Sunday, 23 November 2014

Poland’s middle class

A quarter of century elapsed since the break-up of the Soviet bloc and subsequent free-market reforms in Poland. Needless to say, such period of time is well too short for a society to undergo radical changes, however more than enough to relinquish the paradigm of equality in favour of more stratified society. In countries who have been sticking to free-market economy for centuries, the split of society into classes is natural. In Poland, sternly mangled by the history (lame country after WW2, imperfect before WW2, 123 years of being wiped off the map before WW1 and falling apart, malfunctioning state before partitions), the indispensable part of a Western society, the middle class is still nascent. It will take years before it emerges as an established social strata; but while it is in the making, I suppose it is worthwhile to have a look at determinants of belonging to the middle class in Poland.

Descent. Unlike in the Anglo-Saxon world, membership to a social class does not run in the genes in and in sparse instances can be put down to heritage. Poles’ ancestors are mostly peasants and workers, hardly ever their origins can be traced back to aristocracy. The ancestry criterion puts Poland well behind many other countries in terms of society formation, yet this backwardness gives room for mobility between social classes.

Education. I would argue an overwhelming majority of those thought to be the representatives of the middle class are holders of university degrees. It does not hurt to note a proper education (consequent to some trouble taken to gain it) is requisite to become a member of the middle class. Unfortunately, with the springing up private universities, equipping their graduates with little knowledge and a diploma in exchange for steep tuition fees, the significance of university degrees has been somewhat debased. Fortunately, the labour market verifies actual competencies of graduates put out by factories of master’s degree holders. In a few years I hope many of those private school will end up closed down. Invisible hands of the labour market are one factor, demographic trends being the other, forcing closures of unviable education businesses. Poland needs more decently trained vocational school leavers with ‘professions in hands’ rather than superfluous possessors of master’s degrees. The former, however, will not form the middle class. Decent university education is the common denominator of almost all representatives of the middle class and may it stay so.

Profession. In the western world middle class is associated with professions which require comprehensive education and several years’ of practice before gaining recognition and esteem, such as doctor, lawyer or professor. Senior managers and outstanding experts, regardless of industry they work in, also rank among the middle class. In some countries that strata covers also high-rank civil servants. In Poland the fledging middle class has two types of representatives: entrepreneurs (sole proprietors or owners of small businesses) and white-collars toiling away in corporations.

Dwelling. In many countries where you live in and the standard of your dwelling determines your status. In Poland, where societal stratification takes place mostly in bigger agglomerations, where the middle class settle down either in newly built housing estates in modern blocks of flats or in more-or-less detached houses sprouting in the suburbs. Since the middle class are still in the phase of struggling to accumulate wealth, their dwellings are burdens with mortgages (often massive) taken out to finance them. Location and size of the dwelling do not matter as much its standard. This might change over time…

Car. If you think a shiny SUV is a distinguishing mark of the middle class, time to realise you’ve been wrong all along. SUVs are characteristic for the new-rich and wives or mistresses of middle-aged fat top dogs. From my observations, many people from middle class buy second-hand compact or premium cars for the equivalent of less than their half-year after-tax salary and then struggle to shell out thousands of zlotys for repairs, as their vehicles turn out not to have been a good buy. But on the other hand not few buy brand new cars, with the intent to take care of them and keep them going for 10 – 15 years, which in my view proves more practical and economical than buying a pig in a poke and citing argument that a brand-new vehicles depreciates by 50% during first three years since driving out of a dealer’s showroom. Why should I care if I plan to sell it after 15 years?

Travels. For the middle class it is not on to stay at home during holidays or longer weekends. Poland is good for longer weekend or if you have small children. Trips around Europe are nothing unusual, so exotic destinations (far Asia, South America) are gaining popularity. What I find disturbing is that many people fly for holidays to lie about on a deck chair next to a hotel swimming pool and do not take trouble to sightsee or familiarise with different cultures. Travels hence seem undertaken to be able to boast to friends where they have been, not to broaden horizons…

Pastime activities. Well… Golf is not a popular sport discipline in Poland, but for people from the middle class loafing about is totally out of fashion. The pursuit of healthy lifestyle is taking it toll on them – they go to swimming pools, gyms, jog, run, cycle. This tendency is beyond all doubt positive, but in some other aspects, Poland lags behind the West. In my view Poles spend too much time roaming around shopping malls. Reading statistics show Poles are far below the old EU average (although the middle class’ contribution is positive anyway), cinemas record high turnout, but theatres or operas are seldom visited. One could only wonder whether high prices for access to ‘high-brow’ culture or lack of interest in it is to blame.

Wealth. The theory of finance sets out the concept of net worth, i.e. one’s assets less liabilities. Oddly enough, some households falling into middle class would report negative worth. In simple words, proceeds from sale of all their goods at their market values would not suffice to repay all their debts. In most instances negative net worth arises from CHF-denominated mortgage loans. Since credit-fuelled property boom of 2006-2008 CHF/PLN rose from little more than 2.00 to 3.50, while property prices declined by 20% - 30% in nominal terms. The upshot is that several representatives of the Polish middle class are stuck for years in their dwellings bought during the property boom, owing banks more than they borrowed, despite repaying loans for a few years. Given the debt-financed nature of consumption pursued by the middle class, its aggregate net worth is still relatively low and wealth is delusory.

Manners. It is what really matters and what probably should be a distinctive feature not only of the upper class, but also of the middle one. Mindful of early stage of formation, one should not expect too much. Aspirants to be a part of the middle class hail from different backgrounds and often are determined to climb the social ladder hurriedly. Socialism apart from numerous drawbacks had one huge advantage – it provided for real chances for social advancement. Children from poor families stood a chance to finish school, go to university to start a better life than their parents led. Today moving upward between social classes poses a bigger challenge, which is natural in the market economy, however by far not as hampered as for instance in the United States. Nevertheless I need to pledge there are moments when I ask myself whether the pace of social advancement can be too fast…

Are there any other features I have (unintentionally) left out? Have my diagnoses fallen out of place? I wonder whether this post sparks off a discussion among readers.

1 comment:

Michael Dembinski said...

The roots of Poland's class system lie in the middle ages; what in England is called the aristocracy would in Poland have been the magnateria; szlachta - too common, too poor. In England, the Lord of the manor would pass over his entire landed estate to his eldest son. The second son would serve in the army, the third in the church and so on. In Poland, Pan Heniek would split his insubstantial holding among his three sons, who'd then divide it among their sons etc. Poland's patchwork of strip farms, so characteristic from the air, is the clue to Poland's class system. Not minions nor serfs - but then neither aristocrats. Fiercely individualistic, self-reliant small-holders of tiny bits of land. The ideal mass from which a true middle class, hard-working, hard-saving and investing its capital, will come from. In a few generations. It will happen.