Reviving the middle classes: A force for good worth rejuvenating

It says a lot that at his first rally of America’s 2020 presidential election campaign, Joe Biden promised to rebuild the middle class. 

“Let me say this simply and clearly, and I mean this: The country wasn’t built by Wall Street bankers, CEOs, and hedge fund managers. It was built by you. It was built by the great American middle class.”

Warming to his theme, Barack Obama’s vice-president, who is already 76, said America needed to “redefine what constitutes a successful economy”. 

Speaking in terms that resonate loudly on this side of the Atlantic, he continued: “The stock market is roaring, but you don’t feel it. The two trillion dollar tax cut last year, did you feel it? Of course not. All of it went to the top.” 

He pointed to another great social injustice, as alive here as it is in the US, when he said the number of corporations that paid no taxes had doubled since tax cuts introduced by the Trump administration. 

Whether this rhetoric recaptures the constituency Hilary Clinton’s 2016 campaign ignored — despite the prescient warnings of Bill Clinton — remains to be seen. 

What might be delivered in the unlikely event of a Biden presidency is even fuzzier.

What is certain, though, is that he hit a raw nerve, even if the Organisation for Economic Co-operation and Development recorded that Ireland’s middle class is growing.

Ireland is one of the very few OECD countries where this is the case. 

Between the mid-1980s and mid-2010s, there was a drop of three percentage points in nine of the 17 countries that supplied data. 

There was a sharp fall in Sweden and Finland, while Germany, Luxembourg, and America also have a shrinking middle class. 

Ireland bucks that trend: in 2017, the Pew Institute found that of 11 western European countries, we enjoyed the most vigorous middle-class expansion between 1991 and 2010. 

Despite that, the report recognises that the middle class is undermined by stagnant wages, runaway housing costs, and job insecurity. 

The OECD argues that middle-class households need more government support. 

One issue, housing, confirms this. House prices have grown far faster than any middle incomes. 

This feeds the equation, making it more difficult to achieve or sustain a middle-class lifestyle. 

Taxation, despite protests to the contrary, has a disproportionate impact on middle-class incomes. About one in five pay tax at the higher rate, but they pay more than three-quarters of all income tax. 

Those on the standard rate account for 43% of taxpayers, but pay only 25% of tax.

Those are the economic markers, but the idea of a middle class is about much more than achieving a certain income. 

Like every class, the middle class has it strengths and weaknesses, even if it requires sloppy generalisations to define them. 

History shows, though, that a secure middle class enhances civilisation, drives change, and, again a generalisation, cherishes education and achievement in a way that more often that not enhances society.

Joe Biden is right: being middle class is about far more than having a comfortable lifestyle. 

It is as much a political definition as an economic one — one that might sustain the idea of European liberal democracy.

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