Political leaders all aspire for their nations to become middle class. So called middle class states like in Scandinavia are more stable and happier than their richer counterparts. Scandinavians have a lower per capita income (measured in Purchasing Power Parity) than Brunei, Oman or the United Arab Emirates but are more progressive and satisfied than the latter.
In the U.S. a middle class household is defined as one with an income two-thirds to double the national median which would put it at $49,000-145,000 a year (PHP2.5 – 7.3 million). Many so called middle class families in the Philippines earn less than the minimum wage in the U.S. yet they are both defined as middle class because the term is not an absolute level of income but a relative one, a reflection of wealth equality.
Middle class is not just an economic status, it is also a cultural, social and political classification. Middle class is a frame of mind.
Economically the middle class is characterized by its work ethic and its thrift. The rich spend money, the poor scrounge for it, the middle save it.
Culturally the middle class generally believe in conservatism, stability, and security. They are often Church going with strong adherence to community.
Socially middle class cherish education, family, and the rule of law. Karl Marx termed it the bourgeoisie which over time has been derogatorily associated with mediocrity and uncoolness.
Politically the middle class stand at the center of the political spectrum, a space of compromise, civility, inclusiveness and justice. It believes in progressive taxation, fiscal discipline and monetary moderation. Historically whether it be the French Revolution, the Russian Revolution, Nazism, the fall of communism or our own People Power; social and political upheaval does not happen without the participation, conscious or not, of the middle class. This is ironic since the middle class particularly in developing countries do not have the political numbers to have a voice. It is often termed the Silent Vote until it decides, I guess, not to be so silent.
Pews Research Institute reported that worldwide over 150 million dropped out of the middle class in the last year as a result of COVID. The fall out was most pronounced in the developing economies of India, South Asia and the Sub-Sahara region.
The rise of the middle class in developing countries was the narrative of the last three decades. Economic tigers were what they were called, the economic miracle fueled by growing wealth as countries achieved middle-income status. COVID took the life out of that promise.
The middle class is made up largely up of small businessmen, emerging professional practitioners and middle managers. In a crisis it is the middle class that is most upended. They do not have the numbers of the poor nor the resources of the rich to be a political force.
It is estimated that 25% of the middle class in our country was decimated by COVID. Middle managers often bore the brunt of lay-offs. They are not covered by the economic safety nets of Bayanihan nor unemployment insurance. Small businessmen and professional practitioners have seen their enterprises shuttered, their credit cards squeezed and little access to bank finance. Despite the rhetoric they do not qualify as essential industries. They survive on now depleted savings and support from family and friends.
Many of the middle class are in the mid stages of the credit cycle having borrowed to put their kids in private schools, dined on credit cards, bought homes on mortgages and cars on installment. When COVID crushed their livelihood they were faced with a cascade of monthly payments they are no longer able to service.
People will survive a crisis for as long as there is hope. COVID destroyed that hope for the middle class and that is what hurts. The rich have arrived. Bar exceptional athleticism, good looks or a voice, the poor do not have a path to a future. The middle class do or, to be exact, did. With their education and willingness to work, they could dream of something better for themselves and their children. They could aspire to own a home, educate their kids, dine out and occasionally take a vacation. COVID decimated all that, took away their life as they knew it it but more important dashed their aspirations. We see it in the dropped enrollments in private schools, in the rising defaults in mortgages and credit cards, in falling car sales and rising repossessions; now compounded by health care costs and absence of insurance cover.
Although latent, the middle class is the back bone of society. It does not possess the creativity nor daring of the rich nor the sweat and labor of the poor but it is what holds societies together, the lynch pin that bridges the divide between the entitlement of the wealthy and the despair of the poor. A strong middle class is arguably a necessary if not sufficient condition for harmony and sustainable progress. This is why its current demise is so alarming for the future of our country.
The erosion of our middle class is the erosion of the core of our society. Without the center they represent, our politics will devolve to the extremes, to the unrealistic idealism and scatterdness of the left and the forced march and heavy-handedness of the right. Without the ballast of the center strongmen and charlatans will emerge on both flanks of the political spectrum with high rhetoric and false promises. That means the end of reasonableness, political decency and harmony in our country. That process, some say, has already started.