In this series, correspondents for The Washington Post examine how middle class families make ends meet in Western Europe and Japan and how their standard of living compares with middle class Americans.
Snapshots of middle class British families coping with the inflationary squeeze:
The wife of a North London National Health Service physician makes many of her family's clothes and buys much of the rest from discount shops. Their family of four is spending a three-week vacation in Italy and France this summer, but they are camping out to avoid costly hotels and restaurants.
Derek, the service manager of a southern England auto dealership, and his schoolteacher wife, Margaret, live with their two children in a recently built suburban home and drive two cars. But one of the cars is owned by Derek's employer.
To meet the mortgage payments on their house, bought three years ago for $50,000 and now worth twice as much, this two-income family has had to budget carefully, give up vacations for several years, eat out only at Christmas and occasionally substitute cheaper frozen dinners for the traditional Sunday beef roast.
"When I was a little girl, we always had a Sunday joint of beef," Margaret said. "But we can't always afford one now. I guess we seem middle class because of our house and cars, but I don't feel middle class."
John, a local government housing official and his wife, Sue, a psychiatric social worker who quit her job when their baby was born a few months ago, live in a rambling Victorian house in South London bought for just $10,000 seven years ago.
To make ends meet, despite their home's bargain price and low mortgage, they are renovating the house themselves and renting out several rooms to boarders.
They grow their own vegetables in the back yard and cook for friends rather than meeting them at restaurants. They have put aside dreams of traveling abroad. Since they have only one car, John commutes 40 miles to work by bicycle.
"We are not very materialistic and possessions are not central to our lives," Sue said. "John says riding his bicycle to work is good exercise and we enjoy growing our vegetables in the back yard.
"But I guess we're making a virtue out of necessity. It would cost John two pounds [$4.40] a day to take the subway to work, and that would make a difference. We save wherever we can."
Not everyone in Britain's middle class is feeling the squeeze of relatively low salaries and fast-rising prices. But some of those who say they have not been hurt by inflation nevertheless seem content with less than their occupations might suggest.
"My salary has increased faster than the rate of inflation," said a London management consultant who lives in a pleasant northwestern suburb just beyond trendy Hampstead. He and his wife have one car, but meals out once or twice a month and have only one preschool child. A colleague of his, however, is having trouble managing both city and country homes, two cars and private school tuition for two children.
Other business executives, middle managers, doctors, lawyers, salesmen and better paid skilled workers manage affluent-appearing lifestyles only with the "perks" and package deals on which more and more middle class Britons now depend; company cars, even company clothes and home furnishings, expense account lunches, dinners and theater and concert tickets, packaged vacations in Britain or elsewhere in Europe.
According to several businessmen and recent studies here, expense account padding also has become widespread.
"The British were scrupulously honest about such things until recently, but it's all changing," said an advertising executive who acknowledged writing off a variety of non-business lunches and dinners and other expenses. "It saddens me, but I do it, too. I was raised to be honest, but with taxes and prices the way they are, I have to."
There are a variety of other "perks" that companies here give their executives, managers and top salesmen and skilled workers because of government restrictions on pay raises and the high portion of additional wages that is lost to taxes.
The most widespread perk is the company car. Two of every three new cars sold in Britain are company cars. Yet most of them are used much less for company business, if at all, than for commuting and family driving.
The British Ford Cortina has become such an ubiquitous company-family car that status-conscious businessmen who do not want their neighbors to know their only car is owned by by the company have begun demanding and getting more prestigious vehicles.
As a result, the roads of this low-wage, high-price country are filled with expensive Austins, Rovers, Jaguars, BMW'S and Mercedes, a great many of which are not owned by their proud drivers.
Derek, the auto dealership service manager drives a new $14,000 car, provided along with gasoline, by his company. His wife drives their own Volkswagen to the school where she teaches.
"We could never afford my husband's car," she said, "or two cars of any kind, even though they're a necessity."
Many executives and middle managers also are provided with free meals in a staff dining room which they consider away from the riffraff, have their clothes bought by the company, and even rent their home furniture and appliances from the company, later buying them "secondhand" at bargain prices. All this makes the high inflation and tax rates easier to bear for a steadily growing number of businessmen here.
Except for a brief respite last year, Britain has suffered one of the highest inflation rates among major industrialized nations since 1973, "the last year before inflation turned from being a nuisance into being a major menance," according to former London Sunday Telegraph financial editor Patrick Hutber in his book, "The Decline and Fall of the Middle Class."
Inflation increased here at twice the rate in France, two to three times the rate in the United States and four times that in West Germany.
"We had no idea in the 1960s that things would ever change this way," said Norman Rebanks, a lawyer in a suburb of Manchester in industrial northwestern England. "There was only gradual inflation. Price increases seemed so small."
Rebanks said the price of gasoline seemed always to stay around 70 cents a gallon. Then, during the 1970s, it shot up to more than $2.50. Automobiles that cost $1,500 to $2,000 here in the early 1970s, and seemed to be much better made, now cost $5,000 to $10,000.
Food, much of which must be imported into Britain and is inflated in price by Common Market agricultural subsidies, has become particularly expensive. Without eating a single meal out, the average middle or upper middle calss family spends more on food than on anything else, including shelter.
Beef costs more than $2 a pound for hamburger and up to $6 a pound for steaks and roast. Chicken and fish cost more than a dollar a pound, butter $1.50, milk 70 cents a quart, and eggs $1.50 to $2 a dozen.
Salaries, particularly for managerial and professional positions, are only about half those in the United States, France, West Germany, or Scandinavia. Top business executives earn as little as $30,000 a year. Middle managers and top salesmen average $15,000 to $20,000, the same as the best-paid skilled workers.
The very highest civil servants and member of Prime Minister Margaret Thatcher's Cabinet are paid annual salaries of $20,000 to $30,000. Few physicians working under the National Health Service earn more than that.
The average annual family income for the wealthiest 10 percent of Britains households is $25,000, with two or more wage earners in many of those households. Married women form the fastest growing segment of the British work force and account for 78 percent of all of the nation's parttime workers.
Even after Thatcher's recent round of income tax cuts, middle and upper middle class families are taxed nearly twice as heavily in Britain as in the United States or Europe, outside of Scandinavia.
So it was not surprising that 79 percent of a random sample of Britons questioned in a 1977 European Economic Community survey said they were forced by the income-price squeeze to give up things they thought they should be able to afford.
Two of every five upper income families said they were forced to cut down on spending for vacations and leisure activities.
It costs as much to fly from London to Rome or Stockholm as to the United States. Package vacation tours and beach resort holidays in Europe have doubled and tripled in price since 1975. A growing number of British vacationers are camping out, staying with relatives or friends, or going to "self-catering" resorts where they save money by doing their own housekeeping and cooking.
London theater tickets, once a remarkable entertainment bargain, now cost from nearly $4 for the worst seat to $15 or more for the best.
A meal for two with drinks and wine in a fashionable, moderately priced restaurant costs $20 to $40 at lunch and $40 to $80 at dinner. Even in pubs, the neighborhood bastions of cheap drink and food, local beer is at least 80 cents a pint and cheese sandwishes are a dollar. A MacDonald's Big Mac costs $1.40.
A big hedge against inflation is real estate. Housing prices took off in Britain this decade, soaring above inflation, wage increases and stock prices. The average house in Britain cost about $10,000 in 1970 and over $45,000 today.
In the London area, a house with three or four bedrooms in middle and upper class neighborhoods of the city and suburbs sells for $100,000 to $200,000 and up. Apartments the same size rent for more than $600 a month in the suburbs and much more in the city, where only furnished apartments are available.
The proportion of British families who own their homes is steadily rising toward 60 percent. Lower middle and working class families renting public housing apartments and rowhouses are eagerly waiting to take up Thatcher's offer to sell them their homes at discount prices with subsidized mortagages.
Thatcher and her Conservative Party were put into power here earlier this year with significant help from both traditionally Conservative middle class voters and skilled workers who discovered that the middle class tax and price squeeze took away most of what they expected to gain as they climbed the income ladder.
Thatcher's success and tenure as prime minister may well be determined by her ability to fulfill campaign promises to ease the squeeze with more income tax cuts and eventual reduction of the inflation rate.