Business faces hard facts. . .plans accordingly

This week an amazing report on the shrinking middle class in the United States hit the streets via The New York Times.  The report was based on analysis done, not by social scientists or liberal political talking heads, but by business leaders and marketing strategists.

These two paragraphs set the tone for the article:

As politicians and pundits in Washington continue to spar over whether economic inequality is in fact deepening, in corporate America there really is no debate at all. The post-recession reality is that the customer base for businesses that appeal to the middle class is shrinking as the top tier pulls even further away.

If there is any doubt, the speed at which companies are adapting to the new consumer landscape serves as very convincing evidence. Within top consulting firms and among Wall Street analysts, the shift is being described with a frankness more often associated with left-wing academics than business experts.

Read the entire report here.

Clearly, this sort of trend alerts us to the growing numbers of people who stare poverty in the face on a daily basis.  We must work smarter.  We must become bolder.  We turn away from systemic, collective strategies to our own and our society's peril.

Are we simply asleep?

Rich and Poor Connected for Good or Ill

[Interesting analysis of the current flu outbreak from The Huffington Post.  Notice how even human disease sets establish our common link to one another across class and income lines!  Lessons??? LJ]

Flu In Poor Communities Shows Inequality Of 2013 Outbreak

Posted: 01/14/2013 6:47 pm EST

The 1918 flu killed more poor people than rich. The same affinity for inequity may be raising the 2013 flu's toll -- on the rich and poor alike.

Boston health officials have reported that low-income communities are bearing the brunt of the city's outbreak.

"What you see with flu activity is the same as what we see with health outcomes in general. Unfortunately, communities of color and low-income communities tend to share a disproportionate effect," Nick Martin, a spokesman for the Boston Public Health Commission, told The Huffington Post.

But as experts warn, such a disparity may not only be an issue of social justice. Elevated rates of the flu in poor communities may threaten the health of people who live in wealthier communities as well.

"We've found that getting lower-income neighborhoods covered with vaccines benefits higher-income neighborhoods," said Bruce Lee, an infectious disease expert at the University of Pittsburgh and lead researcher on a 2011 study of access to flu vaccines.

Based on computer simulations of 7 million "virtual people" in the Washington metropolitan area, Lee's team found the fewest infections at an epidemic's peak resulted when flu shots were allocated to the poorest counties. Delaying vaccinations in the poorest counties also increased infections among the wealthiest.

"This drives home the fact that we are all connected," Lee said.

To read the entire report click here. 

American divorce?

The following op-ed essay from David Brooks concerning the growing divide among the American people and Charles Murray's important book, Coming Apart, is worth your time. 

After you've read it, tell me what you think.

The Great Divorce
By DAVID BROOKS
Published: January 30, 2012

I’ll be shocked if there’s another book this year as important as Charles Murray’s “Coming Apart.” I’ll be shocked if there’s another book that so compellingly describes the most important trends in American society.

Murray’s basic argument is not new, that America is dividing into a two-caste society. What’s impressive is the incredible data he produces to illustrate that trend and deepen our understanding of it.

His story starts in 1963. There was a gap between rich and poor then, but it wasn’t that big. A house in an upper-crust suburb cost only twice as much as the average new American home. The tippy-top luxury car, the Cadillac Eldorado Biarritz, cost about $47,000 in 2010 dollars. That’s pricy, but nowhere near the price of the top luxury cars today.

More important, the income gaps did not lead to big behavior gaps. Roughly 98 percent of men between the ages of 30 and 49 were in the labor force, upper class and lower class alike. Only about 3 percent of white kids were born outside of marriage. The rates were similar, upper class and lower class.

Since then, America has polarized. The word “class” doesn’t even capture the divide Murray describes. You might say the country has bifurcated into different social tribes, with a tenuous common culture linking them.

The upper tribe is now segregated from the lower tribe. In 1963, rich people who lived on the Upper East Side of Manhattan lived close to members of the middle class. Most adult Manhattanites who lived south of 96th Street back then hadn’t even completed high school. Today, almost all of Manhattan south of 96th Street is an upper-tribe enclave.

Today, Murray demonstrates, there is an archipelago of affluent enclaves clustered around the coastal cities, Chicago, Dallas and so on. If you’re born into one of them, you will probably go to college with people from one of the enclaves; you’ll marry someone from one of the enclaves; you’ll go off and live in one of the enclaves.

To read the entire essay click here.

Everyone will be rich here!

What William Faulkner understood about why the middle seldom, if ever, opposes the top:

"There was no literate middle class to produce a literature. In a pastoral cityless land they lived remote and at economic war with both slave and slaveholder. When they emerged, gradually, son by infrequent son, like old Sutpen, it was not to establish themselves as a middle class but to make themselves barons, too.”

[William Faulkner, describing the class structure of the prewar South to Malcolm Cowley.]

Creating wealth for the wealthy

This report appeared in the Philanthropy News Digest and suggest that the wealthy in the U. S. receive numerous hidden benefits, many obvious and some not so obvious to the uninformed.  Certainly, the source of the report is well-respected and the basis of the information grounded in solid research and investigation.  Not something we're likely to hear about on the Sunday morning talk shows this week.  Have you noticed, no one seems to talk about "the poor,"  those folks who live in and struggle with poverty. 

Study Finds Federal Asset-Building Programs Reward the Rich, Penalize the Poor
Posted on September 24, 2010

The federal government spent nearly $400 billion in fiscal year 2009 to help people save money and build wealth, but the vast majority of the money went to the nation's richest taxpayers, a new report from the Annie E. Casey Foundation and the Corporation for Enterprise Development finds.

According to the report, Upside Down: America's $400 Billion Federal Asset-Building Budget  (26 pages, PDF), the top 1 percent of families received an average of $95,000 in assistance last year, while families making $100,000 annually received $1,600, and the poorest received less than $5. The inequitable distribution is all but invisible, the report found, because the wealth-building strategies are tucked into the federal tax code — as deductions, credits, and preferential rates — rather than in the government's annual discretionary budget, where they would receive more scrutiny.

By embedding asset-building strategies into the tax code as deductions and exclusions, the federal government naturally favors those who bear the heaviest tax burden. Indeed, the wealthiest 1 percent of taxpayers received 45 percent of the federal asset budget while contributing just 27 percent of total tax revenue. Policies that depend on direct outlays in the annual budget, including the Assets for Independence program, which provides matched-savings accounts for low-income families, have proven successful in encouraging savings, homeownership, and business startups. Yet, because they are visible, such programs often become fodder for partisan political battles.

"If we are serious about cutting the deficit, Congress could start by trimming these upside-down subsidies and creating a more equitable approach," said CFED president Andrea Levere. "As Congress debates whether to extend the Bush-era tax cuts for the wealthy and the president's fiscal commission develops recommendations to balance the federal budget, they should remember that we could shave $1 trillion off the deficit in the next decade simply by capping some of these benefits."

A picture is worth a thousand words. . .

"How are you, Sir!"

I don't know why I always seem to see situations like I'm about to describe. But, I do.

Last week, I walked into a Downtown bank to do some business. 

At the teller counter I noticed two bank tellers.

One's station was closed, but the man behind the "This Window is Closed" sign appeared to be filling a quasi-security role, sort of watching over the station of the other teller. 

Ahead of me, an older gentleman approached the counter.  He carried a worn backpack.  He wore relatively shabby blue jeans.  He could well have been homeless.  He appeared to be cashing a check or breaking a larger bill into a small amount of change.  The off-duty teller watched him with great interest.  He never looked at me.

As he stepped up to the service desk, the teller looked past him and said to me, "Be with you in a moment, Sir." 

Of course, I assumed that is how things worked there.  A line forms.  When it is your turn, you receive service.  It occurred to me that the teller felt the need to explain why he was forced to serve the poor, homeless-looking gent first. 

I replied, "Not a problem at all." 

When the customer--that's what he really was--finished his business and turned toward me to walk away, I said to him, "How are you, Sir!"

Before the man was able to get out what turned into a muted response to my greeting, the teller, assuming I was speaking to him, interrupted our encounter and said, "I'm doing fine.  How's your day going?"

The customer, the man to whom I directed my inquiry, looked at me and said simply, "Hello."

You may think me overly sensitive, judgmental or seeing/hearing things that are the product of my weird mind.  But, I have to tell you, I don't think so.  Not at all.

The man ahead of me had little money, and he looked the part. 

I had plenty of money, and I was dressed in clean, pressed, relatively new clothing.

He was black.

I am white.  

I had an account. 

He didn't. 

Surely, no one would be expected to greet him with respect. 

It's just the way things work, right? 

As I left the bank, the story continued. 

I got into my car and drove up Main Street back toward my office.  As I pulled away from the curb, I spotted the man on the sidewalk just ahead of me.

He delivered the cash he had received in the bank to a man seated in a wheelchair. He handed him the backpack and began pushing him up the sidewalk.  Clearly both were homeless. 

Both are no less men than the bank tellers and me. 

Both worthy of my respect and courtesy. 

Why does money and appearance and status matter so much to us?

Why do we fear the poor? 

When will we learn?