April 9, 2012 4:25 pm
American corporations have pretty much written off the middle class. Their actions declare that the middle class is moribund. And they should know since they have been in the front lines shooting down and decimating the middle class. Indeed, American business has dismantled much of its manufacturing and has eliminated untold numbers of other middle class jobs, sending them overseas where cheap labor fattens corporate profits at the expense of American workers. That’s why the employment and housing markets are struggling on life support, food stamp use is at an all-time high and the ranks of the working poor are swelling — while corporate profits soar and the S&P 500 stocks show the best first quarter since 1998.
In view of the assault on American jobs and workers is it any wonder that a Stanford University study reveals a dramatic drop in American families living in middle class neighborhoods — from 65 percent in 1970 to 44 percent in 2009. Robert Borosage, President of the Institute for America’s Future, adds thisalarming note: “The broad middle class — the triumph and strength of America’s democracy — is sinking. Unless we change course dramatically, we will become even more a nation of haves and have-nots.”
Corporate America is shifting its focus in product development and marketing to serve the “hourglass economy.” The hourglass has two chambers connected by a slim channel. Translated into economic terms, or better yet, the emerging picture of America, the two chambers represent rich and poor, with virtually nothing in the middle.
Worse, while the traditional hourglass has two equal chambers, the economic hourglass does not. One chamber contains a small percent of the population and most of the wealth and the other is filled with the bulk of Americans, who have little access to resources and diminished hope for prosperity. The hourglass economy has become so entrenched that Bloomberg News credits it with dividing Americans and defining U.S. politics.
Leading the rush into the hourglass economy are some icons of American industry, like Proctor and Gamble. Here’s what Melanie Healey, group president of P&G’s North America business, said to the Wall Street Journal about what her company did when it started losing market share to competitors who were catering to the low end market: “It has required us to think differently about our product portfolio and how to please the high-end and lower-end markets …That’s frankly where a lot of the growth is happening.”