The Crisis of the Middle Class
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Date: Thu May  1 12:06:14 CEST 2008
From: Jesus Ortega
To: Leslie Froysa
Subject: Christians persecuted in Morocco

On Thu, 2008-05-01 at 10:14 +0200, Leslie Froysa Ortega wrote:

OK, the author is talking about a mixture of things in the article.
First of all, we have the high level of inflation that has come back for
the first time since the 1970s to most developed economies.  Economists
are still debating the source of the problem.  Is it due to the
increased purchasing powers of the middle classes in emerging countries
such as China or India?  The high price of oil could be explained in
this manner, especially when combined with the fact that the total
amount of world reserves has been decreasing (as it had to be, since
it's a limited resource).  Or, on the contrary, is it mainly a
consequence of the climatic changes that are making it more difficult to
produce more food?  In spite of the tendency to blame it all on the
greenhouse effect these days, I think the former explanation sounds more
reasonable.  We'd have an interesting paradox here, but one that was
also unavoidable: as the masses of the poorer countries improve their
living standards, it has a direct effect on us.  

Second, and directly related with what I pointed out above, we have also
witnessed in the last decade or so a clear increase in the mobility of
population.  Due to our technological progress, it is much easier to
travel anywhere in the world... and also to settle anywhere in the
world.  We still have some ways to go, but there is no doubt in my mind
that we are quickly approaching a true global society, completely
interconnected, where English will be the official language, trade
barriers will be almost non-existent in most countries, cultural
exchange (i.e., movies, books, theater plays, sports, etc.) will also be
global in nature and, perhaps, labor will also be far more mobile that
it currently is.  The direct consequence of this is that the appearance
of a large amount of immigrants in most countries pushes down the
average salary due to the increasing competition for the jobs.  It's a
simple supply and demand issue that shouldn't be so difficult to
understand.  It's also a trend that has a direct impact on two
particular segments of the labor market: unskilled jobs (i.e., the old
working class) and jobs that require a low level of specialization and
education (i.e., plumbers, electricians, sales people, etc.).  Needless
to say, these two segments are precisely the ones that gained the most
between the 1950s and the 1970s, the ones that built what we consider
our contemporary "middle classes" (remember how many times I explained
to you that, especially in the US, there is a tendency to confuse
"middle class" with "families with an income that allows for a
comfortable life"?).  

Now, what are the possible solutions to this conundrum that we are in?
Other than letting things follow their course (this is the view of
conservatives in the US and liberals here in Europe: let the free market
decide), I can only think of the following: 1) finally assume the global
nature of things in today's world; 2) realize that whatever decisions
need to be made can only be made at the supra-national level, which also
entails increasing the importance of world treaties and organisms that
can supersede the decisions taken at the national level; 3) return to a
more progressive fiscal policy that cuts taxes for the lower salaries
and increases it for the higher ones in order to put an end to the
obscene concentration of capital in the hands of the few that we have
seen in the last two decades; 4) put more emphasis on the importance of
education and technology in order to increase the amount of people who
don't depend on unskilled jobs; 5) open up the "mental borders" in order
to spread a true "global mindset", which requires fighting the always
present nationalistic temptation; and 6) contribute towards the
development of other regions of the world with the idea of increasing
their consumption of all sorts of products (including our own),
decreasing the need of their masses to migrate in order to find a decent
life somewhere else and minimizing the chances that the crisis of a
single national economy might trigger a world crisis.   

Jesus Ortega