Labouring under old ideas as the 'great divide' disappears

THE language of class lives on in Australia's political debate thanks to cliches such as ''class warfare'' and ''middle-class welfare''.

But terms such as ''middle class and ''working class'' emerged when the economy was very different.

Over the past 50 years Australia's industrial base - a big employer for those traditionally labelled working class - has gradually declined as a share of gross domestic product and of employment.

In the Australia of 1933 labourers, farm workers and miners outnumbered professionals and managers by more than two to one. But by the early 1980s that had reversed.

The last census underscored this trend with the ''professional'' employment category growing more quickly than other occupations. One in four workers in Sydney are now professionals. The city's proportion of technicians and tradesmen fell from 12.7 per cent to 12.2 per cent between 2006 and 2011. Only about one in 12 Sydney workers are now in manufacturing.

Global economic forces, including a reduction of trade barriers and the rise of new manufacturing powers such as China, have contributed to these changes in the complexion of the workforce.

Consumer preferences and technical innovations have also played a part. Consumers and businesses now demand far more services in areas such as recreation, travel, education, finance and health. A raft of new services, such as communications and IT, has burst into being.

A relative decline in low-skilled jobs has been accompanied by a shift towards a better educated workforce and more high-skilled occupations. This has coincided with a dramatic increase in educational attainment. Retention rates to Year 12, for example, more than trebled between 1968 and 2010, from 23 per cent to 78 per cent.

The flood of married women into the workforce has also shifted the distribution of wealth and perceptions of economic status.

IBISWorld's Phil Ruthven says the growth in workforce participation of married women - noticeable from the late 1960s - created a dynamic new cohort of double- income households. Many families vaulted from average incomes into what Ruthven calls the "well-off".

The proportion of income accruing to the richest 40 per cent of Australian households grew markedly thanks to the influx of women.

"Its just silly to call that group middle-income," he says. For him "middle income" households are those in the middle 20 per cent on the income distribution - that is, below the richest 40 per cent but above the poorest 40 per cent. However, that grouping accounts for only one sixth of household income in 2010, and an eighth of household wealth.

The story Labouring under old ideas as the 'great divide' disappears first appeared on The Sydney Morning Herald.

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