My colleague Geoff Pullum has objected to the selection of squeezed middle as Oxford Dictionaries' 2011 Word of the Year on the grounds that "the 'Word of the Year' should be a word." Allow me to provide a counterpoint to this view.
First, full disclosure. In January, at the most recent meeting of the American Dialect Society, I was named the chair of the New Words Committee, and in this capacity I preside over the selection of the ADS Word of the Year (working closely with old hands at the WOTY game like ADS executive secretary Allan Metcalf and vice president for communications and technology Grant Barrett). I also now edit the "Among the New Words" feature in American Speech, the quarterly journal of the ADS, which covers neologisms of all sorts, WOTY nominees included. (See the Summer 2011 installment for a roundup of last year's nominees, including the winner app and the runner-up nom.) Further disclosure: before my current job as executive producer of the Visual Thesaurus and Vocabulary.com, I was editor for American dictionaries at Oxford University Press and was responsible for overseeing the New Oxford American Dictionary's Word of the Year — in 2007, for example, we selected locavore.
All things being equal, I do generally prefer that a "Word of the Year" be what is generally recognized as a word: that is, a single written unit like locavore, app, or nom. For starters, such selections are a lot easier to explain to the general public. As Jesse Sheidlower wrote in his recap of the 2004 ADS WOTY selection for Slate, "It's not actually 'Word' of the Year; it can be a compound, phrase, prefix, or so forth, but we know we can't get away with promoting a 'Lexical Item' of the Year." But whether it is the ADS or a dictionary program like Oxford's making the choice, lexical items are indeed what should properly be considered, even if those items form compounds or phrases.
I agree with Geoff that the press release from Oxford Dictionaries erred in explaining squeezed middle as a compound. Nonetheless, I think that a compositional phrase can be sufficiently lexicalized for consideration as Word of the Year — especially when a dictionary is making the selection. Though Geoff argues that it's "ridiculous to think of putting this in a dictionary," dictionaries from the OED on down are in fact full of such phrases. Sometimes they are lemmatized separately, and sometimes they appear in so-called "run-on entries" — so that an ADJ-N phrase can be found under the head noun. (Not just any phrase will do, of course: to be considered for inclusion, it has to achieve sufficient prominence and distinctiveness in common usage, which is not the case for such collocations as "anglophone parts of it," mentioned by Geoff in his post.)
Consider, for instance, the ADS 2004 WOTY selection, which was not just one such phrase but three: red state, blue state, and purple state, as used in US political geography (see my historical explanation here). The latest dictionary editions from American Heritage and Oxford include red state and blue state as headwords (with American Heritage adding purple state) — and why shouldn't they? Such political phrases can be "compositional" while still being invested with special new meanings that lexicographers would rightly want to document. Squeezed middle would appear to fit that class. (I think it's an odd WOTY choice for other reasons — especially the fact that Oxford's UK and US dictionary programs decided to make this a joint transatlantic selection. The press release says that "the Word of the Year committee in the US felt [squeezed middle] had good resonance in the US, as well," but I have yet to discern such resonance on this side of the pond, in a year dominated by such words as occupy.)
The nomination and selection process for ADS WOTY is a democratic one, with all those in attendance at the annual meeting encouraged to vote and make their voices heard. I am pleased to learn that Geoff will be making his inimitable voice heard at our January proceedings in Portland, and if he would like to lead a non-phrasal brigade he is more than welcome to. But I don't expect the lexicographers in the room to agree with him.