While the middle class in Europe (statistically) actually sinks into decline, another part of it, smaller but very important, improves its position dramatically. Those two parts get a completely different dynamic so they get different characteristics as well and can no more coexist. Applying simple arithmetic calculations, is figured out that the middle class has reached its limits of expansion. In other words, it has limited the vast reservoir of farmers and workers from where members could be absorbed.
The wave of inflation sweeping the globe mixes with Europe’s long-stagnant wages. Families once enjoyed Europe’s vaunted quality of life are pinching pennies to buy necessities and cutting back on extras like movies and vacations abroad.
Potentially more disturbing, especially to the political and social order, are the millions across the continent that are grappling with the realization that they may have lives worse not better, than their parents.
Inflation-adjusted incomes rose from one percent to two percent in the late 1990s but more than one million German people lost full-time jobs during and after a recession in 2000 and 2001. Subsequently, workweeks got longer without any extra pay and from 2004 through 2007 inflation outpaced income increases for the average family.
In France, the 35-hour workweek kept average annual pay increases below one percent for nearly a decade but French hypermarkets kept prices high.
Spain generated thousands of jobs by pumping up the housing market, but has undergone a joblessness jump since the turmoil in real estate markets while wages have been consumed by inflation. Stagnant pay and soaring prices have hit Italy hardest. Recent statistics from the country’s main shopkeepers’ union showed consumer spending was down 1.1 percent in January from a year earlier, the biggest drop in three years. Leisure and recreation spending fell 5.5 percent.
The social engine caused by the ideological dominance of neoliberalism in recent decades has coupled with the dismantling of institutions of the middle class, such as public education (which still exists in France) and public utilities. Those are the main institutions that more or less created the middle class, and were essential in broadening it and strengthening it; in countries of Europe. A huge number of people in the labour force see their income getting frozen (as in Germany for the last 3 years) or just raising disproportionately in terms of covering the demands of a capitalistic society.
The future (that nobody can predict) as it seems from now, is about what is often described as the ‘economy of the stars’. Many people in the labour force, accepting to work for many hours; getting a mismatched reward, on their try to become managers in the leading productive process where very few can progress far and where ‘winner takes all’.
REFERENCES:
. WWW.GUARDIAN.CO.UK
. THE COMING COLLAPSE OF THE MIDDLE CLASS / ELIZABETH WARREN / UC BERKELEY LECTURE / 2008 (video format)
. ECON.WORLDBANK.COM
. WWW.EUROMONITOR.COM