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The decline and fall of the American middle class

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    The decline and fall of the American middle class

    The heart of our political malaise is that the middle class, so long a powerhouse of US prosperity, is being crushed as never before

    Tuesday 13 September 2011

    Consumer Hourglass Theory
    The Consumer Hourglass Theory has been coined by Citibank to describe the new corporate strategy of marketing to high- and low-income earners but ignoring the squeezed middle.

    No one can accuse the candidates on stage at Monday's Republican debate of not discussing a broad range of topics. They talked about big issues like social security, the wars in Iraq and Afghanistan, energy independence, repealing healthcare reform and the need for job creation. And they talked about small issues for political point-scoring: like HPV vaccines for girls.

    But missing from the debate – and, in fact, much current discussion of America's politics – is the single biggest issue facing the country: the destruction of the American middle class. For stories on how America is bifurcating into haves and have-nots, with precious little in between, you have to dive behind the headlines of the latest Washington political bun-fight and find the devil in the details.

    Take a story that appeared in the Wall Street Journal Monday. The tale is nominally one about marketing strategy and it looks at how giant firm Procter & Gamble sells its household goods to its customers. But the picture that emerges is terrifying. P&G, it transpires, is cutting back on marketing to the disappearing middle classes, instead selling more and more to either high-income or low-income customers and abandoning the middle. Other big firms, like Heinz, are following suit.

    The piece reveals there is even a word for this strategy, helpfully coined by Citibank: the Consumer Hourglass Theory – because it denotes a society that bulges at the top and bottom and is squeezed in the middle.

    The story contains some scary figures, such as the fact that the net worth of the middle fifth of American households has plunged by 26% in the last two years. Or that the income of the median American family, adjusted for inflation, is lower now than in 1998.

    Or look at a story in the New York Times Tuesday. It starkly shows how the plight of the American working person has worsened. Solid jobs that once provided a secure grasp on middle class aims (a house, college for the kids, a retirement) have changed to become low-wage ones. It looks at the situation of some Detroit auto-workers, pointing out that new hires can find themselves working opposite long-term colleagues who do similar jobs yet earn twice as much. The system is called a "two tier" wage structure.

    Perhaps that system can be justified as an emergency measure to keep Detroit's auto-industry alive and help it survive the current tough times. But, like the Consumer Hourglass Theory, it actually looks far more like the permanent shape of things to come. American society is bifurcating, squeezing the middle class out of existence. The ranks of the poor and low-income earners are growing and the rich are doing just fine – and no one is talking about it, much less doing anything about it.

    The black-and-white facts of the case should stun Americans on both sides of the political divide. At the start of this week, Vermont Senator Bernie Sanders published a report on poverty called "Is Poverty a Death Sentence?" It showed that in 313 counties in America, life expectancy for women has actually declined over the last 20 years. It showed six million more people have fallen into poverty since 2004.

    Indeed, this week the US Census Bureau has released a survey showing that one in six Americans now live in poverty: the highest number ever reported by the organisation. It also showed that real median household incomes dropped 2.3% in 2010 from the year before, reflecting the decline of the middle class. At the same time, the richest 20% of the US population now controls 84% of the wealth. In fact, so staggeringly unbalanced has America become that the richest 400 American families have the same net worth as the bottom 50% of the nation.

    I do not care if you are a Tea Party activist or a Socialist party USA organiser, you should be able to agree on one thing, at least: this is unsustainable. Something has to give. But no one in the current political system looks they have an answer.



    http://www.guardian.co.uk/commentisf...rt-of-comments

    [you may also want to read this - especially page 16...http://www.unc.edu/~fredsolt/papers/Solt2006b.pdf
    Last edited by AngelinaCat; 09-16-2011, 11:25 AM.

    #2
    Just this week a local company that employs about 600 people has announced it is moving to North Carolina ( a right to work and work for less state) because it claims that electricity is too expensive in Western Pennsylvania. It is a union zinc processing plant that pays decent wages of $24/hr. More middle class jobs going south. At least not overseas.

    The jobs in NC will be non-union of course with lower wages. The Ohio Valley where I live has been in economic straits since the 80's and is quickly becoming a desolate ugly place to live. Two major steel mills are left standing all but abandond. The census results show a decrease in population of 15% because of the good paying middle class steel jobs that went to out of this country. Middle class workers in this area are definately a minority.
    Filed July 2009. Discharged 08/08/2014. Awaiting closing. We made it !!!! Woo-hoo!

    Comment


      #3
      Here is the thing - we need to start thinking of ourselves as WORKING class - period. The shame is that the "Capitalist" is turning us against each other - Ohio worker versus NC worker - we're all in the same boat and we need to start realizing that!!!

      Comment


        #4
        I think that the workers of all American states need to unite to achieve redistributive socialism via confiscatory taxes on the wealthy.

        Comment


          #5
          Originally posted by JackBondLove View Post
          I think that the workers of all American states need to unite to achieve redistributive socialism via confiscatory taxes on the wealthy.
          Wow. Could you define "wealthy" for us?
          All information contained in this post is for informational and amusement purposes only.
          Bankruptcy is a process, not an event.......

          Comment


            #6
            Great topic to start, iamold
            Thanks

            yes, I've observed the same. most of the middle-class today are being underestimated and neglected. One example is the Medicaid program which is unfavorable among the middle-class

            Comment

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