How to Save the Middle Class
The Walrus|January/February 2021
Today’s vision of the good life is rooted in twentieth-century ideals. It’s time to reinvent it
MAX FAWCETT

IN 1939, the Westinghouse Electric Corporation commissioned a fifty-five-minute film about the Middletons, a fictional Indiana family who travel to the New York World’s Fair, where they are dazzled by the company’s futuristic vision of “a new Tomorrow.” It’s a consumer paradise that includes everything from television to a photoelectric bike called the Phantocycle to a towering voice-controlled robot named Elektro. The movie’s highlight is a staged dishwashing competition between “Mrs. Modern,” who is armed with a new Westinghouse dishwasher, and “Mrs. Drudge,” who works furiously at a sink. To no one’s surprise, the gleaming labor-saving device wins.

The contest was more than smart product placement. It presaged the postwar financial boom that ushered in the dramatic expansion of the middle class. Indeed, the ideals of prosperity and success that shape much of how we still understand the middle class can be traced largely to this period often referred to as the golden age of capitalism. From 1950 to the early 1970s, governments across the Western world managed to both build their economies and strengthen the social safety nets that underpinned those economies. Incomes rose, households grew wealthier, and values like thrift and sacrifice, which had guided previous generations, were replaced with indulgence as consumers coveted the ever-widening array of household items and goods that flooded the market. According to Frederick Elkin’s 1971 book, The Family in Canada, Procter and Gamble reported in 1957 that more than half of its sales volume came from products that hadn’t existed at the end of the Second World War. By 1963, 94 percent of Canadian households sported refrigerators, 87 percent used electric washing machines, and 90 percent gathered in front of television sets that hawked drinks, instant rice, and toys. The Middletons had become a reality.

If you showed someone from the late 1950s the typical Middleton life today, they would probably think society had made extraordinary economic advances. How else could someone middle class afford a beautiful car, an enormous new house (relative to what was normal, say, seventy years ago), and access to the kind of food and wine once the exclusive preserve of royalty and the very rich? But they would miss what lies under the surface of that abundance: ever-churning anxiety. It seems almost unthinkable today, but for a time, the middle-class dream was attainable with just one good income (as well as the support of unpaid homemakers, something the pandemic has brought back into the discussion). While the average middle-class family in 2020 may have more in the way of consumer opportunities, the cost goes well beyond the sticker price on any given item. To afford it, people have to work longer and harder than they did before. They’re more alienated from their communities, more distant from their families, and more nervous about their futures — which are increasingly paid for by money they’ve borrowed.

By the beginning of 2020, the average Canadian household owed $1.77 for every dollar of after-tax income, a combined total of more than $2.3 trillion. That number is largely a by-product of paying down mortgages, but it’s also a reflection of our new national pastime: living beyond our means. With the majority of middle-income households seeing little change in their annual incomes between 1981 and 2011, families have needed to go deeper into hock to enjoy the trappings of existence their parents and grandparents were able to afford without overextending themselves. Even before covid-19 crashed the economy, Canadian households were dedicating nearly 15 percent of their spending to servicing debt, a level not seen even in the United States at the peak of its 2007 housing bubble. If interest rates rise, or if runaway housing markets correct themselves, overleveraged families will be in deep trouble. According to a recent Ipsos poll conducted for insolvency firm MNP, almost a third of Canadians can’t pay their bills without sinking deeper into debt, with another 21 percent admitting they are $200 or less away from insolvency at month’s end.

The question is whether the middle class, at least in how we’ve come to understand it, will go extinct. If wages stay stagnant, many Canadians will have no choice but to postpone or cancel investments in their homes, in their children’s education funds, and in their retirement plans. Meanwhile, the pace of technological change will keep upending entire industries, reminding everyone that steady career paths are a thing of the past, along with the healthy pensions they used to produce. “For the better part of the postwar era,” writes former CIBC economist JeffRubin in The Expendables, his recent book about globalization’s effect on Canada’s declining living standards, “membership in the middle class was for life. Today, staying in a club is a lot harder.” Indeed, the Organization for Economic Co-operation and Development (OECD) made a key finding in a 2019 report: just under 70 percent of baby boomers were middle class in their twenties and thirties, but only about 60 percent of millennials achieved the same status. Generation Z is almost certain to have even fewer people meet the standard.

Yet, despite the considerable hurdles —  housing costs, stagnant incomes, massive debt loads — the standard still beckons. No wonder: unlike the concept of the upper or lower class, the connotations associated with the middle class are almost entirely positive. In our ever more polarized society, it remains a shared identity both aspirational and uncontroversial. Members of the middle class are celebrated as hard-working citizens who want what’s best for kin and community and are therefore engines of both progress and stability. “Societies with a strong middle class,” writes OECD chief of staff Gabriela Ramos in her foreword to the report, “have lower crime rates, they enjoy higher levels of trust and life satisfaction.” The middle class, in a sense, is the immune system of modern democratic societies: weakening it weakens us all.

That may explain why the federal government thought it a good idea to appoint a minister of middle-class prosperity in 2019. In her mandate letter, Mona Fortier was asked to lead efforts to “ better incorporate quality of life measurements into government decision-making and budgeting.” But, with the pandemic now throwing both that decision making and budgeting into complete disarray, the future of the middle class — and the over 1 million debt-laden Canadians who have suddenly lost their income — is looking more precarious than ever.

While politicians will be busy tripping over one another in the months to come, frantic to restore the glory of everyone’s favorite socioeconomic demographic, the current moment gives us a rare opportunity to reassess what it is we should be trying to restore and how we ought to do it. The preferred option has often seemed like a return to the past — making the middle class great again, as it were. The solutions commonly discussed involve either generating more income (by signing new trade deals or cutting taxes) or redistributing the income we already have (by raising taxes on the rich and investing in new programs, like child care).

But maybe a more lasting solution lies in strategic retreat: embracing the fact that this past can’t be recreated and that we may not want to even if it could. Consumerism helped build the vision of middle-class prosperity that prevailed in the latter half of the twentieth century, but it also heaped the middle class with household debt, which got it into serious trouble. Most importantly, while consumption is a big part of the picture, the middle class is being routed by forces much bigger than the average household.

What we need is an idea of the middle class that aligns with the technological, social, and financial realities of our time. This means understanding that we don’t all have to live in major cities or near our workplaces anymore: as the pandemic has shown, technology can make it possible to move from places that are overpriced or overcrowded. It means understanding that atomized households can lead to fragile family structures and that we may need to extend our sense of community by welcoming different generations into the same spaces, which will not only stretch our money further but also leave us more connected. And it means understanding that current generations will likely live longer than any in history and should plan accordingly. It also means confronting the fragmented nature of the gig economy and the rise of precarious employment.

These are problems that require policies that take us in fresh, unprecedented directions. Instead of trying to help more people get into the old version of the middle class, a version underwritten by social and economic conditions no longer replicable or desirable, we should focus our collective energy on building an entirely new one. It’s high time we gave the Middletons a makeover.

First, we need to understand who we’re making over. The OECD defines the middle class as those earning between 75 and 200 percent of the median income, which, for a family of four in Canada, puts the range between approximately $65,242 and $173,980. But defining the middle class by income quickly runs into trouble because there’s no consensus on where to draw the line. The Pew Research Center says it’s between 67 and 200 percent. Some economists prefer 50 to 150 percent, others 75 to 125 percent.

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