Retailing stores are skyrocketing in sales, cars and houses are sold using credit like never before. On the other hand, politicians are hard at work trying to garner support of a certain group of people - countries' economies are greatly powered by a collective called the middle class.
This phenomenon of the Middle Class is swiping right across the world - who is benefiting, governments, business or people in the middle class?
Politicians are capitalizing on the middle class with rhetoric that appeals to them, or urging the poor to vote for them in order to get them in the middle class - nobody campaigns with a message to make everyone rich, but they preach a message of making leaving stands better and creating jobs; essentially politicians' message rotates around the middle class.
The rise of populism led by certain leaders, due to income inequality, the public tends to go after the wealthy, financiers and elites etc - therefore is in the best interest of the wealthy to cultivate the ground on which the middle class can grow and thrive.
The middle class act as a cushion for the wealthy, this spectacle is working in their favour from a tax perspective where the tax pool is enlarged, secondly, protects them from the poor, the retaliation and tension that might erupt if there is a wide gap between the rich and poor without a substantial number of those in the middle class; for the poor will have to go through the middle class before they reach the upper class - even though, it is often the middle class that is inclined to go against the upper class.
What really is the middle class?
Numbers vary gauged by income - reasonable standards by few researchers regard them as those who earn between $47 000 to $125 000 annually per household, spending at least $100 per day. If you go further, the definition of middle class in developing countries might be those spending on average of $12 a day, inevitably changing the aggregate of their annual income bracket.
Fascinating thing about most people, they regard themselves as the middle class, even those by true definition are in the lower class, basically poor. Somehow, even those who are earning in the region of $1m-$6m annually, this kind of people are suffering from a reference dilemma, they may happen to be comparing themselves with those making much more than them.
Middle class spenders are economic drivers, the rich spend less than they earn, the poor spends all they have and even more in debt.
More than 50% of a middle class family is spent on their house and car payments.
Middle class is over burdened by debt and responsibility of taking care of extended family members, particularly in developing countries. Many of them are the first generation of middle class with other family members with lower income, automatically casting the responsibility to look after the rest.
In mid 1900s mainly in the US and Europe, one income in a middle class household was enough to sustain a family, not affluent, but enough. Came the 80s and 90s where a significant number of mothers started to work like no other time before, however since then coming into the 2000s, two incomes are not enough. Loans are summoned right and left for children's school tuition, housing and cars etc.
What happened right there??! Are we going to put this concern at the feet of inflation or what? What happened?
Let me further pose more questions than answers. Did lobbyists influence law makers to tax more the middle class and the poor, than the rich percentage wise? The CEOs start to earn way more than their average worker?
Did manufacturing jobs get shipped to countries with cheap labour like China, and certain jobs outsourced to countries like India? Houses we live in, have they increased higher than the inflation rate over these years, making them more expensive than ever? Automation and technology, has it taken away good paying jobs?
All I'm asking, is what happened, and more importantly how can the middle class stand up for themselves, how can law makers work in favour of the collective than one segment?
Here is a subtle factor, the bourgeoisie generation, the rise in consumer behaviour, a materialistic driven world, too many things to buy, gadgets added to our budgets. Today we are buying many things we did not spend money on in the past like smartphones, internet and many more. Increasingly fashionable to go on holidays in various countries - although all of these is good and necessary for many.
Role of unions as a bargaining power to make sure the middle class does stay afloat, however union membership in many countries has been deteriorating.
It is in no one's interest for the decline of the middle class, not the government, elites and the people themselves. Those struggling with a shortemism mindset think otherwise, like some autocratic leaders who want to salvage people's ignorance and keep them reliant on them, in order to be continuously voted to remain in power.
One thing is for sure, not only is the middle class a market force, but a global force, however divided by politics.
Countries need to be pro middle class in policies and initiatives, leverage this segment of their population to accelerate their shared economy. The middle class need to fight their way out of debt by developing a conviction of saving their income, rather than engulfed in a behaviour of spending 137% of their income and a little bit more - as for businesses, they can't help it but continue selling as long someone is still buying.