Separate, Not Equal

The tale of the haves and have nots is an all-too-familiar narrative in America. For the past 35 years, real wages haven’t budged for the majority of flag-waving, red, white, and true blue believers in the land of the free.

An interesting variation on our economic duality was offered up by reporters, Nick Timiraos and Kris Hudson, in Thursday’s Wall Street Journal. They write that our economy is now “two-tiered,” and companies selling consumer goods are paying attention to this, in order to better reach those with the pay to play.

Timiraos and Hudson offer up the example of Quadrant Homes, a Seattle-area builder that used to build starter houses for $269,000, with a marketing slogan, “More House, Less Money.” Quadrant, however, recognized that their customer base—middle-class homebuyers looking to get into their first homes—was weighted down with debt and credit issues. The company is now going after those in the economy who have done well, offering amenities like “vaulted ceilings and gourmet kitchens.” They’ve also adopted a new marketing tagline; “Build Your Way,” for consumers who want and can afford choices beyond a mere tar paper shack.

Lifestyles of the Rich and Famous.

Lifestyles of the Rich and Famous.

Wealthy Americans continue advancing, income-wise, while those on the other end of the income scale are falling further behind.  The article adds that these Income differences are driving how consumers are being marketed to, “for everything from housing to clothing to groceries to beer.”

Spending by high-end consumers is driving our economy. The rebound in spending post-recession is almost entirely coming from the top of the income pyramid.

Since 2009, the average spending per household by the top 5% of income earners climbed 12% through 2012. Spending over the same period by everyone else fell 1%. This comes from research done by Barry Cynamon and Stephen Fazzari, published last year.

In my own corner of New England, all the hoopla and hype about food and the associated hipster-ness of Portland is a result of the high income pockets in and around Maine’s largest city. Who can afford to drop $200 on a dinner for two at Vineland, or pay $78 for a porterhouse at Timber? Mainers who are doing well—professionals and other high-wage earners in Portland, not to mention those domiciled in the well-to-do suburbs ringing the city, places like Falmouth, Cumberland, and Cape Elizabeth. It’s not only the restaurants and food scene, either. Craft beer makers, distilleries, as well as farmers markets, boutique clothing stores—I’ll take a leap and posit that even things like Portland’s buy local campaign receives most of its support from higher-income types.

This wealth inequality has been documented extensively. A paper by Emmanuel Saez of the University of California, Berkeley (those damn socialists!!), and Gabriel Zucman of the London School of Economics show our inequality is reaching historic levels.

No one seems to care, either. That includes those on the bottom rungs of the socio-economic ladder.

John Steinbeck gets quoted as saying that “socialism never took root in America because the poor sees themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” There is some dispute about the authenticity of the quote—it may be a paraphrase, instead. Either way, it’s clear to me that most Americans want to be rich, aspiring to be one of the 1%, too busy hating themselves and others, rather than the causes of inequality. All because they believe that somehow, their invitation to become members of the exclusive club has been misplaced, but will eventually arrive.

2 thoughts on “Separate, Not Equal

  1. What is even more obscene about the wealth inequality is that those who are booming in these days are almost always creating nothing. They market, shill, repackage and sell again, but where is the actual fruit of their labor? Where is the medicine, the food, the household product that eases and improves lives? There is nothing there, and yet they are awash in money and buying everything in sight, and when the magic cash disappears, they will declare that they are the feudal lords of everything in sight as well. Then, we will see who thinks they are a “temporarily embarassed millionaire” and who thinks other expedients might be necessary.

    Steinbeck is right, although that gives short shrift to how American socialists were literally beaten to death and imprisoned in the first decades of the last century. What really sticks with me, though, is how deep the mind control seeps in when most Americans continue to think that. It was a stroke of genius to create a large managerial class to administer the corporate regime, raising up a huge class of “middle class” people utterly dependent on the corporation’s benificence for their continued fat lives. We all can aspire to that if we get good grades, behave, have good credit scores and go to the right colleges. The most focused (psychopathically) of us can rise to the very top.

    We are taught from our mother’s breasts that anyone can be a millionaire in America, and it’s largely true, but at what cost? What cost to our souls?

    There are around me a dozen new “neighborhoods” springing up. The old farm and pastures have been plowed under, fake lakes dredged, the model house at the entrance dressed out and spangled. But for all the “growth,” all the questionably legal immigrants painting the gates, all the sprinkler systems and shrubs dotted about, there seem to be no houses actually being built. The old farm leveled across the street from my “neighborhood” has space for over 70 exclusive homes, but only five have been built, and one of them is the sales office. Plus a chintzy playground.

    No, around here, too, the only real growth market is catering to the mini-millionaires. For now.

  2. @LP
    You make so many great points about the economic state of our nation, especially wealth being created by keystrokes.

    What I don’t understand is why workers can’t see the obvious—U.S. labor productivity continues to track at an all-time high—yet, wages have remained stagnant, all the while, corporate profits continue to rise.

    70 percent of all economic growth is consumer-driven, so when Republicans and mainly those on the right push back against wage gains, what they’re saying is, “we don’t want everyone to benefit” from gains directly related to workers and the working class.

    Conservative ideology comes down to basic one thing—“cheap labor.”

    The truth is really simple—cheap-labor conservatives don’t like working people. They don’t support “bottom up” prosperity, and the reason for it is very simple—this kind of prosperity doesn’t fit the feudal (a great term, btw) economic state that benefits the 1 percent. They support social hierarchy and privilege—they want to make sure that absolutely nothing ends up coming back to the men and women working for an hourly wage.

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