Catering to the rich and poor
Companies are choosing to make products for the highest and lowest income levels -- not the gray area in between.
The middle class? History. The housing market bust and the high unemployment rate have taken a huge toll on what was once a steady middle class (families with annual incomes of between $50,000 and $140,000).
Now, companies are changing their focus to cater to the rich and the poor -- but not that crumbling area in between.Tiffany (TIF), for example, is doing gangbuster business selling to the wealthy, but the lower-priced silver items targeted to the middle class are its weakest sellers, The Wall Street Journal reports.
Will President Obama's jobs plan help the middle class? Check out the following video.
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Target (TGT) and Wal-Mart (WMT) used to do well with its more expensive items, such as furniture and clothing. Now, they're focused on food and basic household gear in an effort to keep customers from fleeing to dollar stores.
Some companies are going for both groups. Procter & Gamble (PG), for example, makes the pricey Olay Pro-X skin care line, but it also touts the cheap Gain dish soap.
You can see this divergence more clearly in the Gini index, which measures income inequality. In 2009, the index showed a 20% rise in income disparity over the last 40 years, the Journal reported. The U.S. level was on par with the Philippines or Mexico.
That income disparity means that retailers like Coach (COH) and Estée Lauder (EL) are doing just fine. So are Family Dollar Stores (FDO), whose shares are trading above $50, and Dollar Tree (DLTR).
But the companies that once reached out to the broad swath of middle America are having a tougher time. That could bring about strategy changes for Kraft (KFT) and Johnson & Johnson (JNJ) in addition to what we've already seen at Wal-Mart and Target.
VIDEO ON MSN MONEY
Bottom line: reduce the deficit by firing half our elected officials, giving power back to the individual and the states! The Federal Gov't has trampled our individual freedoms, but that's another subject... Require drug testing for welfare and food stamps. Require elected officials to live on welfare and food stamps for the first year of office. Significant reforms sure to follow...
The disappearing middle class...Makes me wish I learned some better survival skills like raising my own food. Bank tellers and retailers won't be high demand when the economy crashes. Sewing, farming, agriculture, basic construction however will matter.
At least the military taught me to shoot and a good bit of medical skills...that may come in handy I suppose. Speaking of the military...I swore to defend the constitution against enemies foreign and domestic. Is it just me or are others starting to perceive the Washington DC elite as those "domestic" enemies that the nation needs to be defended against? I seriously can't think of a bigger threat to the constitution, the nation's well being or the american way of life than the politicians...of both parties....Oh the irony, if it wasn't so sad it would be funny. I have seen the face of the enemy and he is us.
Well, there you go; just as the Republicans predicted, the wealthy are spending their tax cut and stimulating the economy... at Tiffany's.
Where did the middle class go? Overseas, where most all the middle class jobs have gone! Duh!
The Magical Shrinking Package:
I have much to say about the economy, unemployment and more, but I would
like to discuss only one topic today...the new and improved shrinking
package. I mean those items we bought at our grocery stores five years
ago that now seem to have magically shrunk. First it was the toilet
tissue you buy. Have you noticed that the "big" roll is the same size
as the old roll but more expensive? After that, every item we buy now
has become smaller and more expensive? The straw that broke this
camel's back was the Kleenex tissue and the Bounty and Brawny paper
towels. I hope that you, the reader of this editorial, have noticed
this too. Only now, since Wall Street and those large corporations are
hurting too, everyone is talking about a "new" recession. I believe
that we never were out of the "first" recession and I must have faith
that you and I will write or e-mail our President and Congressmen and
Women in Washington and let them know that the average person will not
be able t o withstand this much longer as the camel's back is almost
republican president in 2012=revolution from the poor and non existant middle class. republicans, george bush, killed the middle class with tax cuts two the rich, two wars and supporting raised oil prices...his family does own an oil company. and cheney, the war profiteer is still laughing at what he got away with. cleptocracy years.
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