The working poor

The working poor

From Michael Robert's blog

By michael roberts
There’s a new book just out called Chavs: the demonisation of the working class by Owen Jones (see Amazon, http://www.amazon.co.uk/Chavs-Demonization-Working-Owen-Jones).  I have not read it and will try and review in another post.  But in the book, Jones apparently argues that the working class have been turned into feckless criminals and tasteless layabouts who live on rundown council estates, hardly work and live off benefits.  Chavs is a word used to describe these sort of people.  Jones attacks this media concept often espoused by the so-called chattering classes at their dinner tables, but also accepted by many people who in reality are working class themselves.

Indeed, the political leaders of the ‘left’ like Ed Miliband, the British Labour leader and a broad spectrum of ‘liberals’ in the US have completely dropped the term ‘working class’ from their vocabulary.  For them, above is an elite of top bankers, lawyers, billionaires etc and below, there is the underclass who do not work for a living.  In between, it is not the working class, but ‘the middle class’.  There is  no working class any more.  Moreover, the middle-class is being “squeezed” by a pincer movement of the rich not paying their taxes and the underclass getting all the social benefits, paid for by a middle class that is taxed too much.

But this characterisation of modern society is just as much a myth as describing the working class as all chavs.  So where is the working class?  The Marxist definition remains the best guide.  Marx’s defined classes in society not by their income or wealth, or by their lifestyle or cultural tastes, but by their relation to the means of production in an economy.  Simply put, if you owned a business, you were in the capitalist class; if you had to make a living by selling your labour for a wage or salary, you were in the working class.

Of course, there is some devil in the detail.  Most large capitalist businesses are ‘owned’ by thousands of different shareholders who may not get much in the way of dividends or income from their shares.  And many wage-earners may also get bonuses or shares from the profits of a business.  But when analysed, this does not really alter the Marxist definition.  The majority of shares in most large businesses are held by other large institutions (banks, pension funds, other companies).  These cross shareholdings reduce the power and ownership role of individual shareholders to company annual meetings where they are outvoted.  In reality, we can define those in the capitalist class as anybody who can live off the profits from buying and selling shares in companies or from the dividends or interest they receive.  Those in the working class can be defined as those who cannot do so, even if they have some shares and must depend on their salaries to survive.

So how big is the working class and who are they in a modern society like that of the UK or the US?  If we take from the population of a country those of a working age (say 16-65 years), then we can exclude about 10% as being members of the capitalist class (as owners) or at least so tied to that class that they might as well be (top managers, traders, judges etc).  Then we can exclude those who don’t work for a living.  That’s about 20% who are full time housewives (they are still mainly women) or students.  Of course, many of these live with workers; but they are not workers in the capitalist economy.  Then there are about 10% who are unemployed, perhaps permanently, because they are disabled, sick or part of an underclass.  So that leaves about 60% of those of a working age (labour participation rates in the OECD are about 65%).  This is the working class. Many are highly educated even to a university standard (although not most) and many are highly skilled.  So the working class includes the bulk of what is called the middle class.  Indeed, surveys show that the majority of this working class (even the unskilled or without qualifications) would not define themselves as such in any way.

What are they doing?  Well about 10-15% are in the public sector, doing jobs in the health service, local and central government, education, social services, public corporations and agencies.  The other 45-50% are in the private sector.  In the UK, they will be in the financial sector (banks, insurance companies etc) ; many are in business services (either as doctors, lawyers, accountants or mostly as their back-up staff); a huge number will be in the retail sector.  The large food chains are the biggest private sector employers in the UK and then there are the high street shopping chains, the internet operations etc.  And there are still around 15% in manufacturing.  In the UK, they will be in aerospace, pharmaceuticals, auto and engineering, food processing  plants (not owned by the British) etc.  There are also a sizeable number as media and culture workers (TV, radio, graphic designers, advertising staff, film etc)  And then there are the construction and mining sectors, fishing and farming.  A large and growing sector is in communications (telecoms, mobile phones computer support, call centres etc) and transport (rail, bus, lorry and van drivers).

This is where the working class is.  And they are mostly not middle class, if that term is meant to imply either above average incomes or a university education and culture to go with it.  The average annual income in the UK is about £26,000.  And that means there are more than half of workers who earn less than that because it is a mean average, taking into account top earners (ie over £100,000 a year etc).  Most earn less than the average because they may work  part time and or are in less skilled jobs.

That the majority of the working class is ‘poor’ may be something they would not admit to – but it is a fact. Take the very latest report from the UK’s TUC called Britain’s Livelihood Crisis (see attached pdf) It makes devastating reading.  Many people in middle and low income jobs have barely seen any improvement in their incomes over the past 30 years. While those at the top have become very rich, the disappearance of many middle-paid, skilled occupations and an ongoing squeeze on wages has led to a poorer, more divided Britain . In 2006–08, nearly 3% of the population had zero or negative wealth (defined as all household goods and possessions including cars and owner-occupied houses after deducting financial liabilities), while 10% had less than £7,390. The richest 10% was more than 100 times as wealthy as the poorest 10%! Low income workers have seen their pay rise by 27% in real terms over the past 30 years but rises for the top 10% of earners have been four times higher.

The TUC found that bakers’ wages had actually fallen by 1% in the last 30 years, while they fell 5% for forklift truck drivers and 3% for packers and bottlers in the same period.  Some unskilled and semi-skilled jobs now pay little more in real terms – and in some cases less – than they did in the late 1970s.

Low pay is now the chief cause of poverty, with the proportion of poor children in working households standing at 61%.  There are almost twice as many people now earning a third less than the median compared with 1977.   And many workers on low and middle incomes are in white-collar employment (while their parents were more likely to be skilled or semi-skilled manual workers).   Despite a much more educated workforce, significant numbers have stagnated in income terms. Indeed, despite often being relatively less well paid than the jobs of the past, and being relatively menial in nature, many of today’s ‘middling jobs’ require much higher qualifications than their equivalents a generation ago.

Chavs may be an abusive demonisation of the working class, but equally demeaning is being part of the ‘working poor’.  Take some of the comments on Amazon after reading another book on low pay jobs where the ‘middle class’ author decides to take low-paid work to live as an experience reminiscent George Orwell’s Road to Wigan Pier. 

“The author having furnished her flat then had to find herself a job as soon as possible knowing she had little money in reserve and would have to give up receiving benefit long before she was paid for her first week’s work. This to me highlighted a major problem with the low paid – that gap between stopping benefit and being paid for your work. People doing the jobs at the bottom of the scale will usually not have savings to tide them over such a gap and bills have to be paid.  I felt her comments about spending more than she would earn for a week at the hairdressers or on a meal out served to point up the difference between the middle class and the poor rather than being patronising. The rest of the book contains descriptions of her various low paid jobs – packing cakes, working in a school kitchen, working as a hospital porter, cleaning, care assistant, nursery worker and cold calling by phone. She doesn’t grumble about the jobs just points out how physically hard many of them are. She highlights many issues which seriously need addressing. Things like having to go and collect application forms rather than receiving them through the post, not being able to take contracts – or even copies of contracts – away with her, having to be at a job 15 minutes before the official start, having to go and sit and wait to see if there are any vacancies. Many of the jobs were through an agency which means an employee’s rights are few and their job security non-existent.”

And “The people she met were interesting and she really got over to me the commitment people showed to these low paid jobs. Many took a pride in their work and went the extra mile – often unpaid – to do the best they could. Many were working below their capabilities because it was nearly impossible for them to take the time out to search for another job. The majority of the people she met were women working for low wages – often below the then minimum wage – because the job fitted in with the care of their children and they didn’t dare complain about pay and conditions. Employers consistently undervalue these people and do not reward them as they deserve to be rewarded.”

“Being one of the working poor is to be defeated at every turn. When she gets her dark, damp, unfurnished flat, she has to borrow money from the Housing Authority to furnish it because she won’t get paid until she has been working for at least two weeks. She can’t make an appointment to see the doctor because her job doesn’t allow any paid time off. She can’t try to get a better job because all the employers want to schedule interviews during her work hours (and she can’t afford to take time off) or they want her to devote the day to waiting for an interview. She can’t even make her views as a voter known, because to get to the voting station would mean unpaid time off from work, or an hour on the bus and in line waiting to vote after a 10-hour shift on her feet.  Life is a constant Catch-22 and she finally admits defeat when she has to move out of her apartment because the building’s front door doesn’t lock, there are drug dealers in the lobby, and she can’t afford a phone.”

These people are not chavs, they are not middle class.  They are the working class.