Occupational change in itself cannot explain the decline of the European middle class. But it could be a threat to its sociopolitical foundations
There is a lot of talk about job polarization, which could help explain the decline of the middle class. But is there an increasing polarization of occupational structures in Europe? Research from Eurofound reveals that polarization is just one of a variety of typical patterns of occupational change in recent decades.1 In fact, the most pervasive pattern is one of occupational upgrading, with high-skilled and high-paid occupations growing much faster in terms of employment than the rest. In Europe, we could only identify a more or less generalized shift towards job polarization after 2008, probably as a result of the accelerated economic restructuring, structural reforms and austerity triggered by the crisis.2 Once the European economy goes back to normal (if it ever does), the change in occupational patterns is likely to revert to the previous diversity.
Explaining the different patterns
Why did a variety of occupational changes appear in Europe in recent decades? Some researchers trace these transformations back to exogenous developments in technology (the IT revolution) and globalization.3 I am more sceptical, as the observed diversity of patterns suggest that institutions and policies played a bigger role than is usually assumed.4 The rather pervasive pattern of upgrading may just be the occupational correlate of economic growth. More so, the more particular pattern of job polarization is likely to be associated with institutionally driven processes of labour market flexibilization and the crisis of traditional industrial relations systems. For instance, the expansion of low-paid employment in Germany in recent years was facilitated by the flexibilizing labour reforms of the early 2000s and by the increasingly limited coverage and levels of collectively agreed minimum wages.
What may be the effect of these occupational changes on the social structure? To the extent that there is a correspondence between the occupational and the social structure, a process of job polarization could be taken as a precursor to the decline of the middle class. Even the more pervasive pattern of upgrading could undermine the employment opportunities of the middle class, leading to an increasing polarization between the upper classes and the rest. But although this is a valid question to ask and research, we should be cautious about simple extrapolations from the occupational to the social structure.
Changing types of jobs
In everyday use, the middle class is considered to be not only those in the middle of the social hierarchy, but also as those who have a comfortable standard of living but are not rich and therefore still need to work for a living. The expansion of this social class to a position of majority in post-war developed economies was the result of wider developments in the political economy of capitalism (such as the creation of the welfare state and industrial relations systems), not of changes in the occupational structure. Changes in the latter did not bring about middle-class society, nor will they lead to its demise.
But although the middle class is not existentially attached to any particular set of occupations, at any point in time it will typically be associated with some types of jobs. For instance, the post-war middle class (according to the earlier definition) was typically associated with skilled and semi-skilled industrial occupations, as well as with clerical and administrative jobs. Research from Eurofound shows that both categories of workers have been declining in relative (and often in absolute) terms in recent decades, while social welfare and business service occupations have been expanding, generally with a higher skills profile. These changes in the occupational composition of the middle classes are surely affecting its typical work experience, lifestyles and other attributes. In other words, these occupational changes are not destroying but are certainly transforming the middle class.
It is perhaps in this latter respect that, indirectly, the above-mentioned changes in the occupational structure may involve some kind of existential threat for the middle class. The typical work experience and lifestyles of the post-war middle classes may have been important factors in sustaining the political economy developments previously mentioned. For instance, many European industrial relations systems were strongly anchored in the skilled and semiskilled industrial segments of the middle class that are slowly disappearing. Thus both patterns of polarization and upgrading are to an important extent an epiphenomenon of this process of late de-industrialization.
The extent to which union representation and industrial relations systems can adapt to the new composition of the middle classes, or the extent to which these new middle classes will support the welfare model and redistribution policies to the same extent as their forerunners, may be important factors in its survival in the long run.
1. For more details, see http://www.eurofound.europa.eu/observatories/european-monitoring-centre-on-change-emcc/european-jobs-monitor. See also Fernández-Macías, E. (2012). Job Polarization in Europe? Changes in the Employment Structure and Job Quality, 1995-2007. Work and occupations,39(2), 157-182, and the contributions to Fernandez-Macias, E., Hurley, J., & Storrie, D. (Eds.). (2012). Transformation of the Employment Structure in the EU and USA. Palgrave Macmillan.
2. Hurley, J., Enrique, F. M., & Storrie, D. (2013). Employment polarisation and job quality in the crisis: European Jobs Monitor 2013. Eurofound, Dublin.
3. See for instance Goos, M., Manning, A. and Salomons, A. (2014) "Explaining Job Polarization: Routine-Biased Technological Change and Offshoring." American Economic Review, 104(8): 2509-26.
4. Fernández-Macías, E., & Hurley, J. (2014). Drivers of Recent Job Polarisation and Upgrading in Europe: European Jobs Monitor 2014. Eurofound, Dublin.
Photo credit main picture: Tom Page / P4120010 via flickr