That elusive middle class

The middle class does not subscribe to the concept of solidarity and collective action.

The world of work has changed dramatically over the past hundred years, particularly since the Covid pandemic. The next revolution in the workplace will be when AI takes centre stage. But few seem to be noticing that an even greater dramatic change is taking place where, despite our high-technology, knowledge society, half of the working population see themselves as working class.

The world of employment in advanced countries is very diverse. Thus, the manufacturing sector is no longer dominant in Malta, while activities that are administrative or interpersonal in nature have become widespread. Similarly, the picture of the working class has changed: whereas the ‘old working class’ consisted mainly of production workers, the working class of today includes at least service workers as well.

As a matter of fact, service workers are often even worse off than production workers, in terms of income and assets, so this extension of the working class makes perfect sense if one wants to capture the change that has taken place. What they all have in common is rather low income and associated financial worries, as well as difficult working conditions.

The change in the world of work also affects gender relations. While 84% of production workers and 93% of skilled tradespeople are men, the opposite is true in the service sector and in clerical support, where the proportion of women is over 57% and 59% respectively.

Across the differences in income and working life, there is a fundamentally positive view of work. According to a Special Eurobarometer survey in 2022, 92% of the Maltese believe that hard work is important or essential to get ahead in life ̶ that’s higher than in 2017 and the second-highest in the EU after Ireland.

Whether a similar percentage think their salary is good enough is another matter. Probably not, given that the same survey shows that the percentage of Maltese who think that income differences are too high had the second-highest increase in the EU between 2017 and 2022 (+7% compared to -4% in the EU). Also, 87% of them think the Government should take measures to reduce the difference.

A standard Eurobarometer survey in April 2022 revealed that 25% of the Maltese people identify themselves as working class (EU: 23%). Conversely, just 5% identify as upper-middle class (EU: 6%), but none associate with the higher or upper class.

In contrast, 56% identify as middle class (EU: 50%), while 14% see themselves as lower-middle class (EU: 16%), a section that may be equated to the petit-bourgeoisie or self-employed who, while avoiding wage labour, are still not as financially secure as middle-class employees.

These results are more an indication of how respondents identify themselves relatively to others within their national reality, than a reflection of income differences. It could also reflect aspiration rather than actual living standards. This is quite evident if class is determined by looking at the average salary paid to different categories of employees.

In the last quarter of 2023, the average salary of the workforce in Malta (made up of the 10 categories specified by the NSO) was €22,077 per annum while the median was €18,202 per annum. Allocating particular categories to five different income classes, I estimate that the middle class, earning an average of €19,609, accounts for 32% of employees (83,723). On either side of that we have the upper middle class, earning an average of €29,300 and accounting for 22% of employees (58,667), and the lower middle class, earning an average of €15,924 and accounting for 25% of employees (64,866). The average for these three classes would be €21,196, which is close to the average of the whole workforce. The high class earns an average €35,507 and makes 11% of the workforce (29,323), while the working class earns €13,444 on average and accounts for 9% of the workforce (24,456).

Comparing these percentages to those perceived shows that a good number of lower middle-class people are branding themselves working class, while a good number of upper middle class are branding themselves middle class. (Of course, I admit that my own calculations may be somewhat arbitrary.)

This identification issue is seen in other countries too. Sometimes, I wonder if people are thinking about both the collective situation and their own specific one, but not differentiating between them. I just have a hard time believing that someone ̶ and I’m a little bit older than you, maybe a lot older than you ̶ like myself, who grew up with no airconditioning and a much smaller house and a black and white TV and some pretty basic dinners, thinks that somehow they’re worse off now than they were before. I wonder if a lot of people think, “Maybe I’m better off. But overall, we’re not really better off.”

The middle class believe they are the ones who keep the country running. They perceive themselves as average consumers, in the middle of things, even the oil that lubricates the machine. They know they are a social majority but not in the sense that they have a pronounced identity or sense of community ̶ rather as those ‘who really have to work for their money and don’t expect any favours. As a result, the middle class does not subscribe to the concept of solidarity and collective action.

Consciousness of a common class is more frequently associated with the working class, which has a tradition of militancy and, through trade union membership, supports collective action in pursuit of political interests. There is so much that needs to be done, especially to reduce social inequalities -̶ specifically, demands for more financial security, such as an increase in the minimum wage, better security in old age or affordable rents.

This fundamental awareness of the injustice of socio-economic realities however meets a resigned acceptance of existing inequalities among the working class. The feeling is that, despite much arduous work, one has only just enough to avoid falling off the tightrope of life. To them, life seems to be an endless endurance race. The challenge of living on €258 a week is daunting.

So, the current state of play lends itself to the concept of the ‘working middle class’. It actually fits the state of working society in Malta well: on the one hand, a big majority positions itself in the centre of the social hierarchy; on the other hand, work continues to play a crucial role in identity. The term ‘working class’ may seem antiquated and outdated to many, but many still feel bound to it ̶ whether out of tradition, pride, or simply the feeling of commitment to work and life and a striving for advancement.

‘The middle’ and ‘work’ both have positive connotations as places of identity and they also have a connecting thread ̶ that of a profound impact on society and playing an important role. One works to be in the middle. It must therefore be the task of politics to create the necessary framework and conditions to achieve this.

At the extreme top of the income funnel, the privileged work as hard as the working class. It was the Oxford sociologist Jonathan Gershuny who noticed this around the start of the twenty-first century. “Busyness,” Gershuny concluded, was “the badge of honour for the new superordinate working class.”

Rich and unhappy?

The ranks of the super-rich have grown dramatically. In the US, their number increased ninefold. In China, the billionaire count exploded: in a single year, between 2020 and 2021, it grew by 60%. Consultancies now track the movement of high-net-worth individuals across borders ̶ almost 11,000 left China in 2022, some to Malta.
Recently, the Wall Street Journal reported on the minting of a new mega-billionaire, the 88-year-old Texas wildcatter Autry Stephens, who sold his company and its Permian drilling rights for $26 billion. For 45 years, Stephens had driven to his office every day, lately in an old Toyota Land Cruiser. Was he looking forward to enjoying his extraordinary gains? Not really ̶ he would miss the grind. “There is certainly some sadness on my part,” Stephens said.

Why work this hard? The traditional rationale is to provide comforts to those you love. “Familia, id est substantia,” the fifteenth- and sixteenth-century southern-European jurists argued. But no family needs the twenty-sixth billion. As the Texas oil tycoon Haroldson L. Hunt once remarked, “for practical purposes, someone who has $200,000 a year is as well off as I am … it’s the game that matters.”

If that seems counter-intuitive, consider that, according to the NSO, in 2022 17.3% of those who are not at risk of poverty in Malta said that they feel downhearted and depressed sometimes or all of the time ̶ compared to 7.2% of those who are at risk of poverty. Ok, we’re not talking about millionaires in the main here, but the point is that income is not a guarantee for good mental health.

As inequality has risen since 2008, some of these very wealthy people, for example the heiress and philanthropist Abigail Disney and the billionaire/philanthropist Warren Buffett, have argued for greater public giving. They even went as far as writing an open letter to the World Economic Forum convened in Davos in 2022, when they asked governments to tax them more.

The rich are shafting it

In Malta, the very rich don’t talk about their wealth, though many of them flaunt it with their inner circle of friends. They reduce their tax by employing creative accountants to convince the IRD that they’re working day and night just to keep their businesses afloat. In fact, it is unbelievable that there are only 13,582 individuals who pay the top income tax rate of 35%, according to statistics released by the Minister of Finance.

In the whole of the OECD, only nine out of 38 members have lower personal tax rates than 35% and 28 have tax rates in excess of 25% and up to 56%. The Maltese government knows that the rich are shafting it, but merrily goes along because they are creating employment for thousands of people who, failing a tiny bit of this wealth trickling down, would join the ranks of Lazarus.

True progressives, however, see the problem of wealth through the lens of redistribution: what they want of the rich is that they pay their fair share. Taxes “are the proper way (institutionally and culturally) for the rich to contribute to society,” says the Bocconi University economist Guido Alfani. “Not giving, but taxes.”

Photo: Iza Ponchie

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments