1 Repartimonialization: Wage Based Middle Class and Wealth Based Middle Class in a Comparative Perspective Louis Chauvel Pr at Sciences-Po Paris and Institut.

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“Repartimonialization”:

Wage Based Middle Class and Wealth Based Middle Class

in a Comparative Perspective

Louis ChauvelPr at Sciences-Po Paris

and Institut Universitaire de France

Site : http://louis.chauvel.free.fr

[email protected]

路易•肖韋爾 社會學教授法國大學研究院成員

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Plan

*The four middle classes

*The 1964-1984 coming of a wage-earner middle class society?

*The old mapping of the middle classes in the world

*Farewell to the European exception?

*The coming wealth-based society

*Conclusion : toward a sociology of European backlashes ?

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The four middle classes : The State and the “new middle class” = intermediate wage earner middle class

SCHMOLLER G. 1897, Was verstehen wir unter dem Mittelstande? Hat er im 19. Jahrhundert zu oder abgenommen?, Göttingen, Vandenhoeck und Ruprecht.

Against the Marxist theory of absolute pauperization :

=> Late Nineteenth century and the expansion of large state and private technical, managerial and expertise bureaucracies – supported and institutionalized by increasing social rights – foster the constitution of a culturally educated and economically comfortable “neu mittelstand”

Educational ressources

Economic Ressources

Higher strata

Lower Strata

New higher middle class

Old higher middle class

New lower middle class

Old lower middle class

=> The state is not simply an equalitarian ruler, a provider of decommodified resources, it could be also a specific employer

4

Former elements of “middle-ization”

*Homogenization (economic equality)

*Objective upward mobility (socioeconomic expansion)

*Security, control on one’s future (welfare state and labour protection)

=> Middle class expansion and “wage earner society” (soc. salariale)

The wage earner middle class

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x3

Private sector wage earner (full time full year), net real wages (constant euros 2004) (source INSEE DADS)

Period

Managers, professionals & experts

Lower professionals

Routine white or blue collars

0

10000

20000

30000

40000

50000

60000

1940 1950 1960 1970 1980 1990 2000 2010

Cadres

Professions intermédiaires

Employés / Ouvriers

6

Source : Long term series on wages – INSEE. Note : in 1955, the cadres’ average wage was 3,9 times higher than the worker’s. Between 1950 and 1955, the average real growth wage was 4,8%; in 1955, with this rhythm, Catch-up time lag (= the time after which workers’ wage catch up the cadres’) was 29,1 years.

Catch-up time lag

Wage ratio cadres / ouvriers

(A)

Full time wage earners

Interdecile ratio

Annual average real growth wage for full time workers

during the last 5 years (%) (B)

Catch-up time lag (years) [ = log(A) / log(1+B/100) ]

1955 3,9 3,5 4,8 29,1 1960 3,9 3,8 2,8 49,7 1965 4,0 4,1 3,5 40,0 1970 3,8 3,6 3,7 36,8 1975 3,4 3,4 3,5 35,7 1980 2,9 3,2 1,6 65,1 1985 2,7 3,1 0,3 371,9 1990 2,8 3,2 0,3 353,0 1995 2,6 3,2 0,3 316,2 2000 2,5 3,1 0,6 150,6

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Decline and stabilization in the income inequality

Sources : publications des Enquête revenus fiscaux ERF ; nouvelle série : INSEE reevaluation ERF

Equivalized household disposable income : Interdecile Ratio D9/D1 1954 à 2004

0

1

2

3

4

5

6

7

8

9

1950 1960 1970 1980 1990 2000 2010

8

50

100

Lower income class = poor

200

Median income class =« middle class »

Higher income class = rich

median income

IncomeThe strobiloid

representation of distribution

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Comparisons of national strobiloids : national median

Sweden :Median disposable income per year per capita : 23.000 $PPP/an

Gini coef.: 25.2 %

Median class = 84 %

US :Median disposable income per year per capita : 32.000 $PPP/an

Gini coef.: 34.5 %

Median class = 58 %

Chile :Median disposable income per year per capita : 8.000 $PPP/an

Gini coef.: 57.2 %

Median class = 47 %

Median national income

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lComparisons of national strobiloids : PPP exchange rate

Sweden :Median disposable income per year per capita : 23.000 $PPP/an

Gini coef.: 25.2 %

Median class = 84 %

US :Median disposable income per year per capita : 32.000 $PPP/an

Gini coef.: 34.5 %

Median class = 58 %

Chile :Median disposable income per year per capita : 8.000 $PPP/an

Gini coef.: 57.2 %

Median class = 47 %

11

The social specificity of Europe in the world

*An affluent and relatively equal club

*Europe as a strong middle class (“median class”)

*Complex evolutions during the last 20 years…

12

Development (per capita GDP PPP)

Inequality (Gini coeff)

20

25

30

35

40

45

50

55

60

1000 10000 100000

(World Income Inequality Database)

(Penn World Tables Database)

Poor & unequal Rich & unequal

Poor & equal Rich & equal

13

Development (per capita GDP PPP)

Inequality (Gini coeff)

Venezuela

Ukraine

Australia

Austria

Azerbaijan

Bangladesh

BelarusBelgium

BoliviaBrazil

Bulgaria

Cambodia Cameroon

Canada

Chile

China

Colombia

Costa Rica

Cote d`Ivoire

Croatia

Czech R.Denmark

Dom.Rep.

Ecuador

Egypt

El Salvador

Estonia

Finland

France

Gambia

Georgia

Germany

Ghana

Greece

Guatemala

Guyana

Honduras

Hungary

India

Indonesia

Iran

Ireland

Israel

Italy

Jamaica

JapanKazakhstan

Korea R.

Kyrgyz R.

Latvia

Lesotho

Lithuania

Luxembourg

Macedonia

Malaysia

Mauritania

Mexico

Moldova

Morocco

Netherlands

Nicaragua

Norway

Pakistan

PanamaParaguay

PeruPhilippines

Poland

Portugal

Romania

Russia

Slovak Rep.Slovenia

Spain

Sri Lanka

Sweden

SwitzerlandTaiwan

Tajikistan

Thailand

TunisiaTurkey

U.K.

U.S.

y = -5,6712Ln(x) + 88,851R2 = 0,3085

20

25

30

35

40

45

50

55

60

1000 10000 100000

(World Income Inequality Database)

(Penn World Tables Database)

Data 2000

Nordic countries

Corporatist countr.

Liberal and Mediterranean countr.

Transitional Eastern Europe

Latin America

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Development (per capita GDP PPP)

Inequality (Gini coeff)

Venezuela

Ukraine

Australia

Austria

Azerbaijan

Bangladesh

BelarusBelgium

BoliviaBrazil

Bulgaria

Cambodia Cameroon

Canada

Chile

China

Colombia

Costa Rica

Cote d`Ivoire

Croatia

Czech R.Denmark

Dom.Rep.

Ecuador

Egypt

El Salvador

Estonia

Finland

France

Gambia

Georgia

Germany

Ghana

Greece

Guatemala

Guyana

Honduras

Hungary

India

Indonesia

Iran

Ireland

Israel

Italy

Jamaica

JapanKazakhstan

Korea R.

Kyrgyz R.

Latvia

Lesotho

Lithuania

Luxembourg

Macedonia

Malaysia

Mauritania

Mexico

Moldova

Morocco

Netherlands

Nicaragua

Norway

Pakistan

PanamaParaguay

PeruPhilippines

Poland

Portugal

Romania

Russia

Slovak Rep.Slovenia

Spain

Sri Lanka

Sweden

SwitzerlandTaiwan

Tajikistan

Thailand

TunisiaTurkey

U.K.

U.S.

y = -5,6712Ln(x) + 88,851R2 = 0,3085

20

25

30

35

40

45

50

55

60

1000 10000 100000

Data 2000

15

Development log10(per capita GDP PPP)

Inequality (Gini coeff)

Australia

Austria

Belgium

Canada

Czech R.

DenmarkFinland

France

Germany

Greece

Hungary

Ireland

Israel

Italy

Japan

Korea R

Malaysia

Netherlands

Norway

Poland

Portugal

Romania

Russia

Slovak Rep.Slovenia

Spain

Sweden

Switzerland.

Taiwan

TunisiaTurkey

U.K.

U.S.

y = -16,122x + 101,38R2 = 0,3387

20

25

30

35

40

45

3,6 3,7 3,8 3,9 4 4,1 4,2 4,3 4,4 4,5 4,6

Data 2000

Bulgaria

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Development log10(per capita GDP PPP)

Inequality (Gini coeff)

U.S.

U.K.

Turkey Tunisia

Taiwan

Switzerland.

Sweden

Spain

Slovenia Slovak Rep.

Russia

Romania

Portugal

Poland

Norway Netherlands

Malaysia

Korea, Republic of

Japan

Italy

Israel

Ireland

Hungary

Greece

Germany

France

Finland Denmark

Czech R.

Canada

Belgium

Austria

Australia

20

25

30

35

40

45

3,6 3,7 3,8 3,9 4 4,1 4,2 4,3 4,4 4,5 4,6

Australia

Austria Belgium

Canada

Costa Rica

Czech R.

Denmark

Finland

France

Germany

Greece

Hungary

Ireland

Israel Italy

Japan

Korea, Republic of

Luxembourg

Mexico

Netherlands

Norway

Poland

Portugal

Russia

Slovenia

Spain

Sweden

Switzerland.

Taiwan

Tunisia

U.K.

U.S.

Venezuela From early 1980’ to 2000

Bulgaria

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Development (per capita GDP - PPP)

Inequality (Gini coeff)

U.S.

U.K.

Turkey Tunisia

Taiwan

Switzerland.

Sweden

Spain

Slovenia Slovak Rep.

Russia

Romania

Portugal

Poland

Norway Netherlands

Malaysia

Korea R

Japan

Italy

Israel

Ireland

Hungary

Greece

Germany

France

Finland Denmark

Czech R.

Canada

Belgium

Austria

Australia

20

25

30

35

40

45

3,6 3,7 3,8 3,9 4 4,1 4,2 4,3 4,4 4,5 4,6

Australia

Austria Belgium

Canada

Costa Rica

Czech R.

Denmark

Finland

France

Germany

Greece

Hungary

Ireland

Israel Italy

Japan

Korea R

Luxembourg

Mexico

Netherlands

Norway

Poland

Portugal

Russia

Slovenia

Spain

Sweden

Switzerland.

Taiwan

Tunisia

U.K.

U.S.

Venezuela From early 1980’ to 2000

Bulgaria

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Nota : Revenus après transferts rapportés au nombre d’unités de consommation (« équivalent adulte ») selon l’échelle de la racine carrée. Le rapport interdécile est le rapport entre le niveau de vie du bas du dixième de plus riche, rapporté à celui du haut du dixième le plus pauvre. Source : data lisproject complétées Insee – enquête Bugdet des ménages 1999

.U.S

.U.S .U.K

.U.K

Taiwan

Taiwan

Sweden

Sweden

Spain

Spain

Israel

Israel

Germany

Germany

FranceFrance

2

2,5

3

3,5

4

4,5

5

5,5

6

1975 1980 1985 1990 1995 2000 2005

Rapport interdécile

Année

Evolution du degré d’inégalité de 8 pays 1980 à 2000 :Les inégalités économiques sont restées stables en France

19

Development (per capita GDP PPP)

Inequality (Gini coeff)

20

25

30

35

40

45

50

55

60

1000 10000 100000

(World Income Inequality Database)

(Penn World Tables Database)

Brazil

China

India

Pakistan “Western” Europe

US

“Eastern” Europe

Latin America (1980-2000 trends)

France “30 glorieuses”

1945-1975trend

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European Enlaregment and inequality intensification

European enlargement

step European Gini(exchange rate)

European Gini

(PPP)

6 29% 28%

12 32% 30%

15 31% 30%

25 42% 33%

28 58% 43%

31 59% 43%

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The coming wealth based society

*The wealth distribution: back to he Pareto distribution

*Age/cohort and wealth

*modelling wealth: emerging factors

22

French Income and Wealth Strobiloïd 2004 in euro

100 = median income 100 = median wealth

Note : the strobiloïd is the shape of social pyramid corresponding to the distribution of income (versus wealth) (see Chauvel, 1995). At a given level of income, the larger is the curve, the more people are positioned around this point. If 100 is the median income (per capita in the household) a large strobiloïd at level 100 shows a large middle class (in the Swedish situation, for instance) at an equal distance between extremes. For wealth, there is clearly no middle class, and the population is stretched between the extreme high level of accumulation and the extreme low. The points C, I, E et O shows the median C “cadres” = higher professionals, managers etc. I “professions intermédiaires” = lower professionals and intermediate white collars, E “Employés” routine white collars, and O “ouvriers” = blue collar workers. For Wealth, these are not the median but average positions.

Source : income : Budget des ménages survey INSEE 1995 and wealth : Actifs financiers INSEE 1992 , reevaluation for year 2000 (growth and inflation)

Average income

25 % are below 0,15 times themedian wealth

0

100

200

300

400

Median householdgross wealth :500 KF

Yearly median percapita disposableincome : 65 KF

25 % are above 2,32 times themedian wealth

10 % are above 3,95 times themedian wealth

5 % are above 2,33 times themedian income

25 % are above 1,39 times themedian income

10 % are above 1,92 times themedian income

25 % are below 0,72 times themedian income

10 % are below 0,55 times themedian income

Average wealth

Wealth(by household)

Income(per capita)

C

I

E

OE

O

I

C

Median wealth : 100K€

Median income : 10K€/capit /year

Gini= 28% Gini= 68%

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US change in the income / wealth distribution

Income Income Income Income 1994 2004 Delta points Delta%

Top Quartile 135 417 177 265 41 848 31%Upper MiddlecQuartile 49 264 57 310 8 046 16%Lower Middle Quartile 27 156 31 803 4 647 17%

Bottom Quartile 9 822 12 688 2 866 29%

Wealth Wealth Wealth Wealth 1994 2004 Delta points Delta%

Top Quartile 885 934 1 556 801 670 867 76%Upper MiddlecQuartile 122 490 185 537 63 047 51%Lower Middle Quartile 37 634 47 153 9 519 25%

Bottom Quartile 204 1 344 1 140 (+558%)

Wealth years Wealth years1994 2004

Top Quartile 6,54 8,78 Upper MiddlecQuartile 2,49 3,24 Lower Middle Quartile 1,39 1,48

Bottom Quartile 0,02 0,11

Zhu Xiao Di, 2007, « Growing Wealth, Inequality, and Housing in the United States”,WP Joint Center for Housing Studies of Harvard University.

24

Age distribution of wealth (100= average wealth in 1992/2004)

Marie Cordier, Eric Gautier et Cédric Houdré, WP CREST 2007¶

25

Income

Age

Householdtype

Main bread earner occ.

(-)

(=)

(+)

(-)

Marie Cordier, Eric Gautier et Cédric Houdré, « Inégalités de patrimoine en 2004 » Données sociales 2006, INSEE, Paris. ¶

26

Urban communitytype

Education

Self empl.

Housing property

Inheritance

(-)

(-)

(+)

(-)

(+)

27

% R² of the model with the variable – R² of the model without the variable

28

Former elements of “middle-ization”

*Homogenization (economic equality)

*Objective upward mobility (socioeconomic expansion)

*Security, control on one’s future (welfare state and labour protection)

=> Middle class expansion and “wage earner society” (soc. salariale)

New challenges in a globalized world

*Heterogeneity (income stagnation, old/new inequalities and wealth boom)

*Risks of downward intergenerational mobility (+ overeducation)

*Lack of predictability affecting welfare, precarity, anxiety

=> middle class expansion results of the “wage earner society”

Farewell to the wage earner middle class

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Public policies

* State as an employer and an investor in the knowledge soc.

* Fiscal policies (labour taxation and wealth taxation)

* Future of labour regulations