The Far-Reaching Consequences of the Erosion of the Middle Class
by Rohit Prasad
December 18, 2022
by Rohit Prasad
December 18, 2022
In November 2022, India was shocked by the murder of Shraddha, a 28 year-old girl, by her boyfriend, Aaftab, who was of a different religion. Shraddha’s parents had refused to acknowledge the relationship, and the couple had recently moved from Mumbai to Delhi. Aaftab was a reasonably successful food blogger and Shraddha had worked as a journalist. Allegedly, Aftab killed her in a fit of rage after she repeatedly pleaded that they marry.
This was not the first such scandal emerging from middle-class India. Earlier, such lurid tales were the preserve of the upper crust and were breathlessly followed by those of lower social status, or were the sorry features of life among the poor, usually ignored. Sadly, across the world, such scandals are becoming common within other classes as well.
The heterogeneous group of people who fall between the social elites and the toiling masses, used to be the glue that held societies together, the people who believed they were neither needy like the poor, nor corrupted by an overabundance of material riches like the elite. They prided themselves on a worldview that was based on broader, humanitarian concerns.
Their self-respect and their sense that they were “better” than the upper crust or the toiling masses was a source of social and political stability. They mitigated the class struggle, promoted social harmony, and generally served to protect humanitarian mores. Their values tended to become those of mainstream society. With their emphasis on upward mobility, they were also a positive force for economic development.
Indeed, the middle-class outlook was based on material achievement as well as a sense of being above material concerns, expressed in intergenerational harmony as the younger generation would strive to get ahead without losing respect for the older generation that had achieved only middling gains. A shift in values across generations would happen in a gradual, harmonious way.
The literature on economic inequality generally focuses on the widening gulf between the top and bottom 20% of the population, while the fortunes of the middle segments are often ignored. This is unfortunate, given the vital role they play in society.
Today, those in the middle of the income spectrum find it hard to pay for housing, education, and healthcare. Costs have risen much faster than their incomes. For instance, while the incomes of US working class households have been stagnant since the 1980s, medical costs have gone up more than two and a half times, and educational expenses have increased almost six-fold. Employment opportunities are shrinking and volatile in a world of rapid automation. Thus, they no longer sit on a perch far above material concerns. They are no longer able to fulfill their vital role in nourishing their communities.
A study shows that in Europe, even before the Global Financial Crisis of 2008, the size of the cohort with incomes between 60% and 200% of the median income in their countries, was declining in 13 out of 26 countries. Major economies like Germany and the United Kingdom were part of the group of countries experiencing this erosion. After the financial crisis, the erosion of this class only accelerated. Nineteen countries experienced a similar decrease. In the USA, the share of middle class income fell from 62% in 1970 to 43% in 2014. Thus, the population group has been decreasing in numbers, in addition to earning a disproportionately smaller share of the income pie.
A society with a vanishing middle becomes unstable, prone to polarization and disharmony. From being reliable guardians of the middle ground, the middle class becomes an abettor of sharp political and social divisions. Waves of immigration, resulting from climate change and geopolitical conflict only add to the pressures on their way of life. The rise of far-right formations in Europe and the US shows the impacts of a constrained middle class.
While the middle class is shrinking in the US and Europe, it is expanding in emerging economies, at least in terms of income. In India its size is expected to increase 10-fold in percentage terms, from 5% of the population in 2007 to 41% of the population in 2025. The rapid growth of spending on non-essentials is slated to make India the most promising consumer market in the world.
Unfortunately, societies with a large and growing middle class are not immune to the instabilities that characterize societies where that cohort is shrinking. In such societies it is possible that there can be large numbers of middle-income earners without the accompanying values that promote stability. An important cause of this new trend is the stratospheric rise in the aspirations of young members of the middle class without a comparable rise in stable professional opportunities.
Describing the drivers of illegal migration of poor people from Bangladesh to European countries, the novelist and sociologist Amitav Ghosh argues that the digital revolution has reduced the distance between different classes of society in terms of awareness about the good things of life. A paddy farmer in Bangladesh is more aware of the lifestyles and indulgences of the rich than ever before. He or she is familiar with the cityscapes of European cities where his brethren have emigrated. On the other hand, the digital economy has simultaneously widened the gulf between the classes in terms of the actual opportunities for bridging ever-increasing material divides.
The resulting dissonance sweeps away the last vestiges of middle-class values. One manifestation of this phenomenon is the increasing incidence of abuse of parents by adult children. A survey by the NGO Help Age Asia stated that in India 35% of elders suffered abuse at the hands of their sons and 21% reported abuse by their daughters-in-law.
The rapid urbanization being experienced by emerging economies is bringing droves of young people from rural areas into urban agglomerations where they have very little institutional support. Thus, urban areas are becoming home to masses of drifting young people with very few social or moral moorings or stable support structures.
In both kinds of societies, those with shrinking middle classes, and those in which they are expanding, there is a breakdown of traditional family and state support structures without the strengthening of newly formed communities.
The family was the citadel of the middle class, its trophy quietly held aloft amidst the opulence of the rich and the squalor of the poor. The decline of the family signals the breach of this bastion, the disappearance of a way of life that held society together.
Both Aaftab and Shraddha had broken free of family structures and struck out in a new city. Cut off from her family, Shraddha alerted therapists and even the police about Aaftab’s dysfunctional behavior. But the warnings went unheeded. With all the dazzling growth of technology and opportunities, something vital seems to have been lost.
The imperatives for public policy are clear: the provision of affordable and quality housing, healthcare, and education to restore the dignity of the middle income group, and a focus on the generation of good jobs to restore their optimism for the future prospects of their children. The examples of countries such as Canada and Norway where the middle classes have expanded should offer some best practices in this regard.