The Downward Mobility of the Middle Class

'Yellow Vests and the Downward Mobility of the Middle Class

By Charles Hugh Smith

OfTwoMinds.com

December 18, 2018

Capital garners the gains, and labor’s share continues eroding. That’s the story of the 21st century.

The middle class, virtually by definition, is not prepared for downward mobility. A systemic, semi-permanent decline in the standard of living isn’t part of the implicit social contract that’s been internalized by the middle class virtually everywhere:living standards are only supposed to rise. Any decline is temporary.

Downward mobility is the key context in the gilets jaunes “yellow vest” movement in France. Taxes and prices rise inexorably while wages/pensions stagnate. The only possible outcome of this structural asymmetry is a decline in the standard of living.

This structural decline in the standard of living of the middle class is complex.One of the definitive identifying characteristics of the middle class is that is supposed to be largely immune to the insecurity and precariousness that characterize much of the working class.Why Our Status Quo Fai...Charles Hugh SmithCheck Amazon for Pricing.

In other words, this isn’t supposed to happen to us. This is especially true in nations with longstanding generous social welfare programs: should the unexpected happen and a household’s income declines, the state is supposed to step in and fill the gap with subsidies, unemployment insurance, cash payments, etc. until the household recovers its previous standard of living.

None of that is happening. The erosion of middle class standards of living is not abrupt enough to qualify for social welfare programs; the erosion is gradual, via the higher taxes and living costs the “yellow vests” are highlighting.

State benefits aren’t as generous as they’re cracked up to be. Lower-income pensioners in France are called sans dente, without teeth, as France’s universal healthcare program doesn’t provide much in the way of dental care, hence the poor with missing teeth.

Part of downward mobility is becoming politically invisible, a topic I discussed in France in a Nutshell: “The Government Stopped Listening to the People 20 Years Ago”(December 12, 2018).Money and Work UnchainedCharles Hugh SmithCheck Amazon for Pricing.

The protesters rightly perceive that they are politically invisible: the ruling class, regardless of its ideological flavor, doesn’t believe it needs the support of the politically invisible to rule as it sees fit. The ruling class has counted on the cultural elites to marginalize and suppress the politically invisible by dismissing any working-class dissent as racist, fascist, nationalistic and other words expressly intended to push dissent into the political wilderness.

Many commentators have listed the systemic sources of the erosion in standards of living and financial security: the loss of cheap, plentiful oil to fuel “growth” at rates that lift all boats; the financialization of the economy, which favors capital over labor; globalization, which increases corporate profits via labor, social welfare and pollution arbitrage (move production where these costs are the lowest), and the corruption of the political machinery via pay-to-play (favoring the corporations and super-wealthy) and the concentration of financial and political power in the hands of the few at the expense of the many.

Read the Whole Article

The Best of Charles Hugh Smith

https://www.lewrockwell.com/2018/12/charles-hugh-smith/yellow-vests-and-the-downward-mobility-of-the-middle-class/