Middle Class Erosion, What Are They Still Buying…

American Dream

The American Dream

As the American Dream was a bit of a stretch even in its hay day is heaving hard while in the final throws of its death rattle as we look at continuing increases in foreclosures, year over year income erosion, loss of employment opportunities and oh yes we can’t forget hyper debt. However as the American Middle Class continues its stroll down this path of self destruction, it still a consuming monster and what is it buying?

Well today it seems to be trying anyway it can to buy back the dream, only this time around it really is only a “dream” as people are now forgoing their plush homes and fancy cars, and instead they are buying the implied “dream“.  Within this macrocosm we see these items are comprised of those things which allow for the escape-ism from the woes of the real world.  Be-it the dream brought by being the next “American Idol” or the perfect husband via the “Bachelor“, reality TV is the reigning king of the tube.  Here the former Middle Class is now seeking their fantasy in a virtual form from the “screen” be it big or small rather than living life large like in the past.  Instead they’ve traded vacationing in Cozumel for watching the “Smoking Gun” and its sponsor Tide detergent.

As in this new world of stifled income growth to the point of decay, the main focus for the remaining dollars is entertainment and goods which are the lesser of the same we use to have.  What is meant by the later is simple, as we the middle class demographic were once accustom to something which we can no longer afford due to the loss of our economic affluancy.  We will then seek a similar but cheaper version of the same item or experience.  In this way it is possible to convince ourselves that the more things change, the more they remain the same in our mind. While clearly a false hood on the surface, we have become very good at telling ourselves that hamburger is the same as stake as both are beef right?

Some two years ago at the start of the housing collapse, while having lunch with a good friend we entered into conversation about what industries or market sectors would benefit from this erosion. The first words out of his mouth were cosmetics, while surprised my response was why?  His explanation was that “people would still want to feel good about themselves and maybe even more so then normal as they wouldn’t have too many other material things to feel that way about and to this end would always find the financial means to do so“.  Throughout this time I’ve watched and sure enough those markets have still held solid and even pulled forward while others have slipped.

Here it’s becoming clear that lesser is now the “more” however not as in the past, where there was a stark decline when one abandoned their gas guzzling Cadillac alongside the road with an empty gas tank for a VW bug.  As here there is a clear difference in applied feeling between the Caddy and Bug.  In short feels strong as thought one did give up something.  Whereas if they were to purchase a “Yukon” and not a “Yukon-Denali” as both are “Yukons” correct, so where is the difference?  Here up-scale brand importance will be the losers and the “down-scale” will be the winner’s new game…



About Joseph Campbell

As a strong believer in the fact that "people work for people", it has been a life driver to better to understand the complexities of the various aspects which drive efficiency within this axiom, especially the concepts of leadership. Supporting this, I have been fortunate enough to having experienced this as leader on a global basis over the last decade and half. During this time it has been clear there are three core drivers being Life, Leadership and Economics.
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