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Sun, Dec 21, 2014

LOGUE: Gap continues to widen between middle, upper class

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For all the economic statistics that confirm the shrinkage and redefinition of the American middle class, it’s the anecdotal evidence that hits home with most of us.

L.Z. Granderson, a columnist for CNN.com, opined Jan. 1, 2014, that families such as the one in which he was reared no longer enjoy their special Sunday-after-church trip to Red Lobster because they can’t afford it anymore.

John Glass, a restaurant industry analyst at Morgan Stanley, tells The New York Times in a Feb. 3 article that casual dining facilities have experienced declines in foot traffic every fiscal quarter except one since 2005.

Stores such as Costco and Dollar Tree are seeing more and more of the middle-class customers that have long been associated with Sears and J.C. Penney.

Thirty years ago, it might have been less likely that a Goodwill store would be located right down the road from a golf club. But that’s the case now with the location on South Church Street.

Of course, there’s nothing wrong with patronizing Goodwill, a fine organization that helps thousands of people, or for the middle class to tighten its collective belt.

The disturbing trend is in the concurrent rise in luxury brands.

In that same New York Times article, reporter Nelson D. Schwartz states that high-end hotels like the Four Seasons and St. Regis increased their revenue 7.5 percent in 2013.

And General Electric’s fastest-growing brand of appliances is the Café brand, which offers feature-laden refrigerators for between $1,700 and $3,000 each. 

There is an argument to be made that the economic class divide is not totally due to upper-class executive greed, but due, in part, to middle-class executive complacency.

Amy Merrick’s Feb. 6 column in The New Yorker magazine cites a 2003 manual titled “Trading Up” by Michael J. Silverstein and Neil Fiske. It warned back then that middle-class consumers were going for low prices when they could get the lowest prices and spending big bucks only on the latest styles or products that served particular unique functions.

Some store chains did not see the changes coming or, if they did, failed to react to them in time.

Merrick quotes Silverstein as saying, “The bottom 20 percent of America has nothing. The second 20 percent have a little. The third have enough for a comfortable life. The fourth want more, but they live just fine. The top 20 percent have it all.”

How ironic it is that so much marketing over the past 20 years has focused on companies’ professed desire to offer consumers more choices.

As the gap between the former middle class and the growing upper class widens, it seems inevitable that, unless there’s a meaningful break in wage stagnation, middle-class consumers will have fewer and fewer real choices.

Garage sales, yard sales and estate sales are looking better all the time—unless, of course, corporate America finds a way to take over them, too.

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gina logue, middle class
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