Poverty represents one extreme of the income inequality continuum. Many of its subthemes are also pertinent, perhaps in a milder form, to the “squeezed middle”.
The “squeezed middle” is less clear-cut than the concept of poverty, and might be more usefully described as “middle-class pain” (O’Brien 2011). Hitherto, the phrase
“middle class” has embraced ordinary people and those with considerably
52 | P a g e comfortable lifestyles. Indeed, in a major study about social class, both types of
middle class - “established” and “technical” - possess “high economic capital”
(Savage et al. 2013, p.12). In contrast, as it has become a more quoted concept (Plunkett 2012), the “squeezed middle” clearly excludes the wealthy, since it implicitly describes a group who have suffered under neoliberal economic systems, especially during the financial crisis (Economist 2014). Instead, it relates to
“employees whose security and relative earnings have suffered in the wake of economic deregulation and globalisation” (Perkins 2015, p.36).
The “squeezed middle” therefore, is largely a political construct, developed primarily to move economic debates beyond the measurement of GDP, to instead acknowledge and examine that while the wealthy may have been largely insulated from the financial crisis, the wages of many millions of others have stagnated.
Former Labour Party leader Ed Miliband adopted the phrase (see O’Brien 2011;
Monaghan 2014), suggesting that it applied to hard working people who are neither rich nor poor. This was further interpreted by the BBC’s Nick Robinson as "pretty much everyone - bar, perhaps, the very poor and the very rich” (BBC 2010). The definition adopted here is that the “squeezed middle”, as a consequence of the
“draconian cutbacks” within the new fiscal landscape (Dittmann et al. 2011), are those “ordinary” citizens who are finding debt more difficult to service, their ability to borrow restricted, their welfare payments cut, their non-essential purchases less possible, and in general, their everyday lives financially challenging (Thomas 2016)2.
Accordingly, this group are described by pollsters Ipsos Mori as representing “the majority of the population”, and containing “more swing voters than any other group” (Woods 2014). Government fortunes, it is claimed, are “umbilically tied” to the British economy and Eurozone (Kenny 2012, p.152). This can be demonstrated for example, by the Conservative Party featuring their economic record as the cornerstone of their successful 2015 General Election campaign (Cushion and Sambrook 2015; Deacon et al. 2015). Moreover, when, in June 2016, U.K citizens voted to leave the European Union, the defeat was sufficiently serious that Prime Minister David Cameron resigned as a consequence. It is clear therefore, that the
2 Since the “squeezed middle” has been defined for the purposes of this research, hereafter it will be quoted without inverted commas.
53 | P a g e middle classes, however stratified, are politically important since without their
support, ruling power is unstable (Bourguignon and Verdier 2000; Dorling 2014).
While the “squeeze” is an international phenomenon (Barbehön and Haus 2015), in the U.S, the middle class are now more prone to economic insecurity (Kendall 2012), as “middle-income Americans have fallen further behind financially in the new century” and “their median wealth (assets minus debts) fell by 28% from 2001 to 2013” (Pew Research Center 2015). Indeed, even if it was ever a realistic proposition to begin with, the “American Dream” is threatened (Ladd and Bowman 1998) to the extent that it “appears to be well and truly broken”, and without heeding the precedent, the U.K “may well witness the decline and fall of the middle class on this side of the Atlantic, too” (Woods 2014). Indeed, the U.S crisis “should be a wakeup call to the U.K policymaking community” (Parker 2013, p.11), and Level 2 Content Analysis examines whether news reports are descriptive, analytical, and prescribe change or remain passive.
Accordingly, this research empirically examines whether coverage attends to the localised problems that interest and concern the squeezed middle, such as house prices, pensions, the cost of borrowing and so on, and whether these issues are viewed thorough their eyes, or from the point of view of corporations and governments with discussions about growth, currency and the wider economy.
Under a public service broadcasting system, it is reasonable to expect that licence fee payers are privileged. There are calls therefore, for public discourse to appeal to
“ordinary people” (Hanley 2009), and that EBF reporting in particular, should reflect the interests of the majority rather investors and corporations (Shaw 2015). While there is an official measurement to determine poverty (see section 3.1), the squeezed income is a nebulous category. However, it is key within this research project, since the category can be reasonably expected to include a large percentage of the audience watching these news bulletins, and those, who, according to normative models of television journalism, the coverage should serve. Table 3.2 shows the emerging themes from extant literature, which are examined in section 3.3.
54 | P a g e Table 3.2 Summary of themes about the squeezed middle and its media coverage.
3.3.1 Factors contributing to the squeeze.
If the squeezed middle is a milder form of poverty, it might be caused by many of the same factors. Notwithstanding such generalisations, even within such a relatively undeveloped field of research, there appears to be a consensus that some specific factors are involved. First, real wages in the U.K have fallen more than in almost all other OECD countries (see, inter alia, Woods 2014; Machin 2015; Resolution Foundation 2015). Figure 3.1 tracks the fluctuations since 2000, and the decline since the beginning of the financial crisis in 2008.
Figure 3.1 Average weekly earnings in the U.K since 2000.
(from Corlett and Gardiner 2015, p.8)
Corlett and Gardiner (2015, p.8) conclude that “with average weekly earnings still more than £25 below their peak it will be some time before pre-crash earnings are restored”. Moreover, “with wages falling and tax credits no longer providing the support they did” many households “face a daily struggle to keep up with the rising
55 | P a g e costs of essentials” (Whittaker 2013). Accordingly, the U.K economy pays “wages too
low to sustain a family” (Plunkett et al. 2014, p.29), and “the real value of the National Minimum Wage has now fallen for five years in a row”. This minimum wage mechanism designed to offer some form of “protection” has therefore deteriorated in terms of its efficacy (Plunkett et al. 2014, p.29).
Machin (2015) asserts that “falling real wages and reduced living standards are one and the same”, however this wage crisis is further amplified when considered alongside a general increase in prices. Even between 2001/2 and 2007/8, when the U.K median income remained stable (MacInnes et al. 2013), the cost of living increased. This is especially pertinent in the case of housing, which inevitably attracts considerable attention since it represents the largest cost for many families. For increasing numbers of people, home ownership is “out of reach” (Wardrip 2013, p.105), especially since 100% mortgages are no longer offered (Whittaker 2013).
Consequently, the deposit for an averagely priced home would take over 40 years to save if potential homebuyers saved 5% of their income (O’Brien 2011) and as a result, many people now live in rented accommodation (Resolution Foundation 2013;
Plunkett at al. 2014).
In addition to more expensive housing, the cost of the traditional “basket of goods”
(Office for National Statistics 2016) embracing many of the elements of modern life such as food, fuel, and energy prices has risen disproportionately (see, inter alia, O’Brien 2011; Niemietz 2012; Resolution Foundation 2013; Plunkett et al. 2014).
Furthermore, unprecedented increases in childcare costs (Plunkett et al. 2014) hamper the aspirations of second earners within families (Resolution Foundation 2013), while university tuition fees have also risen (Brown 2013; Plunkett et al. 2014;
Woods 2014). At the same time, debt is increasingly problematic, especially since the U.K is now “a nation of spenders rather than savers” (Smith-Ramani and Mehta 2013, p.117). For many, solving income/cost deficits with consumer credit is the sole option (Collard and Hayes 2014). In sum, the perfect storm of low wages, inflationary price increases, rising debt and a lack of savings leaves many “vulnerable” to even small financial “shocks” (Resolution Foundation 2013).
3.3.2 Middle class discourses, and media coverage of the squeezed middle.
In their meta review of contemporary middle class discourses in Europe, and Germany in particular, Barbehön and Haus (2015) define the middle class as a focal
56 | P a g e point of concern within various public, media and intellectual debating forums. Such
discourses can also be mapped to the UK; the middle class is variously described as in decline, debilitated, abandoned, targeted, precariously positioned, and generally eroded in terms of prospects. Level 2 Content Analysis examines whether on BBC1 and ITV1 bulletins the middle class are framed as being so disadvantaged.
Champlin and Knoedler (2008) note that from the 1980s, middle class decline was covered by the media, but that this disappeared during late 1990s and 2000s.
Mirroring the causes explained earlier, more recent coverage often focuses on downsized lifestyles, credit problems, education costs, pensions and the cost of care insurance (Kendall 2012). Media coverage of the middle class include notions of the new poor (Devereux 1998; Breen and Devereux 2003) who find their lifestyles suppressed, resonant with the “faded blue collar” framing where the previously prosperous are now more financially stretched (Kendall 2012).
The ways that the media present “class” strongly influence perceptions about inequality and associated issues (Kendal 2012). Middle classes prefer news narratives reflecting cultural and economic elites and stories about the types of lives they aspire to; these are to be found among entertainment, business and military news, and do not challenge hopes of social mobility (Champlin and Knoelder 2008). Media also distort reality, so that the middle classes become fearful of those who have less than they do, rather than blaming those who have more (Mantsios 2005).
By virtue of their middle class, citizens are often shown to be blameless, the inference being that, for example, the achievement of home-ownership should be rewarded (Devereux 1998). Consequently, the middle classes are often shown to be victims (Mantsios 2005) and increasingly vulnerable from corporate downsizing (Kendall 2012). So while the poor are marginalised and subject to narrow media framing, the declining nature of the squeezed middle is emphasised in broad financial terms, embracing the wider economic landscape. In sum, this research examines whether the squeezed middle is prominent within TV news and whether, as Devereux (1998) claims, coverage is connected with calls for government intervention. Their means extending beyond those of the middle class, the wealthy are more likely to be taken notice of than any other social class (Hacker and Pierson
57 | P a g e 2010; Bartels 2008; Mantsios 2005), and this is now the next PIE category to be
considered.
3.4 Wealth.
Almost half of the U.K’s private wealth is concentrated among the wealthiest 10% of the population (Glasgow University Media Group 2010). Even a critic of the prevailing economic system providing such prosperity concedes that society needs
“entrepreneurs, inventions and innovators” (Piketty 2014, p.443). In contrast however, most wealth is inherited (see also Ryan 1994; Piketty 2014) since, as Beckert (2008, p.1) notes, “everyone who owns property leaves it behind”. If wealth therefore, can be presented as either positive or negative, Level 2 Content Analysis seeks to determine the prevailing framing on BBC1 and ITV1 in 2007 and 2014. Table 3.3 summarises the themes identified within extant literature regarding wealth, which are then explored in sections 3.4 and 3.5.
Table 3.3 Summary of themes within literature about wealth and its media coverage.
3.4.1 The impact of increasing high-end remuneration.
High-end executive remuneration is a significant contributor to earned wealth;
banker pay in particular has been especially scrutinised during the financial crisis (Pryce et al. 2011; Whittle and Mueller 2012; Thomas 2016). Numerous stakeholders take an interest in such pay arrangements, particular their size (Crean 2004; Kay and Van Putten 2007), and debate ranges from opinions that high pay is justified (Murphy 1985), to assertions that remuneration levels are “madness” (Loomis 1982). Such remuneration is highly newsworthy, and an inevitable driver of inequality as executive salaries increase faster than wages at the opposite extreme of the continuum. Coverage of such high pay is likely to be a reliable indicator of the way that income inequality is reported, and this research considers whether in a capitalist
58 | P a g e system, the news reports in question take a critical line towards such corporate
affairs, or whether such pay awards are defended. This indeed, is a key variable, since it seems logical and likely that many of those receiving high pay might also, for example, be sanctioning advertising spend on ITV. Alternatively, a public service broadcaster such as the BBC might reasonably be expected to hold those paying and receiving such salaries to account.
Since Plato originally advocated a ratio of 4:1 or 5:1 between the highest and lowest paid (Tilley 2010; Kakabadse et al. 2004), this ratio has increased steadily (see Crystal 1991; Wagner and Minard 1999). It is now measured in the hundreds (see, inter alia, Subramanian and Kawachi 2004; Judge 2010; Wilkinson and Pickett 2010; Dorling 2014), the most extreme examples occurring in the U.S and U.K (Kaplan and Rauh 2009; Bell and Van Reenen 2010; Thomas 2016). Sayer (2014, p.217) for example, notes that the CEO of J.C Penney earns over 1700 times more than the average salary paid to his employees.
In the U.K, research covering the period 1979 - 2012 conclusively shows that top executive salaries increased far faster than average pay and inflation (Atkinson 1997;
Finch 2007; Topham 2013). By 2016, evidence from corporate reports shows that the increases were continuing without restraint (Mongahan 2016). Though they represent only a relatively small percentage of the working population, a disproportionate share in the increase in the top decile3 is accounted for by financial sector employees (Bell and Van Reenen 2010). The leitmotif of “excess”
predominates remuneration scholarship (Lissy and Morgenstern 1994; Brown 1992).
This is particularly pertinent during “austerity”, since many people find their lifestyles compromised, while seemingly executive remuneration awards are not subject to any form of constraint (Gómez-Mejia and Wiseman 1997: McCall 2013).
The rewarding of substandard performance unsurprisingly causes angst (see, inter alia, Brown 1992; Conyon and Leech 1993; Lissy and Morgenstern 1994; Perkins 2009), as does the way remuneration packages are “camouflaged” (Bebchuk and Fried 2004; Bolton et al. 2006; Kay and Van Putten 2007; Weisbach 2007). Indeed, as executives have become skilled at setting their own pay, basic salaries are a diminishing element (Piketty and Saez 2006; Bell and Van Reenen 2010), and
3 The top 10% of earners.
59 | P a g e elements such as bonuses, stock options and pensions (Dymond and Murlis 2008)
now account for large percentages of total remuneration packages.
The relationships between remuneration committees and the executives whose pay they are setting are charged with being symbiotic and collusive (see, inter alia, Crystal 1992; Lambert et al. 1993; Main et al. 1995; Bolton et al. 2006; Gregory-Smith 2012).
Pay-setting processes serve executives but not others (Crystal 1992; Jensen and Murphy 2004; Farmer et al. 2013), and corporate governance is undermined since CEOs in particular, are so powerful (Main et al. 1995). Under intensified scrutiny, and against a backdrop of increasing inequality and poverty, and discourses of greed and clandestine self-serving (Dorling 2014), these salaries will inevitably require justification. While legitimation is essential for organisational credibility (Main et al.
1995), such credibility is nonetheless extremely difficult to maintain (Elsbach and Sutton 1992). TV news reports therefore, might frame corporate actions as justified and credible, or greedy and unethical.
One possible justification offered by social actors in news reports, and wholly resonant with free-market principles, is that remuneration is driven by supply and demand (Finkelstein and Hambrick 1996; Gomez-Mejia and Wiseman 1997). Another is that remuneration levels and recruitment must be considered through a global prism (Hampel 1998; Conyon and Murphy 2000; Tan and Crombie 2011) as the “war for executive talent” represents a preoccupation for large organisations (Chambers et al. 1998). In reality however, there is compelling evidence indicating that the cross-border recruitment of executive staff is rare (High Pay Centre 2013).
Other options available to social actors attempting to justify high pay in news reports include notions that executive roles require unusually high commitment, sacrifice (Smith 2007; Takala and Aaltio 2007) and longer hours (Reynolds 2006; Gwartney et al. 2011). Furthermore, and contextualising these high salaries in relation to wider corporate budgets, in reality they may be no greater than expenditure on stationary (Smith 2007) and charitable donations (Perkins 2009). A further possible justification for large executive remuneration is “tournament theory” (Lazar and Rosen 1981), where the income gap between senior managers and those below them is purposely wide to provide incentive and motivation (see Lloyd 2010). As a consequence, junior colleagues aspire to the salaries paid to more senior colleagues, and increase their
60 | P a g e effort and performance accordingly (Bell and Van Reenen 2010; Rosen 1981). In such
a case, critics might conclude that executive focus is on personal advancement rather than job performance. If social actors are indeed shown to defend and justify prevailing remuneration practices, this research examines whether such established arguments are used, if the financial crisis has shaped new forms of justification, or if they have been abandoned entirely.