So exactly who are the middle classes?
Posted by: Roy T on 18 October 2004
Something to mull over while as parties advertise their economic policies prior to the next election.
CONFUSING FORMULAE THAT MUDDY THE WATERS OF THE FISCAL DEBATE
By Vanessa Houlder
Published: October 18 2004 03:00 | Last updated: October 18 2004 03:00
CONFUSING FORMULAE THAT MUDDY THE WATERS OF THE FISCAL DEBATE
So exactly who are the middle classes? The most shocking fact for many people is that average incomes are much lower than we often think, writes Vanessa Houlder. Depending on whether economists choose individuals or households, net or gross income, the average - defined by the mean or the median - and a subset or the whole population, they can define "average income" as anything between £9,800 and £42,200. This ambiguity is at the heart of the debate about the middle-class tax burden. Do the terms "middle class" and "middle Britain" refer to people who are averagely well-off? Or do they refer to a more affluent group: people who are close to or above the £36,165 threshold for higher rate tax? Politicians and commentators tend to use the latter, according to an Institute for Fiscal Studies briefing paper by Matthew Wakefield. "The residents of middle Britain are often explicitly or implicitly identified as those on the fringe of being higher-rate income taxpayers, or richer . . As a matter of fact, higher-rate taxpayers do not generally come from the middle of the income distribution but are drawn almost exclusively from the top third and mainly from the richest tenth." This confusion may arise because politicians and journalists using the term "middle classes" simply over-estimate the income of the majority of the public. But misconceptions about the income distribution also arise because the average income - defined by dividing total income by the number of people - is skewed by the relatively small number of people receiving very large incomes. Under this definition, somebody on an average income would be richer than two-thirds of the population, according to the IFS. But the picture changes if the analysis is restricted to households with at least one full-time worker. By excluding many pensioners and other poor households, the median gross household income rises from £21,700 to £33,000. Another possible justification for using the term "middle class" to describe people whose average income approaches that of higher-rate taxpayers is that this loosely tallies with the definition of market researchers. Pollsters typically define the middle classes as the "ABC1s" whose occupations range from solicitors to salesmen. This type of classification could also justify another use of the term middle Britain: the social groups C1 and C2, which are in the middle of the socio-economic groupings. These skilled non-manual and manual workers, often seen as important swing voters, have a median gross household income of about £27,000. However justified, these differing interpretations of "the middle" muddy the waters of the debate about tax. But as the arguments over Labour's tax policies get more heated in the run-up to the next general election, there is little prospect that politicians and commentators will agree on a single definition.
CONFUSING FORMULAE THAT MUDDY THE WATERS OF THE FISCAL DEBATE By Vanessa Houlder
CONFUSING FORMULAE THAT MUDDY THE WATERS OF THE FISCAL DEBATE
By Vanessa Houlder
Published: October 18 2004 03:00 | Last updated: October 18 2004 03:00
CONFUSING FORMULAE THAT MUDDY THE WATERS OF THE FISCAL DEBATE
So exactly who are the middle classes? The most shocking fact for many people is that average incomes are much lower than we often think, writes Vanessa Houlder. Depending on whether economists choose individuals or households, net or gross income, the average - defined by the mean or the median - and a subset or the whole population, they can define "average income" as anything between £9,800 and £42,200. This ambiguity is at the heart of the debate about the middle-class tax burden. Do the terms "middle class" and "middle Britain" refer to people who are averagely well-off? Or do they refer to a more affluent group: people who are close to or above the £36,165 threshold for higher rate tax? Politicians and commentators tend to use the latter, according to an Institute for Fiscal Studies briefing paper by Matthew Wakefield. "The residents of middle Britain are often explicitly or implicitly identified as those on the fringe of being higher-rate income taxpayers, or richer . . As a matter of fact, higher-rate taxpayers do not generally come from the middle of the income distribution but are drawn almost exclusively from the top third and mainly from the richest tenth." This confusion may arise because politicians and journalists using the term "middle classes" simply over-estimate the income of the majority of the public. But misconceptions about the income distribution also arise because the average income - defined by dividing total income by the number of people - is skewed by the relatively small number of people receiving very large incomes. Under this definition, somebody on an average income would be richer than two-thirds of the population, according to the IFS. But the picture changes if the analysis is restricted to households with at least one full-time worker. By excluding many pensioners and other poor households, the median gross household income rises from £21,700 to £33,000. Another possible justification for using the term "middle class" to describe people whose average income approaches that of higher-rate taxpayers is that this loosely tallies with the definition of market researchers. Pollsters typically define the middle classes as the "ABC1s" whose occupations range from solicitors to salesmen. This type of classification could also justify another use of the term middle Britain: the social groups C1 and C2, which are in the middle of the socio-economic groupings. These skilled non-manual and manual workers, often seen as important swing voters, have a median gross household income of about £27,000. However justified, these differing interpretations of "the middle" muddy the waters of the debate about tax. But as the arguments over Labour's tax policies get more heated in the run-up to the next general election, there is little prospect that politicians and commentators will agree on a single definition.
CONFUSING FORMULAE THAT MUDDY THE WATERS OF THE FISCAL DEBATE By Vanessa Houlder
Didn't Karl Marx write the book on this? 
(Das Kapital). If I remember correctly he said that there were only two main classes - those that owned capital and the means of production, and those that sold their 'labour power' to them - the proletarians. The so-called middle classes were the strata of society who carried out duties in the service of the capitalists (such as management, judges etc) and who aspired to owning their own property/capital. Definitions/ideas about who is/is not middle class have become muddied with the passage of time, but the distinction between the owners of capital/means of production and the rest of us remains valid.
Steve, I don't follow your argument. I was born into a working class family and I am MUCH better off under this Labour Gov. So what does that make me? If the Duke of Westminster is less rich by a fraction (even though he owns 'half' of central London) than he was under Thatcher does that make him middle class?
(Das Kapital). If I remember correctly he said that there were only two main classes - those that owned capital and the means of production, and those that sold their 'labour power' to them - the proletarians. The so-called middle classes were the strata of society who carried out duties in the service of the capitalists (such as management, judges etc) and who aspired to owning their own property/capital. Definitions/ideas about who is/is not middle class have become muddied with the passage of time, but the distinction between the owners of capital/means of production and the rest of us remains valid.
Steve, I don't follow your argument. I was born into a working class family and I am MUCH better off under this Labour Gov. So what does that make me? If the Duke of Westminster is less rich by a fraction (even though he owns 'half' of central London) than he was under Thatcher does that make him middle class?
Marx lived in the age of the true capitalists and robber barons. Nowadays there are few true capitalists, by which I mean individuals who entirely own and control the capital/means of production.
One of the most obvious of those few true capitalists was, until recently, Bill Gates. It will be noted that he didn't own a private jet until he started to lose the absolute control over his own company - instead he flew economy class. Now Microsoft has private jets.
Most corporations are now controlled by groups of "managers" who have less financial and emotional investment in the company and more interest in how they benefit from the control. In the 1950's on average the highest paid employee of a company earned twelve times the amount earned by the lowest paid employee. By the 1980's the highest paid earned sixty times the lowest paid. John Ralston Saul (author of "Voltaires Bastards") calls these managers the "courtesan" class. I refer to his figures.
I see the world in terms of Naim because I am obsessed:
Upper Class:
552/500/DBL or NBL
Middle Class:
252 282 SCap/ 300 250/ SL2 SBL
Lower Middle:
202 112x Flatcap/ 200 150 / Ariva
Lower:
Nait 3 (me)
Deane
One of the most obvious of those few true capitalists was, until recently, Bill Gates. It will be noted that he didn't own a private jet until he started to lose the absolute control over his own company - instead he flew economy class. Now Microsoft has private jets.
Most corporations are now controlled by groups of "managers" who have less financial and emotional investment in the company and more interest in how they benefit from the control. In the 1950's on average the highest paid employee of a company earned twelve times the amount earned by the lowest paid employee. By the 1980's the highest paid earned sixty times the lowest paid. John Ralston Saul (author of "Voltaires Bastards") calls these managers the "courtesan" class. I refer to his figures.
I see the world in terms of Naim because I am obsessed:
Upper Class:
552/500/DBL or NBL
Middle Class:
252 282 SCap/ 300 250/ SL2 SBL
Lower Middle:
202 112x Flatcap/ 200 150 / Ariva
Lower:
Nait 3 (me)
Deane
quote:
Originally posted by bhazen:
Affording a "Page 3" girl or aspiring model means you're rich.
...but have no class.
Regards,
Davie