The middle class: key to the economy -- and the mid-term election

Rebuilding middle-class confidence is crucial to restarting the economy. More than anything else, steady, well-paying Jobs are crucial to middle-class confidence. Election 2010 could hinge on that.

Kevin Lamarque/Reuters
Slabs for houses not yet built sit idle in a housing development in Gainesville, Virginia. Millions of middle-class families have had their dreams of home-ownership shattered because of the recession. Millions of middle-class jobs in the construction industry have been lost.

In the early 1970s I worked on a construction crew, building houses on the frontier between suburbs and ranchland outside Austin, Texas. It was great to be paid for active, interesting work, especially considering my modest (and I do mean modest) skills with a hammer and saw.

Week after week our crew framed single-family houses in freshly carved cul-de-sacs. Utility workers, road builders, and concrete layers preceded us. Roofers, plumbers, electricians, sheetrockers, and finish carpenters followed. The houses would sell as quickly as we built them.

One day, the whole enterprise abruptly ground to a halt. The recession of 1973-75 had hit hard. In the blink of an eye, there were no buyers. And no buyers meant no paychecks.

If you think of those charts that show the ups and downs of the economy, we and all those once-eager but quickly gone buyers were situated well within the huge bell curve called the middle class. The middle class can feel safe – even rich – when times are good. That optimism propels purchases, creating jobs that in turn feed more optimism. But there is little margin when the economy tanks. Like a chain of dominos, hundreds of thousands of jobs tumble.

A Monitor special report by Cynthia Anderson (you can read it here) shows how the Great Recession from which we have just emerged (officially, at least, according to the National Bureau of Economic Research, if not convincingly) battered the middle class by almost every measure. There are more than statistics and economic cycles to this story. Cynthia’s family portraits measure the quiet, real-life dramas that have been playing out throughout the middle class, the dreams deferred as the economy collapsed, the downscaling of expectations, the dissipation of optimism.

In the United States, as you’ll see in our report, to be middle class can mean wanting to own a home, to have a car, college for children, health insurance, a decent retirement income, and a family vacation. But the most basic want is a job. A job is what stands between hope and fear for huge numbers of people. Economic analysts Abhijit V. Banerjee and Ester Duflo of the Massachusetts Institute of Technology concluded in an examination of the global middle class that “nothing seems more middle class than the fact of having a steady, well-paying job.”

Those adjectives are important. A job means basic security. “Well paying” and “steady” make a big difference in disposable income, savings, education, possibility. The more secure the job, the more confident the jobholder. That can mean taking a risk on a new business or commissioning a home improvement.

The soaring home foreclosure rate is powerful evidence that basic security has been deeply shaken. The more general foreclosure of possibility brought on by the recession has also been devastating – the trip not taken, the cafe not visited, the dental visit postponed. Each decision has a knock-on effect: A business loses money because it isn’t patronized, another job is cut, ambition cools.

Turning vicious cycle into virtuous is all about job creation. Reasonable people can disagree about whether government is doing the right thing – or should be doing anything at all – to bring about the return of those steady, well-paying jobs. With the unemployment rate stuck near 10 percent, the election of 2010 hinges on this issue.

But few disagree that a confident middle class is a crucial need. That’s true worldwide. Though being middle class means different things in Bangladesh and Germany, growth of the middle is a force in self-government and social progress. Ten years ago, there were 430 million middle-class people in the world, according to the World Bank. By 2030, there will be 1.15 billion. These are not just passive consumers. In China and India, which account for most of the global growth, a rising middle expects a better life and more of a say in government.

In many ways, the middle class is the hope of humanity. What’s needed most within that big bell curve is a return of hope.

John Yemma is the editor of
The Christian Science Monitor.

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