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What does it mean to be middle class?

Publication Date : 11-03-2013

 

The people of Hong Kong had a good laugh two weeks ago when Financial Secretary John Tsang asserted that he understands well the worries of the middle class - being a member of it himself. The next day, Tsang, who earns HK$302,205 (US$38,957) a month and lives rent-free in a government house at the Peak, generated more derisive mirth as he sought to clarify his statement. What defines the middle class is not so much one's income but lifestyle, he said.

"I have read articles that say the middle class are people who drink coffee and like French movies. I like movies and tea, so there's not much difference (in my life) with the lives of the middle class."

Tsang has a tin ear. Beneath the sniggers was a bitterness over how middle class status - and its entitlements - seems to be slipping many Hong Kongers by.

The more astute Chief Secretary Carrie Lam, who earns HK$312,785 a month, later declined to say if she was middle class. And when asked by the local media if she drank coffee at home, she simply shook her head.

Tsang's stab at empathy was facile - coffee-drinking and movie-watching a middle class Hong Konger makes? But it is not outright erroneous.

The definition of the middle class is a woolly and relative one.

Historically, there have been a couple of ways to slice the cake.

The earliest middle class folk were the capitalists in Europe during the late Middle Ages, when people began amassing wealth as a form of power to rival the landed - and sometimes bankrupt - nobility. They ranged from shopkeepers to fat cat bankers, but no matter how rich they became, they stayed "middle- class" - until after the Industrial Revolution.

In more modern times, rich capitalists became the upper crust, while the middle class referred to salaried managers and professionals that oversaw the labour class.

Wrote sociologist T.B. Bottomore in 1974: "The elite is intimately connected with society through a sub-elite... the whole 'new middle class' of civil servants, managers and white-collar workers, scientists and engineers, scholars and intellectuals."

That would technically include Mr Tsang - a top civil servant, but a civil servant nevertheless.

Today, in most meritocratic societies including the United States and Singapore, the concept of the middle class is largely economically driven. In fact, the term "middle income" is often used in lieu of "middle class" to denote the mid-section of society that earns around the median wage.

The Economist magazine, in a report in 2009, characterised the middle class as having a reasonable amount of discretionary income. Diana Farrell of the McKinsey Centre for Government defined it as beginning at the point where people - after paying for basic food and shelter - have a third of income left for consumer goods, health care and education.

In Singapore, there is no official definition, although two National University of Singapore academics, who published a study on the subject last November, defined the middle class as those whose household income falls between S$2,001 and S$5,000 - 40 per cent of the citizen population.

But other criteria - including yes, lifestyle - hold sway as well. In Hong Kong, they include, besides income, accumulated wealth (such as assets like property), social status and lifestyle, says Professor Francis Liu, head of economics at Hong Kong University of Science and Technology.

Going by these measures, it is little wonder the large swathe of Hong Kongers who consider themselves middle class and entitled to all that that means, are up in arms over Tsang's comment.

Take income. From 2001 to 2011, the median monthly wage of workers in the bottom 20 per cent of income earners increased 16 per cent, thanks to policies such as minimum wage; those in the top 20 per cent saw theirs shoot up 30 per cent. By contrast, the sandwiched group saw the lowest growth - by 9 per cent to HK$12,000 in 2011. When taking into account inflation, it was actually a 3 per cent drop.

Second, accumulated wealth. Property prices have almost doubled in the past three years, putting a long-cherished asset - both as a place to live in and also as a way to get rich - out of reach for many. Currently, the home ownership rate in Hong Kong hovers at just 52 per cent.

Three, social status - linked mainly to occupational prestige.

A mix of factors have reduced job opportunities for those in the middle. One is the economy's shift from manufacturing - the number hired in manufacturing dropped 57.4 per cent in the past 10 years - towards a services base, dominated by a few industries like finance and property. Another is the education policy, starting from 2000, encouraging those who do not qualify for university to study for associate degrees.

This has exacerbated a mismatch of expectations, skills and jobs, says Prof Lui. A wide band of young aspirants, geared towards office jobs, end up as clerks or property agents. The situation could worsen amid an environment of anti-mainland sentiment.

With the economy today latched to the mainland, one key way of moving up the ladder is to tap the burgeoning Chinese market - from finding ways to supply milk powder to mainland mothers, to seeking business opportunities in the rising Pearl River Delta.

But few want to. A recent survey of post-1990s youth found that 60 per cent are unwilling to work or study on the mainland. Says Hong Kong University sociologist Hayes Tang: "They are less pragmatic. Emotionally they are less attached to - even against - the Chinese identity. Some want the British National Overseas passport which can enhance their cultural status, but is less useful than the Hong Kong Chinese passport for travelling without visa."

In that sense, he adds, the local identity may pose a "structural obstacle" for the younger generations in becoming socially mobile.

So that leaves lifestyle.

That, by contrast, is relatively easy to attain. HK$100 buys one a middle class night at the movies with a Starbucks latte in hand.

 

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