Characteristics of the Lower-Class Society: Do You Belong?
The structure of economic class in society is often a hot topic that sparks lengthy discussions. Amid the dynamics of inflation, the spectre of weakening purchasing power, and the trend of layoffs, the boundary between the middle class and the lower class is becoming increasingly thin. Many people feel they are in the safe zone of the ‘middle class’, when in reality, their financial position has already shifted to the bottom layer. Citing a GoBankingRates report, sociological and financial boundaries can actually be measured through indicators of daily activity.
So, how do you identify it? Here are 5 main characteristics of the lower or lower-middle class that you should examine to reflect on the current state of your wallet:
- Decent Housing Becomes a Luxury
Housing is one of the largest expenditure components for every family. For the lower class, owning or even simply renting a comfortable, safe home in a decent environment is a heavy challenge. If most of your income is spent just to pay for a mediocre rented room, or you are forced to live in an environment with minimal access to sanitation and security due to limited funds, this is a strong indicator that you are in the lower economic segment.
- Vulnerable Employment Without Security
The characteristics of the lower class are often reflected in income stability. The majority of this group works in the informal sector, part-time jobs, or as casual daily labourers with no certainty of monthly income. In addition to being vulnerable to the risk of instant dismissal, jobs in this sector are generally not equipped with adequate social security facilities, such as private health insurance, employment social security (BPJS Ketenagakerjaan), and other benefits commonly enjoyed by upper-middle-class workers.
- Absence of Savings and Investment Plans
Saving and investing are the main foundations for building long-term wealth as well as a protective shield when a sudden financial crisis occurs. However, for the lower class, setting aside money is a luxury that is difficult to reach due to the phenomenon of living paycheck to paycheck. The income earned is entirely spent on basic necessities (food and utilities). This means that if you do not have an ideal emergency fund at all, have no investment assets, and do not have a clear retirement plan, you can be certain you fall into this group.
- Rigid and Limited Lifestyle
Are you able to plan a holiday once a year? Do you often eat at restaurants or buy new clothes without having to sacrifice the kitchen budget? For the upper-middle class, these small pleasures are commonplace because there is flexibility in their budget. Conversely, for the lower class, the spending budget is very rigid. Enjoying entertainment or recreation is often considered a waste that could threaten the stability of tomorrow’s meals.
- Barriers to Accessing Higher Education
Education is often referred to as a social elevator or the most effective means of breaking the chain of poverty and raising one’s social class. Through higher education, a person has a greater opportunity to access jobs with much better salaries. However, systemic barriers and soaring tuition fees often make the tertiary education level irrational for the lower class. If you or your family feel that university is too expensive and impossible to reach without massive debt, this financial boundary reinforces your economic position in the bottom layer.
The Relationship Between Economic Class and Your Finances
Knowing your economic class position is not intended to trigger pessimism, but rather serves as an accurate alarm for your financial planning. By understanding the indicators above, you can be more realistic in setting a priority scale, reducing consumptive spending, and seeking additional opportunities to boost income in order to slowly move up the class ladder.