‘Middle class’ disappears as a result of the Fourth Revolution. In this post we will try to describe the society issues we are facing with the disappearance of ‘middle class’ and how we can resolve them. In a next post we will examine the consequences of this event from an individual perspective.
As ‘middle class’ shrinks the outcome will be a higher inequality, which will result in a higher number of people having a lesser and less secure income. This might result in significant social imbalance that needs to be resolved for our societies to enjoy harmony. If not managed carefully, in particular in our democratic societies, it could be the source of significant social troubles, which could create a very difficult transition. Also, from the economy perspective, a lot of our traditional economy still depends on massive consumption and investment (for example in real estate) by middle class; if that was to falter, the entire economy could be jeopardized, at least temporarily, or have to undergo a dramatic shift with widespread consequences.
How is it then possible to maintain sufficient buying power for a large proportion of people, as well as sufficient visibility and stability as to future income? Possible collective solutions include:
- Redistribution policies, which could include a minimum guaranteed income for everybody or a negative tax system,
- Income security schemes between employment periods (funded by fees paid during employment),
- Comprehensive social security schemes.
One of the major issues is that these collective systems need to be governed carefully, and require sufficient financing. This financing will depend on a newly established taxation system where the value from the creativity of the Collective Age will need to be taxed adequately so as not to stifle the economy, and in a fair manner. This is the most pressing issue to be resolved today.
