The market growth-generating middle class is dead. Or is it?

On the desk in front of me sits an object that is emblematic of the current sad state of the British middle class – a tin of Essential Waitrose Ratatouille Provençale.


It’s poignant because a few short years ago, retiring to Provence seemed a distinct possibility. Now even the full-price canned version of the dream is out of reach for many.

The decline of the American middle class is a well-documented phenomenon. Between 1970 and today, the share of income that went to the middle class – households earning two-thirds to double the national median – fell from 62 to 45 per cent.

 In Britain, the middle class is as much an idea as an economic segment. Can economic reality kill an idea? It seems so, at least according to economist David Boyle’s book Broke: Who Killed the Middle Classes?.

While 43 per cent of the country says it is middle class, the truth is that of those earning £66,600 or more a year, 17 per cent cannot afford holidays and 40 per cent have no retirement savings.

The cost of being middle class has increased out of proportion to the cost of merely living. Take the price of education, perhaps the defining middle class value. The cost of putting children through an independent school, or moving into the catchment of a good state one, has escalated astronomically over the past 20 years.

Meanwhile inheritances – John Major’s predicted intergenerational ‘cascades of wealth’ – have in many cases been eaten up by the cost of caring for a generation that has proved inconveniently long-lived.

It gets worse, at least in the pages of internet visionary Jaron Lanier’s book Who Owns the Future?, the answer to which seems to be a conclusive ‘Not you, Surbiton man’.

Lanier’s text is a kind of Das Kapital for the information age. A Das Digital, perhaps. He shows how the professional classes historically erected barriers around their proprietary resources of knowledge in the form of professional qualifications and arcane languages. Increasingly, the internet has undermined these barriers, liberating the knowledge and thus the power of the middle class.

For fans of American writer and futurist Alvin Toffler, it’s a familiar and persuasive argument. Though Lanier’s proposed cure for the middle class malaise is perhaps a little less convincing, at least in the near term. He suggests that the disenfranchised middle class reassert its power by selling its personal data to the data-intensive industries owned by ‘the one per cent’. This a fascinating idea. But a quick Google search takes you to the Kickstarter page of a man who’s actually done this. And his experience is not overly encouraging. 

Federico Zannier has diligently catalogued the sum total of his entire browsing, ecommerce and geolocational data output and put it on the market to the highest bidder. So far he’s only making $2 a day, which wouldn’t even buy him 150g of Essential Waitrose Parmigiano Reggiano.

The middle class has been the engine of market growth for at least a century. How can marketers prepare themselves for its demise? 

One answer is to follow Procter & Gamble’s US example and develop an hourglass-shaped approach to brand portfolio strategy, polarising your product range to appeal to aspirant one-percenters on the one hand and the penny-counting masses on the other. There are signs of such strategies everywhere. At the recent Frankfurt Motor Show, Ford trailed the less than convincing idea of escaping a shrinking middle market by slapping pleated leather into a Mondeo and calling it a Vignale.

Does history teach us any lessons? I didn’t know, so I phoned a friend, Dr David Rundle who is an expert in medieval and early-modern Europe. He reminded me that any middle class is essentially an urban phenomenon. In days past, when a town fell into decline, its middle class disappeared. But as a new town rose, a new middle class would spring up as if by magic.

And that’s what’s happening now. A new middle class is beginning to appear in Russia. The same is true in China, India and the Middle East.

So the middle class is alive and well and living in Bangalore. Where one imagines there must be quite delightful farmers’ markets. And, any day soon, a sparkling new branch of Waitrose.


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