Concerns about the European middle class – part 2

Employment & Income,Inclusive Economy,Sahel Watch20 May 2015Frans Bieckmann

In my last blog post, I explained why The Broker sees Europe as an important new focal point, with our dossier on the Middle Class as a first area of attention.

The large majority of Europe’s people belong to the middle class. Or at least, they wish to belong to it, and say that they belong to it. In political terms, the middle class is crucial, as its members are not only the largest population group, but are also the most politically active. For many years, the middle class was the foundation on which social-democratic, Christian democratic, conservative and liberal centrist parties thrived in Europe.

The increasing insecurity among the middle class is leading to shifts in the political landscape of Europe. In many European countries, we are witnessing a process of polarization and fragmentation. The stability of Europe is at stake and, consequently, the cooperation between its member states. While the emergence of the middle class was crucial for economic development and cooperation in Europe, if nothing is done to stop it, the erosion of the middle class could lead to far-reaching social degradation across the continent. The Broker’s Middle Class dossier shows that these trends were set in motion long before the financial crisis of 2008 and the subsequent crisis of the euro.

One of the crucial conclusions of this dossier is that this instability is closely related to a sharply defined division within the middle class. In her article, Ursula Dallinger divides the working population into five quintiles, the middle three of which comprise the middle class. The upper middle class, and partly the middle middle class, are benefiting considerably from globalization and automation, though many trends suggest that that may also change. But the lower middle class is already paying the price, in social and economic terms. Cutbacks in social security and the flexibilization of labour have created a group of ‘working poor’, those with jobs who can hardly make ends meet with their salaries. That applies not only in southern Europe, but also to countries like Germany.

Even if we define the middle class not purely in terms of level of income, but also as having a steady job and income and not being under threat from minor shocks and changes, as we do in the article ‘Who are the ‘middle’?’ by Josefine Ulbrich, the conclusion is very much the same. Increasingly precarious and flexible employment, declining social security, the threat of jobs being replaced by robots, and of course, rising unemployment in many countries as a result of the financial and euro crises, are making a large segment of the population vulnerable and insecure. And it is the middle groups who are being affected the most, alongside those at the bottom of the social scale, who have always found themselves in dire circumstances.

We hope that the articles in this dossier, together with our policy recommendations, will help to spark a lively debate in Europe.

Another Perspective is The Broker’s blog. The title reflects The Broker’s ambition to look at globalization issues in different ways. Through this blog, we also keep our followers up to date on matters that concern us.