The Rise of the Middle Class: History & Impact
Explore the history of the middle class, its significant rise, and the ongoing discussions about whether the middle class is slowly being replaced. Understand the class system and its implications on society.
FINANCIALGENERAL
4/3/20268 min read
What Is the Middle Class? A Historical and Modern Perspective on Class, Living Standards, and Rights
The idea of the “middle class” is one of the most discussed and often misunderstood concepts in modern society. It is invoked in political speeches, economic policy debates, and everyday conversations about living standards, opportunity, and fairness. Yet defining the middle class is not straightforward. Is it about income? Occupation? Education? Lifestyle? Or a sense of security and stability?
To understand what the middle class truly is, we need to examine how it has evolved over time. This means looking at the class system before the First World War, tracing its transformation through the 20th century, and assessing where things stand today. Along the way, we must consider how earnings compare with housing costs, when people gained the right to vote, and whether living standards and rights are improving or declining today.
The hit British TV series ‘Peaky Blinders’, starring Gillian Murphy, was set in the UK's second city, Birmingham, at the end of the First World War (1918). Life was very different 100 years ago; you had the working class and the landed gentry. The series tells the story of a group of brothers and friends who grew up together, fought together in Flanders (Northern Belgium), and witnessed many deaths. Considering themselves already dead after surviving the brutal war, they had nothing to lose by entering a violent life of crime, which eventually saw Gillian Murphy’s character ‘Tommy Shelby’ move from working class to landed gentry and become a member of Parliament. Or from gangster to government!
Watching this series makes you realise how hard life was 100 years ago, no social security, limited medical help unless you could pay. No mobile phones, computers, safe spaces, job security, food security, or home ownership for the ordinary working person. In the UK, women did not get the right to vote until 1918-1928. In the USA, the 19th Amendment to the Constitution allowed some women to vote in 1920 (with restrictions). Generally, in Europe, women could vote in some countries from 1906 and in others from 1971.
Understanding our history and how free we are in today’s modern world is important to ensuring we do not slip back into those hard, restrictive times.
Defining the Middle Class
At its simplest, the middle class sits between the working class and the upper class. Historically, it has included professionals, small business owners, clerks, teachers, and skilled workers, people who are neither wealthy elites nor manual labourers struggling at subsistence levels.
However, the definition has shifted over time. In the early 20th century, being middle class was often tied to occupation and social status rather than income alone. Today, income thresholds are more commonly used, but even these vary widely by country and cost of living.
A more meaningful definition might include a combination of factors:
Stable income above basic needs.
Access to education.
Ability to own property or accumulate savings.
A degree of economic security.
Participation in civic and political life.
With this framework in mind, we can explore how the middle class has changed.
The Class System Before the First World War
Before the First World War (1914–1918), society in many countries, especially in Europe, was rigidly stratified. Class divisions were deeply entrenched and often tied to birth.
The Upper Class
The upper class consisted of aristocrats, landowners, and industrial magnates. Wealth was concentrated in land ownership and inherited fortunes. Political power was largely concentrated in this group, which dominated government institutions.
The Working Class
The working class included factory workers, agricultural labourers, and servants. Many lived in poverty, with long working hours, low wages, and minimal protections. Housing conditions were often overcrowded and unsanitary.
The Emerging Middle Class
The middle class was relatively small but growing. It included merchants, professionals (such as doctors and lawyers), and clerical workers. This group benefited from industrialisation and urbanisation, which created new job opportunities.
However, the middle class before WWI did not enjoy the same level of security or political influence as it would later. Social mobility was limited, and many middle-class families were only one financial setback away from hardship.
Earnings, Housing, and Living Standards Before WWI
To understand living standards, it is essential to compare earnings with housing costs.
Wages
In the early 1900s, wages for most workers were low. Even skilled workers often earned just enough to cover basic needs. Middle-class incomes were higher, but not dramatically so, compared to today’s standards.
Housing Costs
Housing was relatively cheap in absolute terms but expensive relative to income. Many working-class families spent a large portion of their wages on rent. Homeownership was rare outside the upper classes.
Middle-class families were more likely to rent larger homes or own property, but this was still a significant financial burden. Mortgages were less accessible, and credit systems were underdeveloped.
Quality of Life
Living standards were generally low by modern standards:
Limited access to healthcare.
Poor sanitation in urban areas.
Little job security.
No welfare state.
For the middle class, life was more comfortable but still far from the security many associate with the term today.
The Expansion of Voting Rights
One of the most significant differences between pre-WWI society and today is political participation.
Before WWI
Voting rights were restricted in many countries:
Often limited to men.
Frequently tied to property ownership or wealth.
Excluded most of the working class and many middle-class individuals.
Early 20th Century Reforms
The early 20th century saw major changes:
Expansion of male suffrage (right to vote).
Women gradually gained the right to vote (in many countries between 1918 and 1971)
Removal of property requirements.
These reforms were crucial in empowering the middle class and working class, giving them a voice in shaping economic and social policy.
The Interwar Period and the Rise of the Middle Class
Between the two World Wars, the middle class grew in size and influence.
Economic Changes
Industrialisation continued, and new industries emerged. White-collar jobs expanded, creating more opportunities for middle-class employment.
Social Mobility
Education became more accessible, allowing more people to enter professional occupations. This contributed to upward mobility.
Challenges
This period was also marked by instability:
The Great Depression (1929-1939) led to mass unemployment.
Many middle-class families lost savings and property.
Economic insecurity remained a defining feature.
However, the Great Depression created new industries such as aviation, Oil, and property, and many new millionaires. There’s always an opportunity!
The Post-World War II Boom: The Golden Age of the Middle Class
The decades following World War II are often seen as the high point of middle-class prosperity.
Rising Incomes
Economic growth was strong in many countries. Wages increased steadily, and productivity gains were shared more evenly across society.
Affordable Housing
One of the most striking features of this period was the relationship between earnings and housing costs:
House prices were relatively low compared to incomes.
In many countries, a single income could support a family and buy a home.
Mortgages became more accessible.
For example, in the mid-20th century, house prices were often around 3–5 times the average annual salary. This made homeownership achievable for a large portion of the population.
Welfare States and Public Services
Governments expanded social safety nets:
Universal healthcare is available in some countries.
Public education systems.
Unemployment benefits and pensions.
These policies reduced economic risk and strengthened the middle class.
Expansion of Rights
Civil rights movements and democratic reforms further expanded participation and equality:
Greater inclusion of women and minorities.
Strengthened labour rights.
Increased political engagement.
Late 20th Century Changes: Stability and Early Warning Signs
From the 1970s onward, changes emerged that would reshape the middle class.
Slowing Wage Growth
While economies continued to grow, wage increases slowed, particularly for middle-income earners. Income inequality began to rise.
Housing Costs Begin to Climb
House prices started to increase faster than wages in many regions. While still affordable compared to today, the gap was widening.
Shift in Employment
Manufacturing jobs declined, and service-sector employment grew. This shift created new opportunities but also introduced greater job insecurity.
The 21st Century: Pressures on the Middle Class
In recent decades, the middle class has faced increasing challenges.
Earnings vs. Housing
One of the most significant issues today is the disconnect between wages and housing costs:
In many countries, house prices are now 8–12 times average annual incomes (or more in major cities).
Rent has also risen sharply, consuming a larger share of income.
Homeownership is increasingly out of reach for younger generations.
This contrasts sharply with the post-war period, when housing was far more affordable relative to earnings.
Job Security and the Gig Economy
The nature of work has changed:
More temporary and contract-based jobs.
Growth of the gig economy.
Less job security and fewer benefits.
Middle-class stability, once defined by long-term employment, has become less certain.
Cost of Living
In addition to housing, other costs have risen:
Education.
Healthcare (in some countries).
Childcare.
These expenses place additional strain on middle-class households.
Rights and Political Participation Today
In terms of formal rights, there has been significant progress since the early 20th century:
Universal suffrage is now the norm in democratic countries.
Legal protections for workers and minorities have expanded.
However, some argue that the quality of participation has changed:
Declining voter turnout in some regions.
Perceived lack of influence over political decisions.
Concentration of economic power in large corporations.
This raises questions about whether political rights translate into meaningful influence.
Are Living Standards Declining?
This is a complex question, and the answer depends on how living standards are measured.
Improvements
In many ways, life today is better than in the past:
Longer life expectancy.
Better healthcare and technology.
Greater access to education.
Improved living conditions.
From a purely material perspective, even lower-income households today often have access to goods and services that were unimaginable a century ago.
Challenges
However, there are clear areas of concern:
Housing affordability has worsened significantly.
Economic insecurity has increased.
Wealth inequality has grown.
Younger generations often feel worse off than their parents.
For many, the defining feature of middle-class life, economic security, has weakened.
A Generational Perspective
Comparing generations highlights the changes:
Baby Boomers (Post-WWII Generation, born between 1946-1964)
Benefited from strong economic growth.
Affordable housing.
Stable employment.
Expanding welfare systems.
Generation X (Born between 1965 - 1970), and Millennials (1981-1996)
Faced higher housing costs.
Slower wage growth.
Greater job instability.
Higher levels of debt (especially student loans).
Generation Z (Born between 1997 -2012)
Entering a labour market shaped by uncertainty.
It faces some of the highest housing costs relative to income.
Navigating rapid technological and economic change.
Are Rights Declining?
While formal rights have generally expanded, some observers argue that there are subtle forms of decline:
Economic Power vs Political Power
Economic inequality can translate into unequal political influence, even in democratic systems. For example, big business and wealthy individuals.
Labor Rights
In some regions, union membership has declined, weakening collective bargaining power.
Digital and Surveillance Concerns
Modern technology introduces new questions about privacy and control that did not exist in earlier eras.
Conclusion: The Changing Meaning of the Middle Class
The middle class is not a fixed category; it reflects economic conditions, social structures, and political systems.
Before the First World War, it was a small, relatively insecure group with limited political power. The mid-20th century marked its golden age, with rising incomes, affordable housing, and expanding rights. Today, while material living standards are higher in many respects, the foundations of middle-class security, stable employment, affordable housing, and economic predictability are under strain.
So, are we seeing a decline?
In absolute terms, life has improved. But in relative and structural terms, especially regarding housing affordability, job security, and economic inequality, there are strong arguments that the middle class is facing a period of erosion.
The future of the middle class will depend on how societies respond to these challenges. Policies around housing, wages, education, and social protection will play a crucial role in determining whether the middle class remains a cornerstone of modern life or becomes an increasingly fragile ideal.
During the pandemic and global shutdown (2020), we saw the biggest transfer of wealth from the middle class to the already very wealthy. Only time will tell us whether it was by design or by accident!
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