The Fallacy of the Middle-Class: Overcoming Social Resentment (XV). Towards a new paradigm of the Middle-Class.
Happy Thanksgiving Season! By now, many Americans have overpassed their most beautiful celebration under the COVID19 circumstances, my wishes are for you to please be safe, take care of your loved ones, by supporting all the bio-sanitary measures when traveling. Do not expose your treasured elders to this virus. If your family decided to get together, try to keep the social distancing, using masks at all times, and sanitize your spaces frequently. Anyway, the best way to avoid COVID9 new infections is to avoid social gatherings, and I expect you have been wise enough to evade them. Keep your faith, that by next year you will celebrate at double with all your family members alive and in place. Merry Thanksgiving for all of us.
Yesterday we closed our article by stating that there is no Middle-Class without education. This phrase itself is a paradigm. A paradigm is an example that serves as a pattern or model. A paradigm is the conceptual framework that permits the explanation and investigation of phenomena or the objects of study in a field of inquiry. Alors, if our paradigm about the existence of the middle-class is based on education, why is it that education is not rewarded properly economically by those who give a payment of income to the middle-class products and services? Why?
If education is the cause or the reason for the current existence of 12% of families all over the world that hold the “Brand” of Middle-Class (education understood at a formal level-through educational entities; or education that comes from experience, learning from masters who know a lot in a particular field occupation), then why the current economic system has not benefited the Middle-Class to grow more in every country in proportion to the Middle-Class efforts? Why the owners of the resources of this world (that tiny 4% who have the capacity to employ the Middle-Class), have not expanded the Middle-Class to let’s say 40%? Why do entities like the European Union hold a wrong calculation of the middle class? Click this link: https://ec.europa.eu/knowledge4policy/growing-consumerism_en, How could it be that the European Commission believes falsely that by 2030, the Global Middle-Class will expand to 5.3 billion people? For us, this calculation is insanely wrong. How could that be?
Let´s review again the origin of the Middle-Class. And let´s try to understand why are we considering such wrong numbers, when in reality at this moment in time (2020), the Middle-Class is barely 12% of the global population (12% x 7.674 billion = 920.88 million all over the world). Be aware that only 3.492 billion people are the total global labor force economically active.
The term Middle-Class is simply so new. During the medieval times, there were primarily only two social groups clearly established in the feudal economic systems: (1) The nobles (kings, queens dukes, duchesses, knights, military high-end personalities, clergy); and (2) The rest: the lower class, those who worked and labor for their lords and masters, those who were allowed to live or lease the lands of the lords to produce it, but were never able to buy their own piece of land; those who were knowledgeable in occupations required by the nobles, here we could find farmers, maintenance janitors, artists, serfs, servants, the low-class army, engineers, builders, writers, architects, tailors, mechanics, metal workers, etc. The medieval epoch was not triggering any type of Middle-class. Way before the French Revolution and before the first industrial revolution, the economic system was the inheritance of that type of feudalism which was imported from Europe. During the 1500s-1600s, just 500 years ago, the Middle-class started to emerge “economically, but not socially recognized as that”, particularly through the discovery of new territories. When the ships from Europe traveled to America, or to Asia, these ships were sent and financed by the rulers of the kingdoms with the purpose to conquer and expand these new territories. The ocean was the medium to connect the kingdoms of Spain, Britain, Portugal, France, Germany, and the Dutch who were hunting for new land, new species, new resources. And guess what? The whole purpose to gain control of these new lands was trading. Trading treasures and things from Africa, Asia, and Latin America. The new Middle-Class of those times, who emerged as import-export merchants were never free, they were still serfs to the nobles. It wasn´t possible for a Middle-Class emergent person of those times to be considered free, even though they had the economic sources of funds to rise from poverty. If we clearly analyze the commencement of the Middle-Class, these were simply low-class citizens who expanded their economic revenues as logistic managers, traders, and explorers. The emerging Middle-Class of that epoch risked it all (got into debt with the nobles) to travel to the new lands, with the intention to catapult a merchant career or to establish themselves in the newly discovered regions. The new Middle Class of those times were never free socially and culturally, even though they had economic fortunes. For example, the owners of ships who were the logistics managers of the kings/queens dedicated their life to transport products and services to and from the colonies (plantation products, precious stones, gold, silver, species, animals, exotic flora, fabrics, etc). The Middle-Class were also the new financiers or bankers (those who started trading money and originated the financial systems). The Middle Class also emerged as accountants, administrators, and managerial representatives of the kings in the colonies of the newly conquered lands. The concept of serfdom, feudalism, and imperialism was not culturally erased during the Renaissance and the reformation times, on the contrary, slavery was used to ignite and procure the beginning of the global trading economy. But sadly, the Middle-Class of those times was not free. They were economically powerful, but they were still serfs to the king authorities in Europe. Later, the Middle-Class tried to begin their freedom journey with the French Revolution.
Where is the education in the middle of this context?
Let´s refresh ourselves with the following video from Khan Academy.
https://youtu.be/7vL4-Ophj5s
After watching the last audiovisual material, I am sure that you are able to connect the dots between the level of education acquired during those times, and the Middle-Class origin. It is crucial that we understand that even-though the middle-class began to flourish economically (based on income distribution) conceptually it was a minuscule tiny “workforce” at the service of the kings, a middle-class workforce who was specialized in shipping, financing, and trading. It wasn´t until the 19th century (after the French Revolution, the Libertarian movements derogation of the colonies, and the first industrial revolution) that the Middle-Class started to flourish on philosophical, cultural, social, and psychological levels. In reality, the kick-off of the Middle-Class existence based on formal education has been a figure that emerged only during the last 100 years.
If the Middle-Class is so fresh, as a new-sprung kid in our history, it is immediately comprehensive that we are still trying to define us, to understand us, to shape us, to find out how can we stand up and grow as an economic and social group. Nowadays, for those who are poor (84% of the global population according to Eleonora Escalante Strategy) if they wish to become part of this vulnerable little group, the Middle-Class, there is no other option than to study and study well. The paradigm at the moment that we will stick to (it could be modified in the next centuries) is “there is no middle class without education” but we will improve it by the end of this post.
First of all, we have to change the way we define Middle-Class. As it is right now, if we wish to belong to the Middle-Class from the point of view of the income distribution, Eleonora Escalante Strategy has defined that the Middle-Class must earn as a household (family of 4) between US$28,800/year to US$175,200/year. Or in other words, the income per month in a household has to be US$2,400/monthly before income taxes up to US$14,600/month. Or explained in terms of pppd for a four members household, each member of the family must have a figurative income of US$20 pppd (US$80/day per household) up to US$120 pppd (US$480/day per household). This is Eleonora Escalante Strategy’s new definition of the lower-limit Middle-Class range using the same standard terms of the experts, but be aware that for the experts the low bracket is around half (US$11pppd) and this has to be reviewed and modified.
Middle-Class globally has aspirations, wants, and needs.
Aspirations and wants of the Middle-Class:
(1)The most relevant aim of the Middle-Class is to leave poverty behind. And that means multidimensional poverty. The Middle-Class is always looking for a stable and steady source of income that can translate into a life-style that could keep them safe and out of poverty. The Middle-Class doesn´t want to live in dirty-violent-horrible neighborhoods. The Middle-Class doesn´t want to rent a house, they want to own a house. The Middle-Class want to drive their own car (particularly in those cities with a lack of good public transportations systems). The Middle-Class wishes for GOOD EXCELLENT education and accessible health services.
(2) A second aspiration of the middle-class is to be free of debt. The majority of low-income class citizens all over the world started their dream road to become Middle-Class through education that was paid by their parents. But when parents are poor, the kids of them who wanted to emerge as Middle-Class, took the usage of debt as a norm to pay, particularly for education, during the last 30 years. Debt has been used in all forms and flavors: short term debt, revolving credits or credit cards for consumption; medium-term debt for the acquisition of cars and assets not paid in cash; and long term debt for paying the university and the housing mortgage. For example in the United States, 45 million Middle-Class citizens hold a collective total of 1.5 trillion dollars in student debt. Those members of the Middle-Class are in deep financial troubles. Many of them have filed for bankruptcy, and wish to be free of debt. Nevertheless, debt is also an addiction, and any type of addiction needs a rehabilitation educational and disciplined road-map of recovery, to don´t fell down into debt again.
(3) A third aspiration of the Middle-Class is integral top-quality education. Many low-income class individuals have paid for education that is worthless because they did not know it was ineffective. In every country on earth, only 20% of all educational entities are really good, with strict standards, or have excellent well-paid professors that create and build beautiful brains of knowledge in their students. Usually, these entities are not cheap. Or if students don’t have a minimum IQ, they can’t join these schools that are established by meritocracy. The rest of the educational entities (80%) are mediocre, with bad professors, without resources (no labs, no equipment, no libraries, no playing spaces). These mediocre school places are abundant, and students are not educated with the standards required. The digital-virtual model of education will only exacerbate this current situation for the worst because in a map where 80% of the professors are mediocre, don´t expect that virtual-digital education will change this.
(4) The fourth aspiration of the Middle-Class is to find a stable and elysian job or become successful entrepreneurs. In order to produce enough not just to pay the bills (food, car repair, health bills, gasoline, pay rent or a mortgage plan installment, make debt payments on time, etc), but a kind of work that makes them feel valued for themselves and the society. One thing is the employed Middle-Class, and another one is the Middle-Class entrepreneurs. The majority of the members of the Middle-Class who decided to go for the entrepreneurial path, adopted a lifestyle of vulnerability, in consequence, these earners are always trying to wear as many hats as possible. It is pretty normal to observe Middle-Class citizens that have between 2 to 3 work streams of revenues. Sometimes part-time, per hours, WFH overnight, etc. Entrepreneurial Middle-Classes families contribute to robust economic growth that has a positive impact on GDP growth.
(5) The fifth aspiration of the Middle-Class is to keep its purpose commitment: the Middle-Class most higher commitment is to maintain its purpose in life, based on working hard to raise their economic income, getting married, having children & educate them at the best possible academic institutions. The Middle-Class wished to maintain a family strong social group of friends, and end up being respectable social citizens who care for a charity cause (of a specific personal preference).
The needs of the Middle-Class:
These vary according to the lifestyle of the household. I also have explained this in previous publications, so I won´t repeat it here today.
Adjusting the paradigm of the Middle-Class. In my first paragraph, I wrote the paradigm: there is no middle class without education. But this has to be a bit adjusted to the new realities, based on the exploration of the Middle-Class wants aspirations and needs. Eleonora Escalante Strategy has adjusted it to a new one:
There is no Middle-Class without high-quality education and financial wellness.
The Middle-Class’s most urgent strategic innovation paradigm is: how to survive, grow, and build high quality-education skills without debt for the Middle-Class. That is the middle-class current paradigm. How to live a life of a Middle-Class without the utilization of debt or using debt correctly and in little proportions? And I remark this idea, because all members from the Middle-Class, regardless of the country, are now suffering the effects of being in liabilities or deep debt, some with almost bankruptcy status. The dream of living in a comfortable and pretty house, affording a satisfying lifestyle, that allows the family to aspire to a most rewarding future for their children; may happen only when the cause and effect relationship is a reality. If high-quality education provokes a dream job with excellent revenue streams, then those who pay for it have to elevate the economic rewards to at least a minimum of US$80 dollars per household (US$20pppd x four-member family) or US$28,800/year per household and more than that for high-specialized skills in every discipline of study. Without that level of Middle-Income streams, globally, it is unattainable to be part of the middle-class.
NAIQIs are destroying the Middle Class too. With the digital 4th industrial revolution, based on the NAIQIs, many middle-Class earners feel afraid and insecure that in prompt times, their high-skills will also be substituted by automation or artificial intelligence robots or machine learning. Middle-Class existence is at risk when we see that the top companies where the richest of the world are investing, are establishing a new trend of moving to machine learning. With algorithms making decisions and predicting outcomes, the machines will destroy the 12% of the Middle-Class forever, and the group will become poor again. According to a recent report of the OECD (2019), even in OECD countries (European), one in six middle-income jobs face a high risk of automation, or at least during the Pandemic, they have experienced that their presence jobs may be substituted by machine learning technologies. For example: During this pandemic, professors are destroying their own “Middle-Class brand” without knowing. How could it be that professors are now video-producers hanging their expertise on platforms like Patreon or Skillshare… and cashing out in exchange, nothing at all. Many students are now dismissing real-life professors, considering that Facebook Live, Youtube, Instagram, Google Meet-Classroom are the master platforms for their real-live replacement. Each course that they upload, is one course less that will be required from them in person… Virtual-digital education is destroying the status of Middle-Class of Professors, and if this doesn´t stop, it is possible for professors to lose their jobs in the near future because they have already left their classes recorded up in the virtual cloud. Another example, high-Skill artist originals are being replaced by cheap prints; real-live music concerts in stadiums and theaters are now being replaced by algorithms and machines that ignite live geo-blocked events, or robot musicians, etc.
Middle-class families are the main sustainable sources of revenues for the majority of the high-skill jobs and industries, and by going virtual, all the middle-class high-skill professionals who have adopted the virtual classes as a way of living, are basically selling their birthright in exchange for some lentil stew. And this also includes me too. Incroyable!
Middle-class families are the main sustainable sources of revenues for the majority of the high-skill jobs and industries, and by going virtual, all the middle-class high-skill professionals who have adopted the virtual classes as a way of living, are basically selling their birthright in exchange for some lentil stew. And this also includes me too. Incroyable!
Happy Thanksgiving day. Next week we will continue with the 11th topic: The responsibility of the Middle-Class in Democracies.
Sources of reference utilized for this publication:
https://www.worldbank.org/en/topic/poverty/overview
https://www.pewresearch.org/global/2015/07/08/a-global-middle-class-is-more-promise-than-reality/
https://ourworldindata.org/grapher/distribution-of-population-poverty-thresholds?stackMode=relative
https://www.oecd.org/els/soc/OECD-middle-class-2019-main-findings.pdf
Disclaimer: Illustrations in Watercolor are painted by Eleonora Escalante. Other types of illustrations or videos (which are not mine) are used for educational purposes ONLY. Nevertheless, the majority of the pictures, images, or videos shown on this blog are not mine. I do not own any of the lovely photos or images posted unless otherwise stated.
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