More Than Squeezed, More Than The Middle

Ian Jack writes:

In Ken Loach's new documentary about the postwar Labour government, The Spirit of '45, a few witnesses to the 1930s recall how hard life was. "Everything was run by rich people for rich people," says a retired GP. "We slept five to a bed [that was] full of vermin," says an old Liverpool docker. "Bugs, fleas … behind the wallpaper, inside the skirting boards … at school we got the cane for dirty knees." Someone else remembers that they didn't have a carpet on the floor, and another that all they had to eat was bread and jam.

Until they were beaten into silence by mockery or cut short by mortality, memories such as these were once a commonplace in British family life, the background noise to so many weddings, funerals and Sunday teas. My father, for example, often talked about his early married life in a grim northern street called Cemetery Road, where he'd catch scuttling cockroaches by slamming down on them hard with a bar of soap.

He would smile about it – people of his generation tended to reflect on these things more wryly than Loach's solemn interviewees, who are there to serve an argument. And while Loach's film contains fascinating scenes – an election crowd jeering Churchill, for example – nobody watching it can be left in any doubt that argument is its main purpose.

The film implies that capitalism creates levels of poverty and unhappiness that can be cured only by the intervention of socialism, which is what happened when Labour came to power in 1945 and set about its programme of postwar reconstruction and public ownership. As someone born in a house fitted with a bathroom, and reared on the state's cod liver oil and orange juice (with the occasional spoonful of Radio Malt), who am I to disagree?

Yet Loach is too single-minded. His story has three simple acts. Working-class people were unhappy, then they were happy, then they were unhappy again. The Festival of Britain in 1951 marked the happy phase's highpoint. The next shot, skipping seven prime ministers and 30 years of British history, showed Margaret Thatcher quoting Francis of Assisi at the door of Downing Street. Through some unexplained electoral stupidity, unhappiness was about to return.

What happened next, of course, is the biggest event in Britain's postwar history, the deindustrialisation that not only destroyed most of the country's manufacturing capacity but also the social class whose organisations had sustained Labour since its foundation. Attlee's government faced a huge reformatory task in a nation bankrupted by war, but at least his party was then still enmeshed in the working class and could address the electorate in language that everyone understood. In the past, economic power had been "concentrated in the hands of too few men".

In the future, the country would have its "material resources organised for the benefit of the people". There would be no going back – an end to Beveridge's listed evils of want, idleness, ignorance, disease and squalor. The pledge translated into newsreel shots of bricklayers building council houses, pitmen washing in new pithead baths, a doctor taking a child's temperature.

Attlee's eighth successor as Labour leader, Ed Miliband, can neither speak such clear language, nor paint such appealing pictures. He doesn't identify enemies so much as problems. He sees "the squeezed middle" as one of Britain's bigger problems and also as an opportunity, because the phrase represents millions of voters. But what does it mean?

In 2010, Miliband himself seemed confused, telling John Humphrys on Radio 4's Today show that it described "people who are working hard, who are working in an economy [that has] the longest hours in western Europe … And they feel squeezed". Humphrys was still baffled. "I define them as people around the average income – both below and above the average income – not people on six-figure salaries," Miliband ploughed on, unhelpfully.

In fact, the term refers to households with an income below the median but above the poorest 10% and with less than a fifth of their income derived from means-tested benefits (excluding tax credits). The definition comes from the Resolution Foundation, a thinktank devoted to improving the lives of low-to-middle-income households ("the squeezed middle"), which estimates that they make up a third of the working-age population. Because the definition takes household size into account, the incomes that qualify for inclusion have an enormous range: from £12,000 to £30,000 a year for a couple with no children to £19,200 to £48,500 for a couple with three.

No wonder, then, that Miliband struggled to find an easy encapsulation of such a large and disparate group; or that the Tory party dispenses with fancy talk of medians and percentiles and uses a flattering broad brush to describe much the same people as "strivers". They may strive; they may be squeezed. But what both words disguise is their (or our) role as casualties of a global economic system that has managed to cut the link between pay and productivity and can no longer promise upward mobility.

It happened first in the USA. Median wages for male workers there showed a slight decrease between 1973 and 2010, and now Britain is following a similar pattern. Median earnings for British men fell between 2003 and 2008, while the country's GDP grew by 11%, and the earnings of the top 1% rose irresistibly. According to Sophia Parker, an associate of the Resolution Foundation, "the fate of everyday Americans should be understood as a wake-up call for Britain … the crisis [of living standards] now needs to be the driving force of UK politics".

The quote comes from a book edited by Parker called The Squeezed Middle: The Pressure on Ordinary Workers in America and Britain, which was published this week and honoured with a seminar at the foundation in Savile Row. I went along and found lovely offices decorated with what looked to be paintings from the Soviet realist school. The usual things happened – nice things. Coffee was served, four speakers spoke informatively, questions were invited and asked from an audience that, by a show of hands, showed itself divided between the private and public sectors and other thinktanks.

It occurred to me that the squeezed middle itself was absent, and that finding a representative of it here, among the china cups and the Russian kitsch, would be like meeting an African in Mrs Jellyby's parlour. But then a gradual decline in living standards isn't easily recognised, and many of us in the audience might have been heading in that direction.

The name itself shields us from the fact. "Squeezed middle" is far too cuddly a term for the damage being done to British and American wages by changes in global trade, and the lack of any serious political challenge to free-market theology. Perhaps nobody will suffer as they did in the 1930s, but the changes to our circumstances will almost certainly be more permanent.