How would you answer the following question?
Which of these phrases would you say comes closest to your feelings about your household's income these days? Living comfortably, coping, finding it difficult to manage, or finding it very difficult to manage on present income. Excluding those who responded 'don't know' or who did not answer, the typical response to such a question, as recorded over the course of about two decades, has not been that positive (1).
On average around a fifth of the population (21 per cent) routinely find it either 'difficult' or 'very difficult' to get by on their income. This proportion varies between affluent countries and over time. There is no rule set in stone that it should be a fifth, but it is a fifth on average. This particular proportion is the figure for the United Kingdom; the proportion is much higher in the United States, and much lower in Japan. International statistics are hard to compare as language and meaning vary so greatly. Finding it 'difficult to manage' is a very British euphemism for not managing. Those doing better than this, almost half the population in Britain (48 per cent), describe themselves as only just 'coping'!
In recent decades less than a third (31 per cent) of people in households in Britain described themselves as 'living comfortably', and all this before the crash of 2008. In all affluent countries governments do not like to admit how hard most households find it to get by. Members of the governing party in Britain have taken great pride in pointing out how, just before the financial fall, the share who appeared to be finding managing most difficult was falling, and the number of those who said they were living comfortably was rising (Dorling, 2007). The figures just given were released in 2006 in the official publication of Britain's Office for National Statistics, Social Trends (ONS, 2006).
The following year Social Trends 37 showed how those gains had been achieved by borrowing; total lending in Britain had, we later found out, peaked in 2004 (ONS, 2007, Figure 6.13). Personal insolvencies were rising exponentially by 2004 (ONS, 2007, Figure 6.14). The next year Social Trends 38 revealed that even the wealthiest, those who had property they could borrow against, the bulk of the 'comfortable', had been getting that little extra and managing to be comfortable mostly by borrowing yet more money against their property. This was then called 'equity withdrawal' and it was responsible for over 8 per cent of all personal income in Britain by 2004 (ONS, 2008, Figure 6.14). Again the peak had been in 2004, but it was not obvious until 2008 that even the minority who were a little wealthy had been increasing their borrowing to maintain their comfortable lifestyle. In hindsight even the minority who said they were living comfortably were increasingly only living comfortably partly on tick.
People who read journals such as Renewal know the story well now. They know how the British Chancellor of the Exchequer was surprised to pick up a copy of the Financial Times while on holiday in late August 2008 and read that the European Central Bank had begun what amounted to panic measures to try to curtail the crash (Johnson, 2009). They know that just five months later, in mid January 2009, an unnamed member of the British Government's Cabinet, with apparently a little economic savvy, was reported to announce: 'The banks are fucked, we're fucked, the country's fucked' (Wintour, 2009).
They read here that in the 1970s labour's share of output had been much greater following decades of, on aggregate, successful union organisation, but that gain was then lost over the subsequent decades (White, 2008). They know that the United States medium wage of full-time workers fell in absolute terms from 2001 to 2004 by $7 a week (or by about 1 per cent) and that it was debt which was used by people to make up for real falls in income and a decline in the proportion of GDP going to wages (Turner, 2008). Most now accept how bad it was that we were living this way. But what made all that debt so necessary was modern indentured labour, and that indenture, and the prejudice which justified it, we have yet to address.
Borrowing money to maintain a comfortable lifestyle is far from good, but a comfortable lifestyle is not even imaginable by those who are finding it difficult or very difficult to get by, those who are doing worse than just coping. For the fifth of the population that are not managing, debt is and has been a necessity to keep going. It is this fifth who have the fewest real choices in life in Britain and similar countries. They have few choices over what kind of work they do; they take any job they can get. Having to work at a job that you do not choose to do is as demoralising as being formally indentured to labour for a fixed term to pay off debts, although in the later case at least the term of indenture tended to be known. In the past indentured labour was often reserved for people thought of as being of a different racial group to those who employed them. Today we tolerate a similar type of indenture, and fear it enough for the affluent among us to also have to seek debt to avoid appearing to be like those who might fear indenture.
I believe that despite all that we know, we tolerate modern indenture, the state of having no choice over toil, because enough of us still see others as sufficiently different, akin to racially different, that we do not see that for a fifth of the population to be failing to manage is unjust, or that it is unnecessary to have nearly a majority who are only coping. All these proportions are about life in the supposedly good times before the 2008 crash. Those times were mostly only a good life for a very small minority.
Being unable to manage in...