Barrett Rainey's Second Thoughts

Well – yes and no. There’s still the regular, “low cost” version. But there’s also the new Tampon “Radiant” which costs 59 percent more per unit and comes in “designer packaging and wrappers.” Same product inside but a new look on the outside. As I said, “yes and no.”

Then there’s the new Bounty “Dura Towel” with thicker plastic packaging and embossed print resembling a dish cloth. Procter & Gamble says it’s “3X cleaner than a germy dish cloth – fresh and clean.” It’s also a nickel-a-square-foot more expensive – nearly double the cost of regular Bounty towels still made for the poor folk. Same paper. New design is all.

P&G has a new Cascade “Platinum” dishwasher soap on the market called “the ultimate clean for dishes” that “keeps the dishwasher sparkling.” Costs 12 percent more than the regular stuff. There are the new Tide Pods for “a great new way to wash clothes” for the rich and a new, lower-priced version of Tide called “Simply Clean” coming for the rest of us. Same basic stuff.

Yes, Virginia. There’s a point here. And it’s this. Major companies have been watching the spending patterns for the upper and middle classes. And those patterns are heading in starkly different directions. The U.S. Census Bureau figures our national “real median household income” in 2012 was $51,017. That figure is – wait for it – 8.3 percent lower than 2007 and 9.0 percent under the income peak in 1999.

Boiling down all the numbers, the middle class has less buying power – is buying less – and is buying cheaper. But the “upper class” is willing to pay more for what’s being hawked by manufacturers as “superior quality” or “top-of-the-line.” You know. Some guy buys a Lexus while the rest of us buy Toyotas. A lot of the same engineering but better packaging.

And here’s the kicker. By 2011, the Moody’s Analytics survey figured the top 5 percent of Americans – by income – accounted for 37 percent of all consumer spending. More than a third of all of it. For the rest of us – the “middle” 80 percent – we spent less than 40%.

Most of the so-called “upscale” products are really quite the same as they’ve always been. But repackaging, adding some flowers or a printed pattern, sprucing up the wording on the box and using flashy TV ads amount to a premium cost for the same old stuff inside. Seems a 20 percent markup is a small price to pay for “luxury” and a middle class feeling that “we’re keeping up.” At a cost. But we aren’t.

For the rest of us, there’s always the “bargain brands” or coupons. So, the question is “What economic recovery?” Are you still shopping at Nordstrom’s or have you seen more of your friends at the Dollar Store?

There’s more from the Census folks. About 22 percent of households are experiencing one or more “hardships” fulfilling basic needs – making mortgage payments or the rent, being evicted, not paying for utilities, not seeing a doctor or dentist or even shortages of food. Between 2005 and 2011 – two years after the recession “ended” – the number of households not meeting “essentials” went up to 16 percent of ALL households.

And food stamps? Looking at 2012 over 2011, a 13 percent increase year-to-year – about 15 million more households. And that was on top of an 11.9 percent increase between 2010 and 2011.

The state with the highest percent of participation in food stamp usage? Glad you asked. Oregon. In 2011, 18.9 percent of all Oregon households got ‘em. And there’s more. Seventeen states – concentrated in the West and Northeast – had a higher participation rate in percentage of households receiving public assistance than the national average. Much higher. And the bastards in Congress just saw to it another $4 billion in food stamp help was just cut from the program.

Not a pretty picture is it?

Our folks in Congress are standing squarely as obstructionists to private sector efforts to get our national economy up off its back. To some extent, we are – despite a government that has failed to help. But, for reasons I fail to understand, the good guys refuse to steam-roll the bad guys though they outnumber the miscreants 10 to 1. Or more.

So – despite our best citizen efforts – our vaunted middle class is falling through the economic floor we’ve so long enjoyed. Folks below whatever economic line you want to use are being shoved further into the hole. But the ones with the bucks – the ones controlling the largest majority of our national buying power – they’re doing just fine, thank you very much. Their clout is greater than ever before.

So great a company named “Dean and Deluca” is making a fortune with a new product aimed squarely at the top of the market. D&D is selling premium ice cube spheres “individually carved from a 300 pound block to ensure flawless quality and a zero-taste profile.”

How much, you ask? Just $75 a 10 cube bag. Hell of a deal!

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