[See also National Data, By Edwin S. Rubenstein November Jobs: American Worker Displacement Slightly Down From Obama Era Highs—But Blacks (!) Hard Hit ]
Yipee! The AP headline Unemployment rate falls to 8.6% in November gives people a false impression of prosperity.
However, a Huffington Post headline on the same government data tells a different story: “Jobs Mirage: 315,000 Drop Out Of Workforce, Driving Unemployment Rate To Three-Year Low”
Let’s keep the record straight. America’s famous Middle Class, the bulwark of our economy, staunch supporter of our republican (small “r”) form of government, believers in the American Dream and observers of the Rule of Law, have been hit brutally hard in the past several decades in no small measure been caused by what I have dubbed “immigration overload”—the arrival since 1965 of well over 100 million aliens and their children, disproportionately unskilled people, into an increasingly high-tech society.
Folks, these aliens, however good, hardworking, and honorable, were simply not needed! The beneficiaries (at least temporarily) were the businesses lobbies and the ethnic and religious lobbies who cheered on the invasion and intimidated Americans who feared being called racists, nativists, xenophobes etc.
Among numerous bad effects, this massive influx has put pressure on American workers’ wages, taken away summer jobs for our children, and added to the burgeoning costs of government.
Now some of our largest companies are realizing that the Middle Class is so diminished that they must cater to the poor. The Wall Street Journal’s September 12, 2011 Page One article, As Middle Class Shrinks, P & G Aims High and Low, by Ellen Byron, reports
“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.
That's forced P&G, which estimates it has at least one product in 98% of American households, to fundamentally change the way it develops and sells its goods. For the first time in 38 years, for example, the company launched a new dish soap in the U.S. at a bargain price.
P&G's roll out of Gain dish soap says a lot about the health of the American middle class: The world's largest maker of consumer products is now betting that the squeeze on Middle America will be long lasting.”
WSJ’s Byron quotes PG:
“‘It’s required us to think differently about our product portfolio and how to please the high-end and lower-end markets,’ says Melanie Healey, group president of P&G's North America business. ‘That's frankly where a lot of the growth is happening.’"
Translation: the rapid decline of the Middle Class is now a key part of our game plan.
Of course, the usual explanation (“worst recession in 50 years”) is offered. But the notoriously immigration enthusiast WSJ makes no mention of low-skilled aliens taking those American jobs. Don’t tell me Americans won’t take low paying jobs. The lines for job offerings are long whenever hiring notices are posted.
“P&G isn't the only company adjusting its business. 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.”
Enter the Consumer Hourglass Theory:
“Citigroup calls the phenomenon the ‘Consumer Hourglass Theory’ and since 2009 has urged investors to focus on companies best positioned to cater to the highest-income and lowest-income consumers. It created an index of 25 companies, including Estée Lauder Cos. and Saks at the top of the hourglass and Family Dollar Stores Inc. and Kellogg Co. at the bottom. The index posted a 56.5% return for investors from its inception on Dec. 10, 2009, through Sept. 1, 2011. Over the same period, the Dow Jones Industrial Average returned 11%.”
Of course, the rich are okay (for now):
“Companies like Tiffany & Co., Coach Inc. and Neiman Marcus Group Inc., which cater to the wealthy, racked up outsize sales last Christmas and continue to post strong sales.
“Tiffany says its lower-priced silver baubles, once a favorite of middle-class shoppers craving a small token from the storied jeweler, are now its weakest sellers in the U.S. ‘I think that there's probably more separation of affluence in the U.S.,’ Tiffany Chief Operating Officer James Fernandez said in June.”
P&G is really scientific about this:
“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% 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.’…
“‘This has been the most humbling aspect of our jobs,’ says Ms. Jackson. ‘The numbers of Middle America have been shrinking because people have been getting hurt so badly economically that they've been falling into lower income.’"
Indeed, America is being humbled by a variety of ills—including the draining effect of our wars.
But the job losses that reduced and humbled our former bell weather Middle Class will surely continue unless we wake up, pass permanent E verify and begin to enforce our existing immigration laws which have allowed “immigration overload” .
Donald A. Collins [email him], a free lance writer living in Washington, DC. , is a long-time board member of the Federation for American Immigration Reform’s (FAIR). However, his views are his own.