In the 20th century, the construction of a meritocratic system focused on human capital provided all segments of society with the opportunity to participate in social development. Services became massified and significant expansion was observed, especially within the middle classes. During this period, access to services – from education and health care to transportation – became much easier and more widespread compared to previous eras. Large populations were able to access these services with relative ease. In this period of relatively equal conditions, the middle classes attained a strong position in the labor market, and their share of economic development and level of welfare consistently increased. The meritocratic system based on merit/human capital fulfilled its promise, leading to increased economic and social mobility within societies. In this context, the middle classes, as the main driving force behind the development of societies, also constituted the backbone of nations.
Then, somehow, these dynamics began to change, and the middle classes gradually started to lose the ground they had gained. Across all countries, it is observed that the middle classes, which had expanded and gained significant opportunities after World War II, have weakened in recent times and are increasingly losing their advantages. Although, on the surface, the importance attributed to human capital appears unchanged, the system’s underlying dynamics have started to shift. As the quality of accessible services began to decline and disparities in quality started to widen – meaning the merit-based system underwent a mutation (“mutated meritocracy”) – the system’s relatively egalitarian structure began to deteriorate. Initially, people started losing the jobs they once held, wages began to decline, and, most critically, access to services that enabled social mobility – particularly quality educational institutions – became increasingly unaffordable.
Threats to middle classes
It appears that the main driver of this process has been technological disruptions. Particularly after the 1980s, technological transformations and the spread of automation began to eliminate job positions exposed to automation, while continuously raising the skill expectations for new jobs. In recent years, the strengthening of automation by artificial intelligence technologies has accelerated this process even further. The middle classes are increasingly being forced either to lose their jobs or to work in lower-paid positions. Moreover, the number of people employed in temporary or part-time jobs continues to rise.
The new high-skilled job positions emerging through technological transformations are no longer being filled by the middle classes; instead, they have become accessible only through high-quality education – starting from preschool and continuing through to postgraduate levels – that only the wealthy can afford. In other words, the link between high-quality education and high-paying, high-skilled jobs has significantly strengthened. The wealthy have now gained the advantage of transmitting their privileges to future generations through education. Moreover, factors such as marriage patterns increasingly based on educational attainment, and the wealthy’s efforts to protect and even enhance their advantages through lobbying and political interventions, have further reinforced this connection and deepened income inequality within societies. For example, in the United States, between 1970 and 2021, the middle class’s share of total income fell from 62% to 42%, while the share of the lower-income class dropped from 10% to 8%, and the total income of those included in the high-income group rose from 29% to 50%.
Moreover, the aggressive efforts of the segments receiving a large share of income to continuously enhance the quality of all services have further segmented access to services, widened quality gaps, and continuously increased the cost of access. As the middle classes lose the advantages they once held in the labor market, they can no longer afford high-quality services that would enable them to break out of the cycle, and ultimately, they are losing out in the increasingly fierce competition.
On the other hand, with China’s entry into the global economy from the 1980s onward, the effects of this process began to be felt even more deeply. As automation spread and the middle classes lost their status, they also began to lose the sectors in which they worked due to China’s increasing export capacity. This is because the bulk of China’s exports consist of manufactured goods, while its imports are largely composed of raw materials, that is, unprocessed products, as revealed by Fatih Oktay in “China and the Future of the World.” Consequently, imports from China by the U.S. and other European countries, which run trade deficits with China, have directly and negatively affected employment. For example, when the Trans-Pacific Partnership Agreement was signed in 2016 to restrict China’s growing dominant role in the world economy, then-U.S. President Barack Obama emphasized in his speech that this agreement was critical for protecting America’s middle class: “Right now, China wants to write the rules of trade in Asia. We can’t allow that. We should write the rules, and we should level the playing field for our middle class,” as Oktay revealed in his book.
In short, while the middle classes were already being forced into lower-paid jobs within their own countries due to technological transformations and the spread of automation, the negative impact was further deepened by imports from China. Moreover, the increasing competition in the global labor market has led to a shift of investments toward countries offering lower costs. Consequently, a massive wave of competition, against which the middle classes cannot effectively compete, has emerged.
These findings not only point to problems within American society; similar issues are being experienced, to varying degrees, in most European countries as well. In these countries, as an increasing share of income and wealth flows to the top groups, the middle classes are shrinking, continuously losing ground, and gradually losing their hopes for the future. Therefore, the political turbulence in these countries is nothing more than a reflection of the growing permanence of these deep-rooted problems. As these nations lose the advantages they once achieved through their strong middle classes, they are also confronting the political consequences triggered by this process. Thus, it is increasingly observed that populist leaders – who translate the story of this ongoing process, namely the impoverishment of the masses and the weakening of their integration with their societies, into political language, and who offer pragmatic solutions, including xenophobia – are more frequently coming to power.
We must take action now
Societies with a strong middle class tend to be much more hopeful and resilient. In an OECD report published in 2019, the benefits of a strong middle class are highlighted, stating that “societies with a strong middle class have lower crime rates, higher levels of trust and life satisfaction, greater political stability and better governance.”
As the process that shrinks the middle classes deepens economic inequalities, societies are increasingly being divided into just two groups: a small upper class and a large lower class. While the vast majority of wealth becomes concentrated at the top, the masses are becoming impoverished. Income distributions are deteriorating and skewing in favor of the upper classes. As income distribution worsens, access to all services also becomes increasingly asymmetric. A structure emerges in which the few possess much and the many possess little. In other words, what is accessed no longer follows a normal distribution but instead follows a power law distribution. In a normal distribution, large masses are located near the center, whereas under a power distribution, the masses are pushed toward the extremes.
Power law distributions are also known as fat-tailed distributions. The defining feature of such distributions is their extremely high variance. In other words, asymmetry is very pronounced, and the few receive disproportionately more. Therefore, the power law is inherently unjust. In fact, the deviation from the normal distribution was identified long ago by the renowned sociologist Robert Merton (1968) through a mechanism he developed based on a verse from the Gospel of Matthew, which he termed the “Matthew Effect.” According to this mechanism, small differences in all fields are amplified over time, and advantage continuously breeds further advantage, leading to an accumulation of benefits.
The deepening of inequalities is also giving rise to indirect effects. For example, the middle classes, which contribute the most to a society’s demographic renewal, are increasingly trying to secure themselves, leading – along with other contributing factors – to declining population growth rates in these countries. Marriages are being postponed to later ages, and moreover, divorce rates within existing marriages are also rising. As a result, the proportion of young people in societies is decreasing while the elderly population is growing, putting economic growth at risk. Furthermore, it is becoming increasingly difficult for the shrinking younger population to be integrated into employment. Vertical social mobility is weakening, and social unrest is on the rise. In short, as the middle class weakens, societies as a whole enter a negative cycle that puts all of their long-term advantages at risk.
In summary, the process that is eroding the middle classes and undermining politics – primarily in the U.S. and continental European countries – also poses a risk for Türkiye due to globalization. Despite the comprehensive steps recently taken to strengthen the middle class, we must be aware of this threat, which has deeply affected other countries, and prepare for it now. Social policies that reinforce the middle class will not only eliminate societal and political problems but will also ensure that a society remains healthy in the long term and enhance its resilience against external shocks.