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Is the middle class in developed countries an endangered species?

Globalisation has shifted much of manufacturing to developing countries. This impacts mid level managers as much as factory workers.
Technology is increasingly making the provision of professional services such as legal advice, engineering and design possible remotely.
Farming is increasingly being done on a corporate level.

Australia is largely a mine feeding Chinas development and a declining retail/service industry.

The US has silicon valley and the entertainment industry but these also have challenges.

What is left between Capital and waiting tables?

Is a good college education still a ticket out of lower socio economic conditions?

Is this connected to the 99% issue?

What can we do about this as individuals, communities, or at a policy level?

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  • Apr 7 2012: This is a very complicated matter, it involves so many variables and moving parts. Yet something must be done. This year I have visited several parts of the world. The 2000 to 2008 period, where the global economy nearly doubled was an anomaly, and while we here of the peoples of the world progressing and they have, from previous eras of travel, there remains much to be done. Much of what is projected in the media, particularly as relates to Economics is written, repeated and repeated again by communication specialists or journalists or entertainers and not by economists. The dialogues are superficial and oft counter-productive. I believe that many of the trends that have occurred will alter, however at present there is great turmoil in all spheres of the global economy. Commodity Groups happy in many places, manufacturers crying (your county, Brazil, and elsewhere). The mantra on low-cost wages driving manufacturing to China isn't true, the financial repression mechanism, loans, rebates, import and export subsidies, etc of more value in the value of final products than labor. Recent mantras, costs rising and looking further afield, well there are a plethora of development partners globally who hope to produce. Investment in Africa, great, but with population increased by 60% in the last 20 or 25 years, and likely doubling in the next 30, Africa will need do more than export raw materials to Asia. Couple this to conditions in the developed world, where the middle classes have seen, believe their positions have eroded, and a global consensus will coalesce for alterations or a severe and eventual backlash to threaten an inclusive global system where a plethora of development partners exist widely along the line of previous experience. This will be realized. The great hope of a growing global middle class is juxtaposed against the very real opposite position; great and growing despair of a burgeoning global population confronted with resource shortages.
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      Apr 10 2012: Thanks very much Craig. You highlight a lot of issues, across the globe.
      I wonder if there will be a sudden tipping point or whether it will be gradual and we will boil like a frog as the temperature slowly increases.
  • Apr 7 2012: Personally, and despite current dialogues I am rather less concerned existentially about this. I believe there has been a pendulum swing, and despite the hopeless, snickering smiles found on the financial channels about the undeniable this or that, i, as one currently living elsewhere, who has live rather broadly across the world, and spent more time seeing other places, suspect that the current period is an extension of the entire post-soviet experience where the world is still finding their feet. It is not the failure of man that has led to the present point but man's success. I suspect this issue to be one of ideology, and certain ideologies, despite some confusion, having less currency as we move toward the future. In the post-soviet experience, many more people have entered the ball room, everyone wants to dance with the pretty girls and handsome boys, and the fact is everyone will have to have an opportunity to dance. Some in the international system are testing their environment, but few fail to see that the success of the system, with some natural detriments due to ideology going further than reality, need be addressed to optimize interactions in an ever more people and information plentiful world, as all have expectations that increase due to exposure to information and knowledge. Despite the lack of hope fomented by popular media and financial edutainment, I would rather caution that things are not hopeless and there will be movements of necessity as the world is replete with development partners.
    But like heather below, resilient communities, resiliency in your own vocational paths, a commitment to lifelong learning, flexibility, individual adaptability and social adaptability. The one thing that is clear to me is that SERVICES, rather than PRODUCTION of manufactured goods, need quickly rise in importance and globally in composition of domestic and global GDP in most societies. Remember, Equality is a necessary assumption but Liberty is essential
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      Apr 7 2012: Thanks very much Craig. I hope you are right that the situation will not be as dire as I fear.
      I'm not sure if services will fill domestically to fill the void left by manufacturing moving offshore.
      Particularly given some services such as banking, support can move offshore with the help of technology.
      However, face to face will continue to have a place. Tourism for example.
      Hopefully we will find a new equilibrium that does not result in a significant step back for the workers in developed countries.
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    Apr 5 2012: The large middle class in developed countries was always an illusion. If you work for a pay cheque, you’re working class - and dispensable. It makes no difference if you work in a mine or as an account manager from an office.

    To escape the trap and free yourself change your perspective. Assess your needs - be ruthless. What do you really need? Could you live in a smaller home or in a less expensive area? Do you need your own car? Down shift your consumer lifestyle so you can live well on less. It’s quality of life now that’s important - don’t wait until you retire! If possible, get into a position where the annual income you need can be earned through part time work or seasonal contracts. As a community, share your skills - grow your own veg, keep community chickens / honeybees. Get a dog and go for a walk.

    Henry David Thoreau, the 19th century American philosopher and social commentator wrote about his life experiment at Walden Pond where he was financially far from wealthy, but he was time rich. He was so self-sufficient he only needed to work for a few weeks a year.

    Being time rich has always been a characteristic of the upper classes!

    So, in less than 2000 characters, you’ve moved from the boring middle class who defers pleasure until retirement to the savvy working class and on to the idle upper class.

    Also read "How to be Free" by Tom Hoskinson - very inspiring!

    Good luck - I know it’s worrying.
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      Apr 7 2012: Thank you Heather. You make some very powerful observations and suggestions.

      I totally agree that most of us have to work to keep going. We don't inherit enough or make enough from work early on to be able to live off the returns from our wealth. Blue Collar or white collar we are all working class - I agree

      I generally avoid class terms. But they sometimes get a message across succinctly. I guess I was referring to being able to earn enough to pay off your home well before you retire. To have money to enjoy the work life balance, to travel, to not be a pay cheque away from being on the street. To have enough money to send your kids to a good college, to learn an instrument, to have hobbies and some nice family holidays. To set your own kids up so they have the opportunity to do well.

      There is or used to be a pathway that you could get a good education, work hard and escape the minimum wage drudgery. You could have a profession, a career. You could earn a fairly decent salary. Yes this is still selling your life time in the labour market, but there were many decent jobs. My concern is this is diminishing

      My company has had many redundancies, moved production overseas, I see ex employees working for the minimum wage at Bunnings (think Walmart for hardware).

      I agree that the expenditure side is just as important. It is good to avoid being slaves to consumption, brands, the latest electrical gadget etc. A big part of happiness is health, social connection etc. Health is hard on the minimum wage but social connection, quality time with friends and family is priceless. There is also something about us that is competitive and hierarchical. We don't like to feel inferior.

      Even if we all earnt 50k more than we do now there would be a hierarchy still, but there would be less poverty.

      We don't want to head the other way.

      Globalisation concentrates wealth in the top end of the developed countries while raising the living standards on the developing countries.