Posted by: nickgerlich | October 22, 2007

Stuck In The Middle With You

It’s amazing how much emphasis is put on social and economic class in developed countries. It’s not enough that, for the most part, we have our basic food and shelter needs met. No, we still have this innate human desire to rank order ourselves, creating both a ladder to climb and envy to deal with as we try to improve our position in life.

The Middle ClassSuch is the lot of the Middle Class. And Middle Class is much more than just a pioneering hardcore band from the late-1970s. It is a way of life for the majority of Americans.

Funny thing, though, “middle class” is a very relative term. In China, “middle class” means something far different from what it means in the US, or even India (where there are a reported 250 million in this group). In the the US, I would say that being middle class means you’re certainly not poor, but then again, you never really feel like you’re getting ahead.

In other words, stuck.

Being in the middle has huge implications for the economy, and our consumption in particular. The rich will continue to act as if nothing ever happens, while the poor will always be among us (Jesus said so). Right now the middle class faces problems with keeping up their house payments (variable interest rates were’t such a good idea, were they?), along with maintaining a couple of vehicles, a house full of furniture and electronics, and all the other appurtenances of living the American dream.

But as economists know all to well, actually defining “middle class” is a bit daunting. Exactly what income range defines this is debatable. Furthermore, an income that may provide for a comfortable lifestyle in one region may be barely scraping by in another. One person’s $100K income may be extravagant or meager depending on where you are.

But there seems to be consensus among many lately, though, that times are a little tougher now than they were even just a year ago. In a move that is part competitive, part responsive, Wal-Mart has lowered prices on many toys and other items in an attempt to stimulate its sales. It probably couldn’t come at a better time, with oil rapidly approaching $100 per barrel. A tank of gas could put the brakes on dining out and many other consumer expenditures.

I suppose more than anything, middle class is really more a state of mind than it is the state of your pocketbook. Of course, the two are intertwined to some degree, and it’s definitely a lot easier for someone of upper-middle economic means to live the middle class life. But more than anything, being middle class means simply living a rather typical American existence.

And while that existence is arguably better off than what middle classers in China or India are able to attain, it is still that big land in the middle where people are too rich to be poor, but not rich enough to no longer care about paying the bills.

I suppose the only problem is that someone greased the rungs on that ladder, because I’m having problems keeping my footing.

Dr “Going Up?” Gerlich

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