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Middle Class Muddle


In the wake of the Great Crash, President Obama put Vice President Joe Biden in charge of a multi-agency task force to look at what should be done to help the middle class. One of the few reports from the Middle Class Task Force came from the Department of Commerce, which was asked to try to define the middle class. It reported

Middle class families are defined by their aspirations more than their income. We assume that middle class families aspire to home ownership, a car, college education for their children, health and retirement security and occasional family vacations.

What exactly makes people a class, when the only thing they have in common is aspirations? How can we understand our common interests when all we share is aspirations? And how can there be class unity in troubled times when my aspirations cannot be met if yours are?

This definition is typical of class analysis in America; it says that being middle class all about you, your aspirations, what you want, what you do, what you need. The flip side is that if you are unhappy, or if you fail, it’s your fault, because anyone should be able to succeed by hard work, playing by the rules and buying whatever products and ideas mass marketers are selling.

As a marketing technique, this is wonderful stuff. As a tool for accomplishing your aspirations, it’s a joke, and a bad joke. If you want to learn something about groups, you have to look at characteristics besides their dreams. In this post, we saw how the mirage of middle class life turned out for all those workers who made it into the advertiser version of the Middle Class. Over time, workers quit organizing. And then, starting in the late 70s, workers got crushed by stagnating incomes and a declining share of national income. First it was the massive recessions under Carter and Reagan, and then the recession under George Bush in the 2000s, and then the Great Crash. Today, the median wealth of Americans ranks 27th worldwide, at a miserable $38,800, an absurd number in a land with no financial security. We need to think about ourselves in some other way if we aren’t going to regress even further from our aspirations.

One alternative to the solipsistic definition of the middle class is much older: those people who have only their labor to sell to stay alive. This is an objective description, which may or may not match the actual views of members of the class. That is an important difference. Just because you fit a definition doesn’t mean that you see yourself that way, or that you see others in that objective class as having interests in common as opposed to being rivals for the rewards of work.

For examples, let’s look at medical doctors and software developers. At first blush, one would think these are upper middle class people, with very high incomes and life styles to match. Few doctors and software developers think of themselves as people who have only their labor to sell to stay alive.

My doctor works for a large hospital corporation. Let’s say she’s 35, and if she is average, has something in the range of $140K in student loan debt. After six years of practice she’s making about $200K per year. She probably has a contract like this one.

The corporation sets her working hours, sets the policies for doing her work, and decides on the amount of vacation she gets. It has the right to conduct regular reviews of her work. It can terminate the agreement for disability that lasts more than two months, and for failure to perform her duties satisfactorily to the corporation. In the event of termination, all of the medical records of her patients belong to the corporation, and if the non-compete clause is in the contract she can’t keep her patients if the contract is terminated.

She has no apparent input into the policies of the corporation. If she disagrees with the treatment plans proposed by the corporation, she is stuck. If she thinks a particular protocol is ill-advised, she has no recourse. She is not in full control of her work, and her patients don’t know that.

In sum, she bought an education with her money, her student debt, and her grinding ill-paid work in medical school, internship and residency, and now she is able to practice medicine. She owns nothing but her ability to practice medicine. She acquires nothing by working for the corporation except her paycheck. Exactly how is she different from a fry cook at a fast food joint?

Suppose you are a crack software developer, and a staunch libertarian. You think of yourself as a stand-alone Ayn Rand person, able to go forth into the job market and win. But most likely you’ll wind up signing a contract like this one. You work at will, they can fire you at will, and when they do, they own everything you did related to the job, whether you did it alone or in working with others. ¶ 2.7 So much for being your own person. You are shoved out the door with nothing, and if you aren’t careful, the corporation will sue you for disclosing its trade secrets, meaning the work you did.

This sample contract provides that there is no vacation, no sick leave, and no benefits for the employee. It does say that you get stock options. Of course, if you are fired before they vest, you are screwed; that’s perfectly legal and perfectly likely.

This analysis raises interesting questions. Who has the real power in these relationships, the corporation or the employees? Is that a trick question? Are the real power relationships reflected in the form contracts?

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masaccio

masaccio

I read a lot of books.

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