Declines and divisions: the missing welfare needs of the majority

Our understanding of western societies is heavily influenced by research on the unequal distribution of wealth and income. Stiglitz (2015), Atkinson (2015), and Piketty (2014) note the dramatic increase in income disparity between ‘the richest 1% and the rest’ and the growing concentration of wealth and income in the upper classes. Stiglitz (2016, p. 169) and Hacker and Pierson (2010) note that the rise in the wealth and income of the 1% directly correlates to the growing financial difficulties of the middle classes and inequality of opportunity and outcome. It is only in the last decades that social inequalities have become central to any understanding of the middle class and of social stratification (Payne, 2013). In the 1990s, when inequality began to rise in many OECD countries, research focused on the increase of poverty or on the consequences of deregulation, rather than on the decline of the middle classes and how to tackle this (OECD, 2011; Kenworthy, 2007; Dallinger, 2013; Giesecke & Groß, 2003). In my paper, I argue that a large part of the research focused on the relation between extreme inequality and the decline of the middle class does not capture the extent of the changes in its living conditions, the level of hardship and the impact on civil coexistence and the functioning of economic and political institutions. Many OECD countries are still ‘middle-class nations’, moreover, the middle class is no longer a locus of social and systemic integration, but instead includes both people who occupy social positions that provide them with material and cultural advantages and people whose income is low and status precarious. The latter group constitutes the vast majority. In many OECD countries, there has been a growth of an extended social stratum formed by the majority of individuals, which is separated not only from the ‘super rich’, but also from the established middle class and the most disadvantaged households. I believe that the condition of this stratum constitutes a significant and critical ‘juncture’ for any welfare strategy aimed at combatting social and economic processes that are increasing the vulnerability of many households and further degrading social life. Furthermore, the relevance of these changes for the organisation of welfare services is not adequately emphasised. Social policy responses to middle class decline have been weak. They appear less and less capable of protecting the middle class from the growing risk of instability, and do little to foster social mobility or improve its social and economic condition.