The changing face of the middle class

vivatifosi

There have been related articles posted re this, but not the original ones as far as I can tell.

About 10 days ago, the FT ran a pair of articles on UK social mobility, focusing on the changing face of the British middle class.

The first one:
http://www.ft.com/cms/s/2/abcb8b3e-7ece-11e3-a2a7-00144feabdc0.html

Shows that a large, highly qualified group of people is slipping down the earnings ladder, while very few professions prosper. Those that do prosper tend to be bankers and doctors; whereas traditional professions are slipping down in relation.

The article shows that back in the 1970s, bankers earned less than academics, natural scientists and engineers. It splits the middle class into two groups: the übers, roaring ahead in terms of salaries, and the cling-ons, trying to cling onto a middle class lifestyle instead of diminishing salaries. It also points to those that have disappeared completely from the ranks of high earners: manufacturing managers and further education lecturers for example.

Underlying this is a geographical split, which shows an increasing number of high earners living in London and the South East (hence the follow up articles re house prices etc).

The second article shows the impact this has had in the town of St Albans, and how younger people can no longer afford the housing there:

http://www.ft.com/cms/s/0/5ce35fc6-8f11-11e3-9cb0-00144feab7de.html

The embedded video, which has several graphs showing how the geographical split of high earners, plus different professional earnings, have changed, is also particularly good.

Other theme-linked articles within this FT series include:

Private school fees rocket out of reach for cling-ons:
http://www.ft.com/cms/s/0/719acac2-9b09-11e3-b0d0-00144feab7de.html
Rising UK house prices hit professionals hardest
http://www.ft.com/cms/s/0/98422ee6-9b17-11e3-b0d0-00144feab7de.html
Middle class 'cling ons' squeezed out of London property market
http://www.ft.com/cms/s/0/0664615a-90dc-11e3-a2bd-00144feab7de.html
Uber middle class reshapes Oxford
https://www.ft.com/cms/s/0/ca3e082c-9304-11e3-b07c-00144feab7de.html

Linton

Yes - its happening I guess in line with the great decrease in the labouring working class. Many years ago the educational requirements of the then middle class jobs made them unavailable to the vast majority of the population who left school with little education and no qualifications of any form. The people who did meet the requirements could therefore demand a high wage. Just having an "office job" meant you were on your way to a middle class lifestyle.

Nowadays many more, perhaps most, people can at least meet the basic requirements of an office job. So no income premium is needed. It looks like where the premium is gained now is in those careers which require abilities not emphasised in a standard education eg sports, entertainment, market trading.

michaels

Are the 'cling-ons' actually suffering relative to the population at large or is it more that the Ubers are pulling ahead with renumeraton multiples of median going outside of all previous bounds (5x median, 10x median...100x median) thus meaning those that are only keeping up (with say incomes at twice the median) look, relative to the Ubers, much poorer?

vivatifosi

michaels wrote: »

Are the 'cling-ons' actually suffering relative to the population at large or is it more that the Ubers are pulling ahead with renumeraton multiples of median going outside of all previous bounds (5x median, 10x median...100x median) thus meaning those that are only keeping up (with say incomes at twice the median) look, relative to the Ubers, much poorer?

I think it is both. Clearly the ubers are pulling away from everyone. But in terms of the middle class it raises interesting questions. In the past, one used to go to university to get a good professional career as an engineer, lecturer, architect, etc. Since then, the price of that education has gone up, the value that can be achieved from it has gone down.

The country can only suffer if everyone aspires to be a doctor or a banker, we will become even more polarised and the emphasis on our banking sector will become even greater. Though I guess we may get a better NHS if we churn out doctors by the score.

lentrix92

Interesting suff - thx

Conrad

I know so many ordinary folk with lots of property and considerable wealth that are not these 'ubers' mentioned here. I suspect the sort of people I meet would not show up on such surveys as much of their income is via self employment and thus their true earnings are masked.

BobQ

Conrad wrote: »

I know so many ordinary folk with lots of property and considerable wealth that are not these 'ubers' mentioned here. I suspect the sort of people I meet would not show up on such surveys as much of their income is via self employment and thus their true earnings are masked.

I know quite a few like that too, many of them filling public sector jobs as consultants. Public sector saves on the direct employment costs and the future pension costs but pays twice that to them as self employed consultants. Of course many of them are the same people that left with a nice redundancy package only to be contracted to do the same job.

http://www.telegraph.co.uk/health/10264129/NHS-spends-more-than-1-billion-on-redundancy-payouts.html

grizzly1911

vivatifosi wrote: »

I

The country can only suffer if everyone aspires to be a doctor or a banker, we will become even more polarised and the emphasis on our banking sector will become even greater. Though I guess we may get a better NHS if we churn out doctors by the score.

What is the saturation point for bankers, brokers and financial services bearing in mind many back office functions are outsourced offshore? No doubt there is also a turnover/burnout rate and not all can make a killing in such a short time. No doubt high earnings often align to an expensive lifestyle not necessarily long term asset retention.

I read somewhere that being a doctor was good (Asian view?)as it provides a career for life if one isn't stupid. Many others having a more limited potential due to constant change and competition bumping people out.

purch

vivatifosi wrote: »

Shows that a large, highly qualified group of people is slipping down the earnings ladder, while very few professions prosper. Those that do prosper tend to be bankers and doctors; whereas traditional professions are slipping down in relation.

The day someone working for a Bank started to consider what they did a "Profession" was the start of the slide into the abyss :eek:

grizzly1911 wrote: »

What is the saturation point for bankers, brokers and financial services bearing in mind many back office functions are outsourced offshore? No doubt there is also a turnover/burnout rate and not all can make a killing in such a short time. No doubt high earnings often align to an expensive lifestyle not necessarily long term asset retention.

We hit that point in about 1998.

After that they had to start making up stuff to buy and sell, so they could "invent" profits.

getmore4less

We have new career choices the IT industry is(if you choose the right sector) is a relatively high paying even at the lower end jobs.

Many that would have been career engineers are now in IT still earning well into the "middle class" salary ranges. Although the UK is still a world leader in Engineering innovation and good money is available.

As above the trend to push more into higher education has created a glut of nearlies/wanabees.
Look good on paper but in reality are not that smart and have aspirations beyond their abilities, we have a trend for quantity over quality.

N1AK

vivatifosi wrote: »

Underlying this is a geographical split, which shows an increasing number of high earners living in London and the South East (hence the follow up articles re house prices etc).

Is it not possible that this makes the numbers somewhat misleading? Someone who is middle-class in Bulgaria would probably have a wage nothing like someone middle-class in Germany or Britain. If there has been an increase in the wage, and cost of living, gap between London and the rest of the UK then that doesn't necessarily mean that a lecturer in Manchester is any worse off just because a banker in London now earns more than him.

I'm not saying there aren't a myriad of issues and that some of our pay priorities seem a little 'odd' at times, but I know the 'manufacturing managers' at our company in the East Midlands aren't feeling the pinch even if they haven't been getting pay rises in line with London professionals.