In every society, you often hear some group of people being referred to as the middle class, and you must have wondered why. In a social system, the term “middle class” is used to refer to the group of people who are in the middle according to social status, income and education. This is determined based on a social hierarchy using occupation and other measures. These groups of people can be found to be in the middle; that is, they are found between the working class and upper class of people within the society or social system.
In today’s piece, we shall discuss why those people are referred to as the middle class. Most importantly, we will be considering why they are not growing financially.
Stagnant income
The majority of the middle class suffers from a stagnant income. They have only one source of revenue compared to the upper class, who have multiple streams. When there is a long period of no increase in the income of people within an economy, we can term it “stagnation” of income. A growth recession causes this, and it is sometimes a temporary condition.
When there is a growth recession, the economy can grow, but at a prolonged rate, which makes it unnoticeable. During this period, even when people are working, their income will still be the same. This makes it challenging to meet up with their expenditure. When the economy is performing below its potential, it affects the middle class more, and it prevents them from growing their money.
A decline in employment and wages
When there is a decline in employment opportunities and wages, this affects workers. Most of these people are the sole bread-winner in their families. This makes it challenging for them to provide for their families. Occupational decline is a serious issue that cannot be overlooked because of its negative effect on society.
When there is a rising unemployment problem within a society, there will be a decline in the health of those affected because they will be psychologically disturbed. Some people lose their homes as soon as they become unemployed, while others suffer depression. Many people will be willing to accept little pay for a job they would have charged more. With an increasing number of employed, there will be a massive reduction in the payment of wages.
Even those employed in an organisation suffer from this when the company stops performing well. They reduce the wage of employees, or they reduce the number of staff and render them jobless. Some organisations stop giving employees health insurance and other benefits. With an increased workload, reduced wages and little or no employee benefits, the middle class will be willing to work. This prevents them from growing financially. All they struggle for at that stage is to keep up with making a living.
High cost of living
With a rise in the cost of living, the middle class are struggling to meet their standard of living. The wages of the middle class are barely enough to meet their basic needs due to a rise in the cost of goods and services. The cost of housing prevents many individuals from having a savings account. This is because they spend most of what is earned on catering for their shelter. How then can this class of people meet up with the upper class? The increased cost of living has affected many citizens mentally, and as a result, they continue to experience financial difficulty.
Lack of planning
Lack of planningWhen you don’t plan, you automatically and unconsciously sign up for failure. Even if you don’t belong to the upper class in your society, you need to plan for things to happen your way. This helps to reduce risk and uncertainty. This is one of the basic principles of management because it allows you to have an expected outcome from your effort. To survive in any economy, you must go through the goal-setting process. You cannot live each day randomly; you have to plan how you can progress from one social class to another.
Inflation
This is one of the significant problems experienced by everyone living in a country. However, the upper class can curb inflation by investing in different options such as stocks, bonds, mutual funds and more. Inflation has created difficulty in people’s lives because there is a continuous increase in the price of goods and services. The middle class earn little compared to how much those items cost.
BONUS
How do you live and survive in an economy with rising inflation?
There are many ways you can survive in an economy with a constant increase in the prices of commodities. One of such ways is to ensure that you have a monthly budget before going grocery shopping. And when you are at, don’t buy things on impulse (those are things not on your list of items to be purchased).
As much as possible, you need to live below your means. This will prevent you from credit card debt. Bad debt causes different health challenges; therefore, it must be avoided. Finally, as little as possible, saving is encouraged. Save the little that you can monthly and research any investment option. You don’t have to wait until you have it all. Begin with the little that you can and navigate your way to the top (upper class) from there.
To change your narrative, you need to understand how money works. Money is a tool you can use to earn more. You need to invest in knowledge and discover how it works. To be financially stable, you must find a way out of your present situation.
I hope you gained one or two things from this post. If you do, please, like, share and leave a comment below. You can check out also these related posts such as “Money Saving Tips During Inflation“.
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Very well explained🙌