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What of the middle class? What indeed? March 21, 2013

Posted by WorldbyStorm in Economy, Irish Politics.
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There’s a piece in the SBP at the weekend that manages to encapsulate perfectly a certain world view. Under the line ‘How long will the middle class suffer in silence?’ Martha Kearns states…

“I’m as mad as hell and I’m not going to take this any more!” The iconic cry from Peter Finch’s character in the movie Network could be adapted to become a battle cry for Ireland’s increasingly distressed middle-income earner.
Spiralling ever downwards under a mountain of debt, the so-called ‘squeezed middle’ is finding it hard to breathe.

And:

This demographic of mainly private-sector workers is rarely heard on Joe Duffy’s daily radio show or seen at the latest anti-austerity march. More prone to silence, they probably don’t feel they have as much of a right to moan with the rest of them.

I find this most interesting that she should push the public/private sector divide. Though she seems a bit hesitant about it. Clearly some are public sector. It would be useful to know how they sneak in under the wire, so to speak.

Of course it’s impossible to quite make this case without it seeming, well, a little disproportionate. Hence the following sentence or two:

They are still employed, still (just about) able to pay their bills and maybe, just maybe, able to save up to go on a break to the sun for a week or two in the summer. So it’s hard to feel too much sympathy towards them.

Well yes. It is a problem. Isn’t it? I mean, why the sense of grievance when those on, say, significantly lower incomes find it vastly more difficult to do any of those things?

It’s important to remember that, while they are not covered by the Croke Park agreement, they have already had pay cuts similar to, or higher than, those mooted under the public sector deal and would be ecstatic at the idea of a pay freeze. Also, Budget 2013, with its property tax, PRSI contribution increases, motor tax hikes, cuts to child benefit and maternity benefit tax, was not kind to these people.

Looking at their pay cheques now, they would probably laugh at the term ‘middle-income earner’.

Actually, that’s nonsense, and she should know it. Now, I’m not PS myself, labouring under a contract with the PS. But… fairs fair. There have been wages cuts for PS workers long before those ‘mooted under the PS deal’. And they existed before CPI. There’s already – and she should know this, she really should, a ‘pay freeze’. Then there’s the small matter that unlike the private sector where the breakdown was some cuts, mostly wage freezes and in other instances wage increases, in the public sector there were systemic across the board wage cuts. Oh yeah, and pension contribution increases, and all the various bits and pieces imposed by CPI as well. And of course ‘Budget 2013’ impacts in precisely the same way upon public sector workers as private sector workers.

Still, perhaps it’s best that she moves onto a new target.

…it was with a heavy heart that this section of society examined last week’s new government plan for troubled mortgages, as they knew that if anyone was to benefit from it, it wouldn’t be them.
The Central Bank didn’t mess around: it warned that repossessions were on the cards and families would be losing their homes; even those engaging with lenders could lose their homes.
Of course, this is distressing news for the people who are unable to pay their mortgages. The latest figures show that around 144,000 homes are in arrears, with those already structured and buy-to-lets bringing it up to 180,000.

Now some would suggests that for all the obvious caveats that 180,000 are in a pretty dismal place and many, perhaps most, through no fault of their own but due to the excesses of a market which was cheered by political, media and economic commentators as being at the exemplar of the success of this state.

But…

However, while it is distressing, they are being offered a way out. Long-term deals could result in them downsizing to a more affordable home or continuing in their current homes with lower levels of debt, if they get some sort of write-down.

And…

But what about the 420,000 mortgages that continue to be paid? For sure, some of those people have no problems meeting their debts, but there is nothing in the plan for those who are struggling to pay their mortgages but continue doing so.

These are the people who never complain or take to the streets. They’re made to feel lucky – guilty even – that they still have a home, a job and some sort of lifestyle.

Actually that raises the thought that isn’t that precisely what PS workers are often made to feel. indeed looking back a few sentences in her own story, isn’t that what she is sort of implying?
Anyhow, back to the rationale as to why the middle class are different…

It doesn’t matter that they have worked for 15 to 20 years to get to their position in their careers only to be back earning wages they were taking home ten years ago – only now they also have a negative equity mortgage and a family to support.

And:

But [Michael Noonan] doesn’t seem to realise that the people who are not in “mortgage distress” but are in other sorts of financial distress (as a knock-on from ensuring that the mortgage is the first bill to be paid) are also no longer participating in the economy.
They are no longer buying their lunch or morning coffee, they are cancelling their health insurance and cable television subscriptions. They are getting rid of their second cars, cutting their trips to the pub and no longer paying a babysitter so that they can have a night out at the cinema.
They are scrutinising every pay cheque to make sure they have enough money in the bank to cover the mortgage and crippling creche fees, maybe even putting one or two payments on the credit card.

In a way this is amazing, if the writer is being entirely sincere. But the problem is that in a society where others are doing so much worse and that she is unwilling to expend any time on building some degree of solidarity across sectors and classes that it’s impossible to take this at all seriously.

Again, she sort of kind of sees the contradictions in her stance:

Of course, it’s hard to feel sorry for these people in a world where others are on the breadline. That’s why you won’t hear them on the radio or see them on the streets.
But you don’t have to be on the breadline or in mortgage arrears to be struggling. This group may be silent, but the evidence of their distress can be seen everywhere – in the boarded-up shops they once supported, the empty pubs they once frequented and the cinemas they no longer go to.

There’s an element of truth there, that the lack of disposable income is crushing jobs, gutting the economy. But this isn’t just about the middle class, and that class – however nebulously one can define it (and her own caveat as regards the PS early on in the piece is telling) isn’t alone in feeling the pinch and worse. Indeed it’s precisely because of the lack of interest, and yes – solidarity – expressed that the position of this supposed middle class is being laid bare as being vastly more contingent than its cheerleaders might like. And needless to say there’s no reflection on the thoughts that firstly for many in the working class the things she takes for granted simply aren’t a feature in good or bad times or that in the latter the situation worsens.

Of course this is part of a much larger process, a transfer of wealth that it would appear is quite deliberate, a shift towards making near universal the instability, the poor provision whether social or otherwise, that is a facet of everyday life for many working class people whether employed or unemployed. And yet the immediate response, the instinctive one, at least as exemplified in this piece is to go looking for people to blame. Everyone but themselves.

Which brings to mind Ben Franklin’s point that “We must hang together, gentlemen…else, we shall most assuredly hang separately.”

Social solidarity. Once gone not easy to get back.

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Comments»

1. doctorfive - March 21, 2013

How many times can this article be written?

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WorldbyStorm - March 21, 2013

I was interested because it was so blunt tbh and the SBP has avoided that sort of stuff in recent months. But many times, many many times.

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doctorfive - March 21, 2013

no, not a dig a you. Increasing amount of four year old sindo articles creeping into the SBP.

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WorldbyStorm - March 21, 2013

No worries, I didn’t read it as a dig.

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2. ivorthorne - March 21, 2013

With regards CP1, she would probably point to increments and claim that cuts have been reversed.

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WorldbyStorm - March 21, 2013

That’s an interesting thought, but my sense was that CPI didn’t deal with increments – the wage cuts and pension levy were FF/GP in advance of CPI, and there’s the point that increments were always regarded as part of the wage structure rather than ‘pay increases’ – by all previous administrations. Nor does she factor additional hours introduced not just under CPII but CPI which of course also equal a wage cut over and above monetary cuts but aren’t factored in to her equation.

Furthermore increments, even if one were to view them in the light she does, no more apply systemically to all PS workers (in the sense that all would be eligible for them – those in their positions for long periods of time would more than likely not or have moved beyond even their LSI’s) than paycuts or freezes apply to all private sector workers. Even for those still receiving them they would be at a lower starting point than they were and would not reach the wage they expected to have done had the wage cuts not been implemented.

Finally, she doesn’t seem to know any of the detail. Her point about budget impacts are a good example. How does she think that PS workers evade them? They don’t, is of course the answer. What kind of gets me, which is why this comment is so long, is that this is a piece in a major newspaper that’s just off the cuff stuff. No surprise there, but…

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smiffy - March 21, 2013

Of course she doesn’t know the detail. It’s an idiotic piece, more appropriate to the Sunday Independent. Middle-class people (excluding public sector of course, although given the relentless distortion of the facts about public service pay, you’d be forgiven for thinking that the public sector was made up of nothing but middle-class people) aren’t on Joe Duffy? When was the last time she actually listened to Joe Duffy? Middle-class people aren’t out on the streets? Well, which groups are on the streets? The recent austerity march was open to all, and very many private sector trade unionists were there (although it was predominantly public sector, given the demographics of trade union membership in Ireland).

Everything she attributes to the private sector middle class – negative equity, scrutinising every pay cheque, cutting back on expenditure – applies equally, more so, in fact, to public sector workers. And, worse, in low income households. Getting rid of a second car? Try not being able to afford bread or milk at the end of the week.

It’s just a pointless whine, not making any actual claims or demands (what about focussed state investment that might stimulate the economy to the benefit of the ‘struggling’ middle class that she’s purporting to represent). She’s essentially saying ‘We’re disadvantaged by virtue of the fact that we’re not as disadvantaged as other groups. Who’s going to look after us?’. From the school of thought that brought you ‘Women now have the upper hand over men’ and ‘White people are the most discriminated against race of all’ …

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eamonncork - March 21, 2013

Plus 1 to Smiffy. It’s terrible backlash nonsense The mind boggles at someone who thinks that getting rid of your second car amounts to hardship. Then again anyone who’s lazy enough to use that Finch quote, which was a hackneyed standby of opinion columns twenty years ago, is capable of anything. That Network speech wasn’t even much good to begin with. Expect her next column to include the words, ‘You can’t handle the truth.’

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CMK - March 21, 2013

Not too dissent too much from the point being made about the second car element. But, but, there are, possibly thousands, of cases where getting rid of the second car does amount to hardship. As many will be aware during the building boom huge numbers of estates across the country were thrown up with no regard for how the residents would bet to and from their homes. Two cars were, in many cases a necessity where both partners had to commute by car (65% of commuters go by car). Factor in school runs and commutes and not being able to afford a second car, even a banger, can amount to hardship. And, indeed, many people on low incomes live in these estates and rely/relied on their second car.

There aren’t too many FG/FF/Lab councillors falling over themselves to bring in costly integrated public transport systems that will enable those who currently live in the estates which proliferated outside county towns in the commuter belt to lessen their dependence on their cars.

My view, based on personal observation, is that for some people not having those two cars dramatically limits their ability to function. I’m talking about people I know who drive 3-4 hours a day to their jobs and where their kids go to school a 10 minute drive from their home.

I take the general point about moaning about losing the second car but while this journalist probably means losing one of the 12 BMV 316s or 12/131 Kompressors for many (most?) the second car is the 98 Corolla and the first car a 04 Golf bought in better days but killing them now but they can’t survive without it.

The state remains a geographically large place with abysmal public transport in many instances. Two cars for many in rural Ireland would be standard. Losing one of those cars represents real hardship.

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LeftAtTheCross - March 21, 2013

+1 CMK, agree regarding the necessity of a 2nd family car for rural life, given the absense of public transport, and the absence of planned villages with housing & amenities concentrated within easy walking distance.

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Gewerkschaftler - March 21, 2013

+2 LatC

I can attest to that. And the 6-8k needed to fund private transport in the form of two pollutors represents a massively wasteful way to do transport.

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yourcousin - March 21, 2013

Does “rural life” mean the exburbs? Or actual rural Ireland?. Or to put it another way does rural mean a commuter suburb or does it mean “turn off the paved road and keep going aways”?

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CMK - March 21, 2013

Rural, in this context, means one or two miles outside of a town. You’re surrounded by fields but you to get a pint of milk or a loaf of bread involves a 10 minute round trip by car.

There are probably hundreds of estates – tens of thousands of people – who fall into that category.

Indeed, where I live to avail of public transport to commute to Dublin you need a car! The train and bus station (where private buses depart from as well) are both on one side of the town. Those living on the other side must drive to the bus/train station, or walk 45mins each way. There is NO frequent intra-town bus service that would meet this demand with the paradoxical result that the car parks for those taking public transport are overflowing.

Also, as I said, it’s not unusual here, and I don’t think it would be unusual in the US either, for him to work 40 miles south of the home and her to work 40 miles north where public transport links are poor and where they do exist would involve 5-6 hour commutes. Hence two cars.

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smiffy - March 21, 2013

Actually, that’s a very fair point the two car issue. I wasn’t thinking of rural and other areas where it really would be a necessity – rather than just a convenience – for many families. I would say that I don’t think Martha Kearns was thinking of them either, but won’t try to deflect the blame. My mistake.

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smiffy - March 21, 2013

@eamonncork Also, on the Finch thing, the point that’s invariably missed by columnists etc who quote Network is that it’s a speech given by a man in the middle of a profound psychotic breakdown, picked up by a cynical media to fuel mindless populism. It would be nice if people actually watched the whole film, not just the bit that comes up on the 100 Greatest Clips of all time, or whatever.

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Jonathan - March 21, 2013

I live in the country with my wife and have no kids. The village I live in has no public transport at all (there was a twice daily bus to Dublin, but that’s now been cancelled). My wife and I work at different times in different places, and without the two cars we would be unable to do so. There is simply no other way of getting around in rural Ireland: cycling is far too dangerous on Irish roads, and in any case it’s only an option in good weather and if the distances aren’t too great, while hitching is impractical (try hitching from Gorey to Waterford and be on time for work!), especially at night (and not an option for women). I don’t know any household living around where I do that doesn’t have one car per adult person. Two cars for one individual is a luxury, or two cars when you’re right beside a Luas station and work in Dublin city centre, but not down here in the sticks! And while we’re on the subject: a TV in rural Ireland is not a luxury, it is an absolute necessity!

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eamonncork - March 21, 2013

Point taken on the two cars issue. The one thing I would say is that everyone is making the point that this affects families where both partners are working. But there are plenty of households where nobody has a job at the moment or where only one member has one thanks to the downturn. So those householdsare still in a position of hardship compared to the household where two people are working.

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Ed - March 21, 2013

I wonder how many people who use that quote have actually seen ‘Network’. The character was having a nervous breakdown and threatening to kill himself on-air when he said it, after all. Which isn’t a million miles from the hysterical tone we get in articles like this, but that’s probably not the impression they’re trying to give.

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eamonncork - March 21, 2013

Here it is in all its hysterical over-rated glory.

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3. Michael Taft - March 21, 2013

It would be helpful if Ms. Kearns gave us some idea of how ‘middle’ she thinks ‘middle-income’ earners are – but if she did it would probably give the game away.

The CSO’s Survey of Income and Living Conditions can give us some idea. From 2010 we find that middle income households range from €6,700 to €48,400 – this is income from work, excluding social transfers. These households make up nearly 55 percent of all adults in the state – between the lower 20 percent and the higher 25 percent. They have an average of slightly less than two adults and one child.

Net disposable incomes (add in social transfers and subtract tax), range from €26,100 to €55,000. This is total income for the household.

What could help these households? Half of this group are more reliant on social transfers than income from work. This requires an increase in social protection rates – if only to keep them at pace with inflation.

With so many low-paid, we could look at increasing the minimum wage and strengthening the wage floors under Joint Labour Committees. A large number would be ‘under-employed’ – working part-time but wanting to work more hours. We could put into into law the EU Directive that would allow part-time employees to have first call on full-time work in a firm when it becomes available.

Clearly, this group would greatly benefit from flat-rate pay increases – which the Government could announce as an indicative target. With profits rising since 2010, it is time we get wages rising. However, the Government is pursuing a wage devaluation strategy – cut public sector wages (of whom a large amount) and cut bank pay by 6 to 10 percent, even though 40 percent of bank employees earn €31,000 on average.

This group would also benefit from an expansion of the ‘welfare state': free GP care and prescription medicine; affordable childcare; and free school books / school transport (a given in many other European countries.

The squeezed middle needs employment – in 2010 the suffered up to 12 percent jobless rate. They need state investment and employer of last resort programmes (the latter as a medium-term stop-gap until the labour market resumes growth).

And if she canvassed the common sense idea that mortgages purchased during the property bubble should be automatically written down without putting people on some medieval means-testing rack – more relief could be provided.

So, if Ms. Kearns actually defined her terms she might be looking at things like income redistribution, stronger labour rights, flat-rate pay increases, an expansion of the public sector / welfare state, direct state job creation and automatic write-downs of mortgages. That would be a concrete programme to un-squeeze the middle.

But if she did, would the Sunday Business Post publish such a column?

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WorldbyStorm - March 21, 2013

That’s a great overview of where the real ‘middle’ is.

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4. Jim Monaghan - March 21, 2013

So those with a disposable income of over €55,000. should be targetted for more tax.Sounds good to me

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WorldbyStorm - March 21, 2013

Can’t argue with that Jim :)

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5. Gewerkschaftler - March 21, 2013

Middle class, schmiddle class.

The reason there is so much talk of the ‘squeezed middle’ is that the ruling and owning classes know that the middle class is disappearing and want to be seen to be concerned about it.

There’s nothing more dangerous than educated people who have in the past assumed they were entitled to a slice of the capitalist pie now realising they have no real stake in the continuance of the Status Quo.

Who was it that said the French Revolution was caused by a surfeit of unemployed lawyers?

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Gewerkschaftler - March 21, 2013

Actually I should be more precise – the lower middle class is disappearing. The top 10% who service the 0.1% will continue to be needed.

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WorldbyStorm - March 21, 2013

That’s it precisely Gewerkshaftler. It is a case of the self-defined lower middle class disappearing. And I agree entirely there is nothing more dangerous. That’s a rapid route to right populism.

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6. maddurdu - March 22, 2013

Wish they would cite this part of network instead; http://www.youtube.com/watch?v=NKkRDMil0bw

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7. What of the middle class? What indeed? | misebogland - March 22, 2013

[...] via What of the middle class? What indeed? | The Cedar Lounge Revolution. [...]

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8. More on the middle class… | The Cedar Lounge Revolution - March 28, 2013

[...] a way it’s a perfect complement to the Martha Kearns piece on the ‘middle class’ from last week’, but whereas Kearns at least had the good sense to acknowledge that there are many many who toil or [...]

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