More on the ‘Middle Class’…



I’d want to echo a point made by Crocodile in comments about on the subject of the Irish Times ‘Middle Class’ report. That is the fact that this was the first public article the editor had added his own imprimatur to by way of an introduction and photograph. No such luck for those struggling on low or no incomes.

It’s also worth reflecting on the tenor of the article – at least as regards some contributions, the sense that as the perks of middle class life – and again that very term ‘middle class’ is so diffuse and so lacking in utility as a descriptor as to be almost without worth, though my sense of it was that it meant in the somewhat better off strata within that self-defined group – are stripped away there’s a remarkable animus directed at those who are perceived as having something, even if in comparison to the fee charging schools and the skiing holidays they have much less. Consider the following from the original article.

“I think of middle class as two incomes, two cars, two holidays a year, where you live,” says Cathal, who is the son of a low-paid civil servant, born in a working-class area and now living in leafy suburbia.

“It’s someone who saved and got their own mortgage, someone who is self-sufficient, who doesn’t get handouts. It means a little bit more than just coping,” says Miriam, who is a preschool teacher.

What’s interesting is that in much of the rest of the article the complaint then is that they’re not coping as well. So are they now ‘just coping’ like those who they say they’re [implicitly] different to?

“They are people who are managing. You could have people who are middle-class who are in trouble now. But I don’t think that drops them out of the middle class . . . I suppose it is a mindset,” says Miriam’s husband, Ronan, who is an estate agent.

No. Because even if they become like these unstated others they’re not really like them because… well, that’s not stated very clearly.

Little of this chimes with the traditional definition of middle-class. Education, as opposed to lifestyle, was always the primary marker, according to the psychologist Maureen Gaffney. The distinguishing factor used to be faith in the future, says Gerard O’Neill of Amárach. That’s why the middle classes valued home ownership, saved for a rainy day, sent the children to college and invested in the future. The liberation of credit in the boom years changed a lot of that.

Astounding stuff. No word from Maureen Gaffney about the way education was a luxury for many facing lives where the immediate need to have an income however small trumped any longer term ambitions.Not a word about embedded privilege, wealth, social networks, or higher salaries from jobs which were kick started by those advantages which allowed ‘home ownership’, ‘savings’, ‘college education’ and ‘investment’. It’s this blindness to the reality that this self-ascribed ‘middle class’ didn’t suddenly spring to life fully formed that is most striking.

By contrast, there’s a salutary reminder of the realities of class structure and of life in a recession – where losing a couple of skiing holidays a year isn’t in the greater scheme of things that much of a sacrifice – offered by a piece in the Irish Times which notes that:

[A] report, followed an international budget standard to establish the cost of a minimum standard of living for Irish families.

And discovered:

Low-income families and those who are unemployed do not have enough money to achieve a basic standard of living, according to a report due to be published today.

The report was: funded by the Department of Social Protection and carried out by the Policy Institute at Trinity College in conjunction with the Vincentian Partnership for Social Justice,

The methodology was interesting too:

Representative focus groups were established made up of different household types across the country. They were asked what they needed for a basic standard of living. A distinction was made between needs and wants.
At the end of the process, 2,000 different items from an electric cooker to bread and milk were found to input into a basic standard of living.

Now, I have to stop right there and point to Dan O’Brien’s piece in the IT this week which complained about the report being funded by the Department in the following terms.

…should taxpayers’ money be given to Ibec to write a huge report on the regulation of business? No, because as sure as night follows day, the report would find that business is being throttled by too much red tape.

And even if that is true, does anyone believe Ibec would be objective on an issue about which it exists to lobby? Again the answer is no. The conclusion, therefore, is that Ibec should not be paid by the State to research its own direct interests.

And he continues:

Just as Ibec is a fine organisation, so too is the Vincentian Partnership for Social Justice (VPSJ), three of whose employees were co-authors of yesterday’s report on incomes needed for a decent standard of living. But just as the Department of Enterprise shouldn’t be subsidising Ibec research, the Department of Social Protection has no business giving VPSJ taxpayers’ money to do its research.

To my mind this is a perfect reflection of how societal values have been skewed.

Ibec has top table representation both overt and covert in the direction of this state. The voices like VPSJ are effectively marginalised in the contemporary period. Their input is peripheral to the generation of social and economic policy in societies where business is put first on a continuing basis and this is before we even consider the resources that VPSJ can marshall as distinct from Ibec.

Even were that not enough to suggest that in this instance their contribution should be given an hearing there’s more. O’Brien continues:

Another eyebrow-raising aspect of the report was the publisher – the Policy Institute in Trinity College. Impartiality and objectivity are hallmarks of academic research. Publishing the views of a lobbyist blurs the line, thereby undermining TCD’s credibility.

It is right in a free society that vested interests and lobby groups have every opportunity to put their case. In a society with such a small marketplace for ideas, the research and opinions of advocates can play a role in stimulating debate. But they should always be taken with a pinch of salt. Yesterday’s report should too.

This seems to me to be a deliberate blurring of the facts on his part. Why should not the PITC publish research in social policy? The fact it was VPSJ that conducted the research is irrelevant – indeed it’s irrelevant if it is a ‘lobby’ group that does research as long as it is methodologically appropriate for the area it engages, in which case it is legitimate to publish it [I could even argue it’s a freedom of speech issue of a sort].

O’Brien et al are entirely happy to quote ESRI research which is also paid from the public purse and which can be regarded as following certain lines in certain instances.

And consulting the PITC and the event to launch the report [which by the way is part and parcel of the PITC’s series of publications in its “Studies in Public Policy” series one will find that far from a bunch of lobbyists with no academic credentials that the research is presented by qualified researchers and is part of a broader range of research in the field.

If it were a case that the VPSJ were operating singly and alone, working outside of accepted methodological approaches in the field then that would be one thing [and let’s be clear, IBEC which releases polling data, whose the validity of which is highly suspect given that they are based on write in responses, has never once been criticised previously by O’Brien, as a perusal of the IT archives will demonstrate]. But it is evident that VPSJ is operating according to best practice and that those in the field of social studies accept that.

So why O’Brien should seek to minimise it is a question only he himself can answer.

But he also finds fault with the very concept at the heart of the report:

Funding issues aside, there is plenty to quibble about in the tome. The four authors begin their 182-page report with a lament: “unfortunately, to date there has been limited commitment in Ireland to establish social consensus as to what constitutes adequate income and resources”.

This is an extraordinary statement in a number of respects. First, people are different in their needs, wants and opinions. There will never be consensus on what constitutes adequate income and resources.

That’s true in the specific, but he conveniently ignores the fact that the state itself, and not just here, makes an effort itself to determine through the use of the Consumer Price Index what the changes for goods and services are. And through the use of both price data and weighting data CPI’s explicitly attempt to determine cost of living indexes which are precisely about as the US Dept. of Labor Statistics puts it: ‘measur[ing] changes over time in the amount that consumers need to spend to reach a certain utility level or standard of living’. In other words far from this being some sort of lese-majesté on the part of the researchers – thumbing their noses at the economic great and good, they’re simply attempting to refine methodologies that are already well-established.

Which makes his follow on point illogical:

Third, the notion of adequacy changes. What was adequate in the past is not likely to be adequate today. There is no acknowledgment of this in the report.

Obviously research conducted in 2011 is going to have some traction in 2012 so it is hard to understand why he thinks this is a compelling critique.

Finally, because societies themselves change over time, so too do the kinds of consensus they arrive at with regard to adequacy (and a thousand other societal questions). That is one reason why democracies hold regular elections. Political parties put forward policies about the amounts of welfare payments and minimum wages – the focus of this report – and people express a preference. Such issues are the meat and potatoes of political contestation and should remain open to debate, not be shut down.

But if that’s correct then he seems implicitly to be suggesting that current CPI methodologies, or indeed research, are irrelevant – policy would be determined in complete vacuum with no reference to research. It’s all ‘preference’. That may be true of his world but out here many of us can determine costs of living and make a stab at what represents a sustainable income in relation to them. The report takes that a step or two further. It is, like all research, open to question but to ignore it or damn it entirely is intellectually pointless.

What’s odd though, and points to the Janus-like approach of the Irish Times, is the fact that the editorial in the edition O’Brien writes in actually lauds the report:

The definition of poverty can change over time, depending on economic circumstances and lifestyle expectations. It is an inability to attain a decent or adequate standard of living. Poverty is not based solely on income but on social participation and an ability to engage constructively with service providers.

Here in Ireland, there is cause for shame because of the skewed nature of society. Difficult political decisions will be required to alter that. This report and the minimum standards of living it sets down suggest a way forward.

Anyhow, all this is very interesting, but what of the report’s findings?

The report found that in a household with two adults and two children with both adults working, the minimum expenditure needed to achieve a basic standard of living was around €540 a week. The figure would be higher if the children were in secondary school.

And it noted that:

This figure was then compared with the income of that household. The report found that those with low incomes or who were unemployed found it impossible to reach the €540 figure and were cutting back on basics to make ends meet.

Put aside all complaints about ‘lobbyists’ and methodologies. The stark fact is that that €540 is not a very high figure if one runs it through to see what the basic wage that is required to give that as after tax income. A rough calculation suggests it is higher than €30,000 per annum gross. Minimum wage is set at €8.65 and if one works a 40 hour week at that the total gross is €346 and an annual gross of €17,992. Clearly that’s a long way short of of €540 [albeit other supports may be applicable].

The maximum rate of Jobseekers Allowance – and in an economy with 14 per cent plus unemployment there’s a clear problem with the first part of that name – is €188, albeit with increases for qualified adults and children [which cumulatively would bring it lower than minimum wage for one]. But again, a long long way short of €540.

The article notes:

“We hope this report will feed into many areas. When and if we’re making further cuts we need to be conscious of the fact there are households struggling already and further cuts will make that struggle even more complicated,” he told RTÉ radio this morning.
“We need to look at how we provide public services to low income households and perhaps assist individuals in low paid work. The report will also have implications for households in debt. The courts are currently trying to work out how much you need to have a basic standard of living. How much you should be left over with.”

This seems to me to paint a picture that is very different from the thrust of the Irish Times ‘report’.
Indeed it points up significant problems with that:

“The sense that the boom was accompanied by sharp inequality across the board is not reflected in the statistics,” says Prof Brian Nolan of the school of applied social science at University College Dublin. “Whereas in the US the rich got richer and the rest stood still, here the whole engine moved ahead.” The most reliable figures stop in 2009, so there is no detailed statistical picture of the human fallout of the past few years. But Nolan is sure about which groups have been least affected by the recession in terms of income, if not wealth.
They include people whose main income, such as a pension, is already from social welfare, he says. Apart from the loss of the Christmas bonus, for example, their core income has not fallen, so the second and third deciles (those immediately above the bottom 10 per cent) have been the “most protected” among the social-welfare groups.

Terrence McDonough of the School of Business and Economics in NUIG makes the following blindingly obvious point in a letter to the IT following up on the article:

I was disappointed to see Prof Brian O’Nolan asserting that inequality didn’t increase during the Celtic Tiger period (Weekend Review, February 4th). This was compounded when Prof O’Nolan’s view was repeated by your economics editor Dan O’Brien. Prof O’Nolan is correct to observe that low incomes in Ireland rose during the Celtic Tiger in contrast to the stagnation of lower incomes in the United States. In fact, over the long period from 1987 to 2007 incomes at all levels roughly doubled. But this does not mean inequality didn’t increase.
A simple numerical example can illustrate. Suppose the top income is €100 a week and the bottom income is €10. All incomes double. The top income is now €200 and the bottom income is €20. Measures of inequality common among economists such as dividing the top income by the bottom income or the more sophisticated gini coefficient show no change in inequality in this circumstance. But the distance between the bottom and the top has doubled from €90 to €180.
In this instance, the popular intuition that inequality rose is correct, and the experts are wrong.


But it’s not so much Nolan’s words which in the context of one – rather basic – metric may be accurate but simply aren’t complex enough to illuminate the situation, but the editorialising which comes after them, as if ‘income’ can be detached from ‘wealth’. The writer of the IT piece may have no sense of what the removal of the Christmas bonus was in the life of someone on welfare, or how what mathematically is ‘only’ a 2 per cent of a reduction in income can be a serious blow to finances where ‘core income’ is so low, but those who experience that are fully aware of what that means.

But what of the editors view of these matters? In that accompanying piece from him with the original article he wrote:

The series looks at the lives of middle-earners and how their fate and that of the State are inextricably linked. It includes personal accounts of the recession’s stark effects, and features some of the tens of thousands of Irish people who face almost impossible levels of negative equity or stubbornly high debt. This economic hardship is compounded by increases in the cost of, most notably, energy, health, education and insurance.

The social impact is no less significant. Individuals and families have been forced into a revision of values and dramatic changes in how they spend money, look after their health, educate their families and use their leisure time.

These accounts from Saturday do not – in the main, amount to the sort of challenges faced by those on low or no incomes. Which isn’t to say that for those who have lost jobs, or who face impossible mortgage repayments those challenges aren’t effectively the same challenges as those on low or no incomes. But for the majority even still losing some disposable income is not equivalent. Indeed seeing some ‘choices’ − as with regards to private education, something most in this state cannot afford, removed from them is not equivalent.

Moreover the Irish Times has not been obvious as a voice arguing against ‘increased costs’ in energy health etc. Quite the opposite. It’s approach across the last decade and more has been increasingly meretricious – no serious critique of the neo-liberalisation of the society, an actual involvement in certain areas, such as property, which massively exacerbated our current problems and so on.

And again, the piece in the Irish TImes on this latest report point to just how tough life is at low/no income level. For those in that bracket there’s nothing like the following from Saturday’s article: “Is there a certain sheepishness about reckless spending in the boom – such as Donal’s friends who went to Bulgaria, couldn’t get a late pint and bought the pub?” or “Your pension, shares, housing values are gone”… er… ‘shares’? or ““All the impulse buying is gone. You wouldn’t even think about the odd weekend away. Sometimes I think a lot of the fun about working is gone, like the little treats you might have found in town”.

But we probably won’t be reading a three page special report on lives where those sort of ‘impulse buys’ don’t figure at all, and never have, in the IT any time soon.

Apologies for the length and odd structure of this post.