The hourglass economy

New poverty figures show a big jump in the number of poorest Americans. Meanwhile, the middle class is disappearing

Topics: U.S. Economy, How the World Works,

The hourglass economy

Tuesday morning’s release of poverty data from the Census Bureau confirms what many critics of growing income inequality already knew: The United States is doing a better and better job imitating the social stratification of what we used to call, dismissively, “third world” countries.

The poverty rate in 2010 rose to an embarrassing 15.1 percent, up from 14.3 percent in 2009. “There were 46.2 million people in poverty in 2010, up from 43.6 million in 2009 — the fourth consecutive annual increase and the largest number in the 52 years for which poverty estimates have been published,” reported the Census Bureau.

The poverty threshold for a family of four in 2010 was $22,314. Overall, real median household income declined by 2.3 percent in 2010.

Put these numbers together with what we already know about how the rich are faring in the U.S. — the top 10th of 1 percent takes home about 24 percent of all American wealth — and we have stunning confirmation of what a Citigroup analyst has labeled the “consumer hourglass economy.”  The wealthy are doing fine, while the number of those living in poverty grows, and the middle … the middle is just disappearing.

The Wall Street Journal reported on Monday that big American consumer product companies are beginning to split their product offerings between retail lines aimed either at the low end or the high end.

For generations, Procter & Gamble Co.’s growth strategy was focused on developing household staples for the vast American middle class.

Now, P&G executives say many of its former middle-market shoppers are trading down to lower-priced goods — widening the pools of have and have-not consumers at the expense of the middle….

A wide swath of American companies is convinced that the consumer market is bifurcating into high and low ends and eroding in the middle. They have begun to alter the way they research, develop and market their products.

Food giant H.J. Heinz Co., for example, is developing more products at lower price ranges. Luxury retailer Saks Inc. is bolstering its high-end apparel and accessories because its wealthiest customers — not those drawn to entry-level items — are driving the chain’s growth.



But here’s the kicker:

To monitor the evolving American consumer market, P&G executives study the Gini index, a widely accepted measure of income inequality that ranges from zero, when everyone earns the same amount, to one, when all income goes to only one person. In 2009, the most recent calculation available, the Gini coefficient totaled 0.468, a 20 percent rise in income disparity over the past 40 years, according to the U.S. Census Bureau.

“We now have a Gini index similar to the Philippines and Mexico — you’d never have imagined that,” says Phyllis Jackson, P&G’s vice president of consumer market knowledge for North America. “I don’t think we’ve typically thought about America as a country with big income gaps to this extent.”

The new numbers from the Census Bureau peg 2010′s Gini coefficient at 0.469, which, statistically speaking, doesn’t represent a significant change in income inequality as compared to 2009. However, the Bureau notes, “changes in shares of aggregate household income by quintiles showed a slight shift to more inequality.” So the basic trend is still depressingly in place.

It’s not hard to understand what is happening here. The middle class, squeezed by globalization and advances in technology, is sinking backward, while the rich benefit disproportionately from gains in trade and excessively accommodative tax policy. Politically speaking, the obvious prescription would be to raise taxes on the rich and create jobs for the middle class. Unfortunately, the current Republican Party seems to think that the income demographics of the Philippines are something to be aspired to, instead of fixed.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 14
  • Close
  • Fullscreen
  • Thumbnails

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and Adam, "Pilot"

    One of our first exposures to uncomfortable “Girls” sex comes early, in the pilot episode, when Hannah and Adam “get feisty” (a phrase Hannah hates) on the couch. The pair is about to go at it doggy-style when Adam nearly inserts his penis in “the wrong hole,” and after Hannah corrects him, she awkwardly explains her lack of desire to have anal sex in too many words. “Hey, let’s play the quiet game,” Adam says, thrusting. And so the romance begins.

    13 of "Girls'" most cringeworthy sex scenes

    Marnie and Elijah, "It's About Time"

    In an act of “betrayal” that messes up each of their relationships with Hannah, Marnie and Elijah open Season 2 with some more couch sex, which is almost unbearable to watch. Elijah, who is trying to explore the “hetero side” of his bisexuality, can’t maintain his erection, and the entire affair ends in very uncomfortable silence.

    13 of "Girls'" most cringeworthy sex scenes

    Marnie and Charlie, "Vagina Panic"

    Poor Charlie. While he and Marnie have their fair share of uncomfortable sex over the course of their relationship, one of the saddest moments (aside from Marnie breaking up with him during intercourse) is when Marnie encourages him to penetrate her from behind so she doesn’t have to look at him. “This feels so good,” Charlie says. “We have to go slow.” Poor sucker.

    13 of "Girls'" most cringeworthy sex scenes

    Shoshanna and camp friend Matt, "Hannah's Diary"

    We’d be remiss not to mention Shoshanna’s effort to lose her virginity to an old camp friend, who tells her how “weird” it is that he “loves to eat pussy” moments before she admits she’s never “done it” before. At least it paves the way for the uncomfortable sex we later get to watch her have with Ray?

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and Adam, "Hard Being Easy"

    On the heels of trying (unsuccessfully) to determine the status of her early relationship with Adam, Hannah walks by her future boyfriend’s bedroom to find him masturbating alone, in one of the strangest scenes of the first season. As Adam jerks off and refuses to let Hannah participate beyond telling him how much she likes watching, we see some serious (and odd) character development ... which ends with Hannah taking a hundred-dollar bill from Adam’s wallet, for cab fare and pizza (as well as her services).

    13 of "Girls'" most cringeworthy sex scenes

    Marnie and Booth Jonathan, "Bad Friend"

    Oh, Booth Jonathan -- the little man who “knows how to do things.” After he turns Marnie on enough to make her masturbate in the bathroom at the gallery where she works, Booth finally seals the deal in a mortifying and nearly painful to watch sex scene that tells us pretty much everything we need to know about how much Marnie is willing to fake it.

    13 of "Girls'" most cringeworthy sex scenes

    Tad and Loreen, "The Return"

    The only sex scene in the series not to feature one of the main characters, Hannah’s parents’ showertime anniversary celebration is easily one of the most cringe-worthy moments of the show’s first season. Even Hannah’s mother, Loreen, observes how embarrassing the situation is, which ends with her husband, Tad, slipping out of the shower and falling naked and unconscious on the bathroom floor.

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and the pharmacist, "The Return"

    Tad and Loreen aren’t the only ones to get some during Hannah’s first season trip home to Michigan. The show’s protagonist finds herself in bed with a former high school classmate, who doesn’t exactly enjoy it when Hannah puts one of her fingers near his anus. “I’m tight like a baby, right?” Hannah asks at one point. Time to press pause.

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and Adam, "Role-Play"

    While it’s not quite a full-on, all-out sex scene, Hannah and Adam’s attempt at role play in Season 3 is certainly an intimate encounter to behold (or not). Hannah dons a blond wig and gets a little too into her role, giving a melodramatic performance that ends with a passerby punching Adam in the face. So there’s that.

    13 of "Girls'" most cringeworthy sex scenes

    Shoshanna and Ray, "Together"

    As Shoshanna and Ray near the end of their relationship, we can see their sexual chemistry getting worse and worse. It’s no more evident than when Ray is penetrating a clothed and visibly horrified Shoshanna from behind, who ends the encounter by asking if her partner will just “get out of me.”

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and Frank, "Video Games"

    Hannah, Jessa’s 19-year-old stepbrother, a graveyard and too much chatting. Need we say more about how uncomfortable this sex is to watch?

    13 of "Girls'" most cringeworthy sex scenes

    Marnie and Desi, "Iowa"

    Who gets her butt motorboated? Is this a real thing? Aside from the questionable logistics and reality of Marnie and Desi’s analingus scene, there’s also the awkward moment when Marnie confuses her partner’s declaration of love for licking her butthole with love for her. Oh, Marnie.

    13 of "Girls'" most cringeworthy sex scenes

    Hannah and Adam, "Vagina Panic"

    There is too much in this scene to dissect: fantasies of an 11-year-old girl with a Cabbage Patch lunchbox, excessive references to that little girl as a “slut” and Adam ripping off a condom to ejaculate on Hannah’s chest. No wonder it ends with Hannah saying she almost came.

  • Recent Slide Shows

Comments

0 Comments

Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>