Addressing the shrinking of the middle class is crucial to fight the rise of nationalism, protectionism and populism in the next European elections, Margherita Movarelli argues.
Nowadays we are all very much exposed to populist messages. There is nothing new in that. The news is the increasing support populism has gained outside of its usual social (and social media) bubble. Populism today is not just a trap for the lower educated people living at the margins of society, as its detractors may think or wish. Checking your own Facebook homepage is probably the easiest test to see at a glance that a growing number of people with a good level of education and belonging to the so-called middle class also share populist claims and opinions.
Such perception is confirmed by the high percentages registered in polls by populist parties across different European countries. While those “left behind” by globalisation and protest voters still constitute the populists’ main target audience, populism has also been spreading among middle-class households, whose condition, worryingly, has been worsening over the past decade. With the European elections approaching, it is important to understand how the condition of the middle class has changed and how this could influence electoral results in different member states; potentially boosting the performance of populist movements across the continent.
Certainly, populism is a complex phenomenon fuelled by a mix of different variables. Socio-economic challenges such as growing inequality and economic stagnation have played a major role. This, combined with political, cultural and identity challenges has created the perfect environment for populist movements to grow and prosper.
Since the Great Recession that followed the economic crisis of 2008, the position of the middle class in different European countries has deeply changed, unfortunately not for the better. Recent data published by the OECD paints a gloomy picture. Middle-class households, who account for 61% of the population on average in OECD countries, have seen their income falling or stagnating while, at the same time, the cost of living – housing, education and healthcare – has been rising. In terms of jobs, the markets have already registered a decrease in medium-skilled occupations, due to automation and technological progress. This trend will continue in the future; it is estimated that one-in-six middle-income workers are in jobs that are at high risk of automation.
On the other hand, as is extensively explained in two publications co-funded by the Martens Centre, (No Robots 2017, The Middle 2018), there has been a decrease in job security in middle-class households. This is due to both an increase in the number of temporary contracts and a hiring crisis in the public sector which would otherwise typically provide middle-class jobs. In addition, middle-class families – which predominantly follow a dual-earner model – are struggling to find a sustainable work-life balance. This is due, on the one hand, to higher pressure in their working lives and, on the other hand, to insufficient childcare resources and the lack of policies that could encourage and facilitate parenthood.
Despite the social welfare and benefits in place in many countries, middle-class families often feel that the system is unfair and that they contribute more than they receive in return. This is indeed the case with middle-class working-age households, who according to OECD data are net contributors as they pay 17% more in taxes than they receive in benefits. On the other hand, elderly middle-class households are net beneficiaries, receiving 60% more in benefits than they pay in taxes. Such a situation has resulted in an atmosphere of general disillusionment, most discernible among younger generations.
On the other hand, new security and societal challenges, mostly connected to the migration phenomenon, have left many middle-class households feeling under attack. The principles and values upon which the traditional middle-class social model is built seem to be eroding. Identity politics are to be interpreted as a reaction to an increasingly multi-cultural society with which many people do not identify.
This overall situation is connected in many ways to the rise of populist movements across Europe. The middle class’ worsening condition has contributed to the reshaping of socio-economic balances and electoral trends differently in each country. However, there is a common thread in the general feeling of economic dissatisfaction and social despair that has helped increase the polarization and conflict level in many European societies.
Populist movements have largely benefited from such a climate all over Europe and beyond (what happened in the US with the election of Donald Trump is part of the same phenomenon). They have developed and offered an electoral alternative not just for lower-income households, but also middle-class households unsatisfied with government policies and mainstream political platforms. This is what happened in Italy, where the two populist parties – the Five Star Movement and the League – had overwhelming electoral success which enabled them to form a coalition government. Today, according to the polls, they are still supported by more than 50% of Italians when taken together. Similarly, in Sweden’s 2018 general election, the far right and anti-immigration Swedish Democrats reached 17.5%, corresponding to over 1 million votes, becoming the third largest political force in the country. This is just to mention two of the most recent and emblematic cases from Southern and Northern Europe, but the continent offers a wide variety of case studies demonstrative of this phenomenon.
Therefore, as much as it is important to address growing inequality and poverty in different European countries, addressing the shrinking of the middle class is also crucial. These should be considered as priorities by those who want to prevent the potential success of nationalism, protectionism and populism in the next European elections. In concrete terms, we can identify three key policy areas on which action must be taken. First of all, tax reforms are required in order to help reduce inequalities and ease the burden on lower-income and middle-class households, as well as increasing female participation in the labour force and overall productivity. Second, measures must be taken to help people cope with the rising cost of housing, education, childcare and healthcare. Last but not least, the promotion of life-long learning is also important in order to address the new demands in terms of skills brought about by technological progress. Such policies should be of course tailored to each country’s specific situation and accompanied by specific measures that can help regain the support of what used to be – and still is – the core of our societies.