote diagnosis, or personal monitoring systems, can enable fewer people to deal with more cases.

This is NOT a UK phenomena. This is happening across countries. It seems the solution is to either upskill or drop down the league tables.

Singapore was held up as an example of upskilling.

kabayiri

wotsthat wrote: »

Possibly but isn't it more likely that recessions aren't known for an expansion in wage growth? Things which are normal in recessions are used to extrapolate into weird and wonderful conclusions.

I think this downturn has ground on for so long that pessimism is being 'built in'.

We are in the middle of the adjustment process. To get a true picture I agree it would require perhaps looking back years later. Only future Historians will know the true context.

MFW_ASAP

Graham_Devon wrote: »

If 4 out of 5 jobs created are now paying less than £8 an hour, then we must start looking at the cost of essentials and start looking at anything we can do to make things cheaper.

There are things that can be done, especially on rent and homes, just a lack of ambition and a larger group blocking such things at the moment.

Are you suggesting that we create a long-term solution to fix a short-term problem?

As someone has pointed out, you can't look at job creation in an economic down turn and decide that this is the 'new norm'. Neither can you change the way the economy is set up in order to fix a problem that may not exist once the economy recovers.

kabayiri

Carl31 wrote: »

Being 'Middle Class' these days seems to mean 2 working adults in a household, meaning they are able to afford greater luxuries

Surely truly middle class would mean a professional high earner, leaving the other adult with no need to work, or to work part time for pocket money?

I think middle classes (along with any other class) died ages ago

It's a poor term. I only used middle class because the show did.

It really refers to the group which has emerged in the last couple of hundred years, primarily as a result of the first industrial revolution.

The contrasting society was one of Autocrats and Serfs in Russia, or even Pharaohs and the workers in ancient Egypt.

CLAPTON

kabayiri wrote: »

To add specifics ....

Legal Search now takes much less manpower resources than before due to technology. It doesn't take a genius to work out that fewer people can do more. Those "fewer" can command a bigger share of the pie, or the increased profitability will go to the bosses. That's just the way it is.

Same with medicine. Remote diagnosis, or personal monitoring systems, can enable fewer people to deal with more cases.

This is NOT a UK phenomena. This is happening across countries. It seems the solution is to either upskill or drop down the league tables.

Singapore was held up as an example of upskilling.

or of course, new entrants can enter the field and so the price will reduce