United States:
A Middle Class Nation, or Is It?

Feb 8, 1996

An important part of the dominant ideology of the United States is that it is a middle class nation. Clinton ran for the presidency in defense of the middle class. Every party from Perot’s various groupings to the Democrats to the Republicans claim to do something for the middle class. In the schools, the U.S. is presented as the model of a middle class nation, the example, par excellence, which disproves what Marx had to say in the "Communist Manifesto":

"Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other - bourgeoisie and proletariat." Of course, those who claim that the U.S. today is a middle class nation themselves have various ways of defining it. Many simply use income as a measuring rod to separate the middle class from a lower class below it and an upper class above. Of course in this way any society that isn’t perfectly equal can be made to have a middle class, and this class can be made arbitrarily bigger or smaller depending on where someone decides to place the income cutoffs. This method is beloved by politicians who define a middle class tax break as going up to $100,000 a year or even $200,000 a year of family income.

Bourgeois ideologists also support the idea that this is a middle class nation by claiming that we live in a post- industrial society, based on services rather than on the production of goods. Supposedly workers only make goods, whereas those who provide services are middle class. But for Marxists, productive workers have always been those who produce and distribute both goods and services, as long as capitalists make surplus value off their labor. Furthermore, non-productive workers in commerce, finance and government are part of the working class. They don’t produce surplus value, but they sell their labor power exactly like productive workers do. Just looking around this society, we can see that those working in the service sector share the same conditions of work and life as other workers.

From a scientific point of view, classes are not something arbitrarily defined; they are phenomena that have an independent existence in society outside the imaginative thinking of politicians and ideologists. Classes are groups of people who share a common relation to the means of production and to other classes. In today’s society, the capitalist class owns the means of production and the working class sells its labor power for less than the value of the labor it delivers to the capitalist. The middle class, if the word makes sense, is made up of those who are neither capitalists nor proletarian and have different relations to the means of production and different relations to the main exploitative relation in capitalist society. So are they really the majority, as these arguments hold?

The Long-term Decline of the Traditional Petty Bourgeoisie

There was a time when the United States might have been considered a middle class nation, at least if we look in terms of numbers. In the 19th century, the petty bourgeoisie, those who owned a small amount of the means of production and worked for themselves, was the biggest class. In the 1820 s, 80% of the free labor force were property owners of one sort or another, mostly small farmers. Of the whole labor force, counting slaves, about 55% were property owners. By 1880, only 42% of the U.S. was still self-employed, either as small farmers, artisans or small traders. But, in addition, many of the ex-slaves who were landless, now worked as share-croppers, that is, they were a kind of landless peasantry. If these people are counted as part of the middle class, which they were, even though a middle class without property, the proportion of middle class people in the population was probably not that much less than it had been in 1820.

The 20th century saw the unremitting decline of this old middle class. The self-employed went from

30.6% of the economically active population in 1910, to 25.5% in 1930, 18.2% in 1950, 13.1% in 1960, and 10.6% in 1990. According to figures from the OECD, in 1992, the self- employed were 8.5% in the U.S., 13.1% in Japan, 12.6% in France, 9.0% in Germany and 11.9% in Great Britain. Rather than being the middle class nation, in terms of the petty bourgeoisie, the U.S. is the least middle class of the imperialist countries!

Marx gave a reason for this decline of the petty bourgeoisie. The "Manifesto" says:

"The low strata of the middle class - the small tradespeople, shopkeepers, and retired tradesmen generally, the handicraftsmen and peasants - all these sink gradually into the proletariat, partly because their diminutive capital does not suffice for the scale on which Modern Industry is carried on, and is swamped in the competition with the large capitalist, partly because their specialized skill is rendered worthless by new methods of production." The number of the petty bourgeoisie have decreased enormously in the U.S., first because of the continuing decline of family farms. According to the U.S. Department of Agriculture, there were 7.6 million family members working on their own farms in 1950 and only 1.9 million in 1989. Second, the giant stores have driven out many small businesses. Large supermarkets and department stores long ago replaced the vast majority of mom-and-pop stores. In recent decades, many of these larger stores have themselves been taken over or replaced by chains. Independent owners of gas stations have been replaced by managers working for the oil monopolies. Fast food restaurants have replaced hundreds of thousands of family owned restaurants.

The spread of giant companies like WalMart have left a swath of closed businesses in small towns across the country.

Today, the traditional petty bourgeoisie is only some 10.5 million people who are self-employed and employ no one, and an additional 3.6 million who on average employ one worker besides themselves. A further two million workers are primarily wage or salary workers and have a small business on the side. Services account for 39% of petty bourgeois businesses. In 1990 there were 281,000 auto repair businesses, 321,000 offering lodging, and 292,000 beauty shops. In retail there were 253,000 restaurants and bars and 120,000 grocery stores. Construction accounted for 12% of the businesses, and farming, forestry and mining combined accounting for only 3.4%.

Rather than the middle class being the route to economic security and independence that the myth of the middle class would have us believe, the bottom of the petty bourgeoisie has proven to be a revolving door emptying more into than out of the working class. Those who managed to leave the working class to try their luck as small businessmen often returned to where they came from. According to a study of white men starting their own businesses from 1968 to 1987, about a third left their business for wage work within three years, about half within seven years, and about three-fifths within 10 years. Undoubtedly, the figures for women or other minorities, who face more obstacles in starting up businesses, would not depict a better situation.

The actual number of the self-employed petty bourgeoisie has grown since 1973, even though their proportions in the labor force have shrunk. But a sizeable number of the petty bourgeoisie today are workers in disguise. Large employers have found it cheaper to eliminate the employer share of social security contributions, workers compensation and unemployment compensation, transforming, at least legally, their workers into self- employed persons with whom they could contract. In construction, one-third of the so-called self-employed work year round for one single employer. Taxi drivers who used to work for wages have been forced to lease their cabs in a number of cities, remaining completely subordinate to the big taxi companies. Truck companies found the transformation of truck drivers working for wages into owner operators profitable in certain sectors like steel hauling. The giant corporations have increased subcontracting, which affects workers in sectors like machinery making. The garment industry maintains sweatshops in either tiny shops or in the workers homes. Other self- employed people address envelopes or engage in telemarketing at home. Besides the direct encouragement of self-employment by the capitalists to lower their costs, the bottom section of the working class is drawn to it as a response to the crisis and its attendant poverty.

A self-employed construction worker can work for himself one day, work for wages for a buddy another day, and hire a few of his friends as wage workers on the day after. He is not a combined capitalist-petty bourgeois- worker, but a worker on the edge.

Marx’s assessment of the disappearing middle class has proven to be completely correct as far as it applies to the petty bourgeoisie. The penetration of large-scale capitalism into every facet of life has driven the remaining petty bourgeoisie into a few last corners.

A New Middle Class

The propagandists for the middle class nation have certainly drawn attention to the rise in numbers of salaried managers and well-educated professionals, a social development just only beginning at the time of Marx. They number today 25 million people and make up 21% of all persons involved in the economy. Like workers, they are employed by capitalists and don’t own their own businesses, but they are supposed to have an expertise which entitles them to a special place in society and often gives them control over the labor of workers working underneath them and in general a more privileged situation and a higher income than workers. They make up a new dependent middle class that is two times more numerous than the independent middle class that has survived from the past. The new middle class added to the traditional petty bourgeoisie add up to roughly 30% of the economically active population. Thus, the middle class remains substantial, even if it is a smaller part of the population than it was in this country in the last century or the first part of this century. But does this call in question Marx’s analysis of the decline of the middle class?

Society has had professionals for many centuries, but up to the end of the 19th century most were those who had skills coming from a university education and were self employed. Today only nine percent of professionals remain self-employed, numbering some two million. The most important of those professions, in terms of numbers, are dentist, doctor and lawyer. Together, they account for 1.5 million people. But even these professionals are rapidly being tied to the big corporations. Doctors and dentists find today that they have to affiliate with a managed-care organization, a big insurance company or hospital chain, or they won’t be in business. Just as more lawyers find themselves working directly, or on retainer, for large companies. While there is still a niche for self-employed professionals, they make up only 1.2% of persons involved in the economy.

Today ninety-one percent of professionals work for a salary from the capitalists or the state. They have increased so much in numbers and importance because large scale industry and the state have a need for highly educated persons trained in the sciences, engineering, the social sciences and finance. Unlike the old independent professionals answerable to themselves and the old proprietors who managed their own businesses, these persons are now hired employees subject to dismissal, who usually work for large, bureaucratically run organizations. They have to work with others and are inserted into the capital-labor relation, between the bourgeoisie and the workers.

Obviously an individual capitalist cannot run everything; they have to delegate authority to subordinates, that is to the people we call managers. In fact, capitalism already had need of them at the time of Marx who thus described, in Capital, their functions:

"On the one hand, all labor in which many individuals co-operate necessarily requires a commanding will to coordinate and unify the process, and functions which apply not to partial operations but to the total activity of the workshop, much as that of an orchestra conductor. This is a productive job, which must be performed in every combined mode of production. On the other hand - quite apart from any commercial department - this supervision work necessarily arises in all modes of production based on the antithesis between the laborer, as the direct producer, and the owner of the means of production. The greater this antagonism, the greater the role played by supervision."In return for these functions, according to Marx, they were given salaries that were "the wages of superintendence" paid for the "labor of exploiting".

Today, of course, they are more numerous and more important. They have taken over all aspects of running the affairs of the capitalists. They control the physical capital, money capital, and the labor of the workers who produce the surplus value. But effectively, their basic function hasn’t changed.

"Upward Mobility"

The considerable incomes of a part of this new middle class, their education and their social ties to the big bourgeoisie all give part of this new middle class the possibility of moving upward on the social ladder.

In general the salaries and benefits of managers and professionals are higher than those of workers. The combined salary and benefits of professionals with at least a Bachelor’s degree who were the highest earners in the family was $27.29 per hour in 1990, that is on average half again as much as that of skilled workers. Families headed by professionals had total family income averaging $83,653, almost three times that of manual workers families.

But obviously these averages hide a wide variation. Almost three quarters of the families with the highest incomes (that is the top 5%) are managers and professionals. This high income enables a part of the new middle class to make substantial investments. In 1990, families of professionals had $9,653 in property income per year, compared to only $387 for manual workers. With investments in stocks, bonds, mutual funds and real estate, the better-off sections of the new middle class have a stake in the exploitation of labor. They are rewarded with a share of the surplus value for performing special services for the capitalists. The upper levels accumulate so much wealth that they can even become a part of the capitalist class proper. But for the managers and the professionals, including categories like athletes or entertainers, this is true for only a small part.

The upper layers of the middle class have numerous social ties to the bourgeoisie. Often the children of small or even large capitalists become managers or professionals, and the children of these people have easy access into the bourgeoisie. The upper layers of the new middle class go to the same schools as the children of the capitalists and form lifelong ties. This part of the new middle class frequently lives in the same neighborhoods as do the capitalists. The new petty bourgeoisie and the bourgeoisie often socialize together and intermarry.

And Downward Mobility

Nonetheless, the salaried petty bourgeoisie exhibits a wide range of differences in its standard of living and the conditions of its work. There is a big difference between an upper manager, integrated into the bourgeoisie itself, and a purchasing manager responsible for the same type of purchases day after day, supervising no one. The very well paid doctor who is part owner of the hospital is far removed from the registered nurse who is tightly supervised and overworked.

The way the term professional is used is far from precise. Among those the U.S. Department of Labor calls professionals, one-fourth have less than a Bachelor’s degree. A quarter of salaried professionals with a Bachelor’s Degree get under the average pay of skilled trades workers. These bottom level professionals lack the characteristics that make other professionals middle class: they are not highly educated, well paid, nor do they have much control over their jobs. Effectively, they are a part of the working class.

The same thing is the case for the lower ranks of managers, the supervisors who come into direct contact with workers. In the construction trades in the United States, foremen and general foremen are often members of unions, and go on strike with other workers. Workers routinely rotate through these foremen positions. In the phone company, there is one "supervisor" for every three workers, and they do much the same work. In many very small firms, the size of a Kentucky Fried Chicken place, the manager does much the same work as the workers, who may number only a handful. The manager’s pay is only a little above that of the workers and much less than that of many factory workers. The ties that bind them to workers are much greater than any connection to the top management of the giant corporation they work for.

Moreover, with the long term crisis of capitalism the situation of a part of this new middle class is undoubtedly getting worse. As the corporations "restructure," they often reduce the wages and benefits not only of the workers, but also of the salaried managers and professionals, laying many of them off and increasing the intensity of work of those left behind. According to the U.S. Department of Labor, 8.0% of executives, administrators and managers and 3.5% of professionals suffered the permanent loss of their jobs in the 1990-91 recession, compared to 12.4% of semi-skilled and unskilled production workers. Sections of the new middle class are even pushed into the working class, properly speaking.

It’s undoubtedly why we have seen some sections of them react as workers, resorting to collective action and strikes. At the time of the severe energy crisis in 1974, many thousands of gas station owners, who found their margins drastically reduced by the giant oil companies, organized "work stoppages" to raise their margins. Steel hauler owner-operators have organized various work stoppages against brokerage companies. The Seattle Professional Engineers Association led a one day strike against Boeing in 1993 over the absence of a Cost of Living Allowance. And as the situation in professional baseball, not to mention hockey and basketball, recently demonstrated, the owners of sports teams are ready to treat their highly - and not so highly - paid players with the same disdain that a factory manager treats the workers. Even some managers have tried to organize themselves.

Various professionals in the United States, as in other countries, have turned to unionization. Their collective bargaining activities may be very sectionalist, defending their own narrow interests and ignoring those of others, but unfortunately this doesn’t differentiate them from workers unions, which do the same thing. Professionals in fact are proportionately more unionized than are other white collar workers. Major unions include Actors Equity, the Screen Actors Guild, the American Federation of Television and Radio Artists, the Musicians, the American Federation of Teachers, the National Education Association, the Air Line Pilots of America, the Newspaper Guild, and the Air Traffic Controllers.

In the Middle and Pulled in Two Directions

The middle class as it developed in the advanced capitalist countries is different from what it was in Marx’s days. But despite its transformation and some expansion into unexpected areas, the middle class remains caught between the two basic classes in society, the capitalist class and the working class. The middle class is a catch- all between these two fundamental classes, lacking in internal cohesion and without common interests. In fact, it makes more sense to speak of the middle classes rather than the middle class, given this lack of commonality.

When Marx discussed the middle classes, he stressed that the part of the old petty bourgeoisie which would not be able to become real capitalists would be drawn into wage labor. This has also been the case with a part of the new middle classes, who sell their labor power, are controlled from above and are at times dismissed, just like workers are. The capitalists have so far maintained large layers of the salaried middle class at a level above the working class, both in income and power. But the capitalist crisis threatens to undermine this privileged position, undermining the skills and proletarianizing sections of the new middle classes.

Besides the objective determinants of social classes, their relation to the means of production and other classes, there is the subjective side, their consciousness of themselves and their role in society. We live in a period where the working class has very little consciousness of itself as a class and its potential power to unite and make a struggle to advance its collective position and to give a new direction to society. The bourgeoisie has been highly successful in promoting its class ideology, an important part of which is this idea that everyone is or can become middle class. It has succeeded in making millions of workers believe that in some way they are part of the middle class, somewhat above the lower layers of society.

So it’s not surprising that in normal times the well-off members of the middle class think of themselves as above the workers and identify with the bourgeoisie. But as the capitalist crisis gets more severe, the bourgeoisie can attack the situation of the middle class as well as that of the working class. If at the same time the working class enters into sharp social struggles, fighting to make the capitalists pay for their crisis, part of those people who today see themselves as middle class may come to see themselves as workers, which they also are in many respects.

The obstacle for the proletariat is not the existence of the middle class; the obstacle is that the proletariat doesn’t have a clear consciousness of its own interests as a distinct class. The existence of middle classes in the past, even when they were the majority, has not been the decisive factor, determining whether the oppressed class is able to wage a struggle. As in the past, what is necessary is that the working class obtain a full awareness of its own historical potential and find the organizational forms and leadership to ensure its victory. In so doing, it will be able to propose goals and struggles to those parts of the middle class with whom it has common interests and bring them over to its side.