The Role of the Middle Class in Socioeconomic and Political Development - Coursework Example

The role of the middle in socioeconomic and political development s During the time of its existence, the society has been divided into the particular strata, identified by different factors. The division of the society into high, middle and low classes predetermined the economic and political stability of the world. These harmoniously functioning strata underwent different changes during the period of states development. Consequently, the qualities of these classes changed with the span of time. Discussing the questions of social strata, one clearly understands the advantages of the high social level and the disadvantages of the low-social class. However, the question of positive and negative factors of the existence of the middle class and its influence on the world’s economic and political situation is still under discussion. The aim of this work is to analyze the role of the middle class in socioeconomic and political development. The middle class is a social group of people without sustainable income sufficient to meet a wide range of material and social needs. Resources available to the middle class are sufficient to provide the "decent" quality of life. Due to this fact, the middle strata have a higher social stability on the governmental level. At the beginning of the XX century the middle class mostly consisted of small entrepreneurs. However, later the developed countries experienced an increase in the living standards of skilled workers, who were also attributed to the middle class. Typically, in Western society the main objective criteria for selection of the middle class were represented by the level of education and income, standards of consumption, possession of material or intellectual property, as well as the ability of the residents for highly qualified work. In addition to these objective criteria, an important role in the identification of social class played the subjective perception of the person of his position on the social level. In modern sociology there are two main approaches for the identification of the middle class: objective (an approach based on the level of material well-being), subjective (based on self-identity of the people of the middle class). These approaches are associated with the notion of the middle class as a mass social subject, which is characterized by a relatively high standard of living and level of consumption. The rate of material well-being is composed of the following indicators: the possession of a specific set of expensive property (car, housing and so forth); an opportunity to get paid social services (education, health); the ability to travel the world (travel abroad on holiday). The typical representative of the rapid growth of the middle class nowadays is China. This country has achieved a world-wide recognition due to the highly developed technologies, but it still has strong fluctuations on the social level. People of middle-income countries, such as China represent the intermediate layer of the society between rich and poor. People with average incomes are the main consumers, but a slow increase in the number of people with average incomes to some extent limits the effectiveness of expanding consumption. According to the opinion of the scientific institutions, the middle class in China comprises 240 million people, which is approximately 23% of the population. Earlier, the Ministry of Finance of China reported that after the tax threshold rose to 3,500 yuan, the number of taxpayers was reduced from 84 to 24 million people. In Beijing, Shanghai, Guangzhou, Shenzhen and other major cities, a lot of people of middle-income class are forced to take care of the elderly parents, educate their children, and repay the loan for their apartments, so they have long been related to a "pseudo-middle class". According to the research report published by the Euromonitor International Company, by 2020 the number of people of the middle class in China will reach 700 million, whose annual income will comprise 80 million yuan. On this occasion, a lot of people considered that they attributed to the "middle class". The reasons for such a reference are quite different. For example, today because of the unstable conditions of the economy, people who do not have a single apartment and place of residence are difficult to call the middle class. However, those who have their own housing are involved in huge debts. The people with such unstable living conditions do not satisfy the requirements, referred to the middle class. Speaking about the concept of the middle stratum of China, in comparison with other countries, it does not differ significantly. If any person can be a representative of the middle class, the phenomenon will have a negative impact on the political and economic stability. In other words, if the number of representatives of the middle layer is increased by unscientific methods, it will not be beneficial to the promotion of state and government policies that will contribute to the development of the middle class. However, it also will not have a positive impact on the application of more effective measures to curb the inflation, and in the end, it will not stimulate the development and increase of the middle class. The expansion of the middle layer is an irreversible trend of social development. If the social structure will be widened, it means that the number of rich and poor will be relatively small, and the middle class will state the majority. Consequently, the society will be more stable, pragmatic and rational. In such circumstances, it will be easier to build a fair political and economic system. In this regard, the state must support the development of the middle class by policy measures, constantly increase the number of representatives of the middle-income and contribute to the formation of the social structure in the form of the main stratum of the society. In this regard, China has to solve the problems of poverty by raising the income of its residents and expanding the level of the middle class among the whole territory of the country. The reasons for the accelerated growth of the middle class in China in recent years were predetermined by different factors. First, the structure of employment develops mostly in relation to the high class. Secondly, the steady and rapid economic growth has accelerated the accumulation of wealth as a result there was a rapid increase in the group with a high level of income. Third, the rapid development of domestic capital markets in recent years has enabled the citizens to share the achievements of economic development through investment and capital markets, which contributed to the intensification of the effect of wealth differentiation. At the same time there was a rapid growth in the real estate market and a sharp rise in the price of commercial housing, which consequently greatly increased the value of the wealth of those who invested in property and owned it. Fourth, the advanced admission to universities did not only provide millions of people with the opportunity to pursue the higher education, but also gradually increased the chances for their social mobility. Every year, millions of highly qualified college graduates become the reserve forces to the expansion of the ranks of the middle class. Globalization of the middle class is a new phenomenon in the history of the world, which requires special attention, as it has already begun to influence the political processes in different countries. The consequences of the globalization of the world economy lead to a redistribution of the recourses. The rise of the middle class is very important for the global economy and international corporations, because it is a major source of new customers and demand. The analysts of the international consulting company “McKinsey” believe that by 2022, 76 percent of the salary of urban households in China will reach the level of the middle class. Comparing these data with the previous results, one can see that in 2000, only 4 percent of Chinas families belonged to this category of the society. The rapid growing of the middle class level has a positive impact on the development of Chinese economy. The annual income of the families, which introduce the middle segment of the society in 10 years, will grow from 60 to 229 thousand yuan, which means that in the purchasing parity, China will reach the level of Brazil and Italy. In this case, if earlier the annual income of 106 - 229 thousand yuan was considered the prerogative of the wealthiest families of the middle class, in future, such salaries will be available for the majority of people in China. The members of “McKinsey” believe that by 2020, 35 percent of the total consumption in China will have a generation of Chinese born in the 80s. The entertainment industry, tourism and area of private services will operate mainly on them. However, the latest researches indicate that the income of young Chinese suffer from problems with employment. Complex employment situation also undermines the confidence of young people in their future. “McKinsey” believes that the situation can be improved by the development of Chinas small and medium enterprises, as they will be able to hire a larger number of people. The temporary situation of the living standards of the middle class in Hong-Kong remains quite tense. The level of income of the average population is not enough for the citizens of the city, even in relation to the prior living standards. The greatest obstacle for their effective functioning in the society is the question of real estate. The prices for the apartment rent are too high in relation to the salary of the average Hong Konger. “Hong Kong’s definition of status usually involves property.  As such, the city may be driven more by the aspiration of a property class than a middle class. Not so much a class even, but more of a barometer, an index, that fluctuates like stock data, continually redefining and re-evaluating one’s place on the property ladder” (Li Tao, 2013). Thus, in Hong Kong the question of property often identifies the class of its inhabitants. According to the statistics of Knight Frank LLP for 2013, the prices for property in Hong Kong increased by 28%. This is the fastest growth of property prices in the world. Young people and students in Hong Kong have the pessimistic attitude as for the current situation in the city. The data of the Security Division of Hong Kong showed that in the first half of 2013 the number of people, who emigrated from Hong Kong, stated 3900 people, which is 8.3% more than the previous year. In response to the growing influx of immigrants from Hong Kong and Macao, Taiwans Ministry announced about the tightening of immigration rules for the residents of Hong Kong and Macau. Hong Kongs middle class experiences too much pressure, because life has become extremely expensive for them. “The high cost of property also has an effect on personal decisions, with 53 per cent of the single respondents saying they would delay their marriage plans to buy time to save more. Nearly half of those who were married also chose to delay having children or to have no children, so they could boost their savings” (Chen, A., 2013). Consequently, the difficult situation of the middle class in Hong Kong has a potential threat for the political and economic life of China, as the majority of its residents move abroad. Thus, it is the government, who must decrease the rate of property prices, in order to save the satisfied level of the middle class within the country. Concluding this article, it is important to state that modern development of the middle class greatly depends on the reforms of the government in relation to it. The importance of the middle strata for the further economic growth and proper functioning of the state processes predetermines the necessity to increase it in number and create the ground for its successful distribution within the state. Hong Kong has negative perspectives as for this process nowadays, due to the rate of inflation in the country. It can lead to the significant losses in the field of consumer rate and highly qualified labor resources of the state. References Chen, A. Hong Kongs middle class most burdened by high housing costs, 2013. Retrieved from: http://www.scmp.com/news/hong-kong/article/1295325/middle-class-most-burdened-high-housing-costs Li, Tao. Middle Class Myths, 2013. Retrieved from: http://epaper.chinadailyasia.com/focus-hk/article-211.html Barton, D. Mapping China’s Middle Class, 2013. Retrieved from: http://www.mckinsey.com/insights/consumer_and_retail/mapping_chinas_middle_class Song, K. Understanding China’s Middle Class, 2009. Retrieved from: http://www.chinabusinessreview.com/understanding-chinas-middle-class/ Sinha, K. Chinas middle class 10 times larger than that in India, 2014. Retrieved from: http://timesofindia.indiatimes.com/world/china/Chinas-middle-class-10-times-larger-than-that-in-India/articleshow/44816063.cms Osnos, E. Will the middle class shake China?, 2013. Retrieved from: http://www.newyorker.com/news/daily-comment/will-the-middle-class-shake-china Goodman, D. China’s middle class may be rising, but not in revolt, 2013. Retrieved from: http://www.scmp.com/comment/insight-opinion/article/1339795/chinas-middle-class-may-be-rising-not-revolt Read More