Does the polarization of wealth in the US spell the demise of, not only the middle class, but the middle class brand?
We hear a lot about polarization in this lead up the the '08 election. It shows up nicely in politics because of the necessity of picking a side, and then voting towards a presidential outcome. But polarization in politics is simply the most obvious manifestation of a more pervasive phenomena that is impacting all aspects of our culture and economy and defining our behavior within in.
Polarization of wealth is an ever more apparent. Marx, in his capacity as an economist, rather than political theorist, was right about a lot of this stuff. The latest $700 billion bailout marks the latest and greatest march north of what used to be middle class tax payers money. According to the New York times, a mere $153 million would put you on the Forbes 400 Richest Americans list in 1982. Today the number is $1.3 billion. It would appear that the future of the monetary north pole remains rosy while the actual North Pole melts into the sea.
Down at the south pole things are getting a little busy. A population explosion of unprecedented proportions is swelling the ranks of the poor poor, poor working
class, poor middle class and all poor buggers in general. The chances are, if you were any where close to, or south of the financial equator a year or two ago, you are now migrating south towards the 'no disposable income zone'.So the question becomes............ Who's left in the middle?
Well hardly anybody really. The middle class will remain intact from the standpoint of being an identifiable group, but what it means to be in that group is going to change drastically. It's going to be bitter medicine for a while until the absolute necessity of adopting a more sustainable model of consumption becomes de rigor. The epiphany that we should have had a decade or so ago, grew up and became a cataclysmic wipe out. Oops.
Basically the middle class is no longer a screeching gannet with an insatiable appetite for garbage. The brands that have been selling average quality goods to Joe Average (six pack), based on his very average expectations are taking a hit. Business Week's report on the top 10 best, and worst performing brands lists The Gap and Ford in the losers column. (The other three are banks). The real tell here is Gap. Friend to middle America for so long and now abandoned. What did they do wrong.
I would suggest that they failed to pick a pole. They are neither the cheapest or the best and they offer no compelling experience or point of emotional engagement for their customers. Every body just kind of wandered off and decided to spend more (or nothing at all) and hang out on the sofas at Anthropology.
So what is the future of the middle class brand and what adjustments must they make to remain in business as their customer base redefines value in the way they spend their limited cash?
