A recent Wall Street Journal article on how US corporations are adjusting to a shrinking middle class, Ellen Byron writes:
In the wake of the worst recession in 50 years, there’s little doubt that the American middle class—the 40% of households with annual incomes between $50,000 and $140,000 a year—is in distress. Even before the recession, incomes of American middle-class families weren’t keeping up with inflation, especially with the rising costs of what are considered the essential ingredients of middle-class life—college education, health care and housing. In 2009, the income of the median family, the one smack in the middle of the middle, was lower, adjusted for inflation, than in 1998, the Census Bureau says.
The slumping stock market and collapse in housing prices have also hit middle-class Americans. At the end of March, Americans had $6.1 trillion in equity in their houses—the value of the house minus mortgages—half the 2006 level, according to the Federal Reserve. Economist Edward Wolff of New York University estimates that the net worth—household assets minus debts—of the middle fifth of American households grew by 2.4% a year between 2001 and 2007 and plunged by 26.2% in the following two years.
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.”
Over the past two years, P&G has accelerated its research, product-development and marketing approach to target the newly divided American market.
Commenting on corporate responses to widening US income inequality, Chrystia Freeland recently remarked in The New York Times:
We know one thing for sure: the gap between rich and poor in the United States has widened in the past 30 years. In 2007 the top 1 percent of earners took home 18.3 percent of national income — that is more than two and a half times their level in 1973, when their share was 7.7 percent. Those at the top haven’t enjoyed such a big slice of the national pie since 1929. The middle-class dominated nation that the Greatest Generation inhabited has become as polarized as the plutocracies of Latin America or as America itself was during its fevered Gilded Age.
The 2008 financial crisis and the prolonged economic downturn has eviscerated the consumption defense as ruthlessly as it has burst the credit bubble that allowed the middle class to feel richer than it was. Income inequality is today a fact of life, as essential to doing business as the rate of inflation: Proctor & Gamble executives study the Gini co-efficient, a technical measure of income inequality, to divine what is happening to their erstwhile middle-class consumer base, and have decided the best strategy is to give up on the center and to market instead to the top and the bottom.
Citigroup advises investors to design their portfolios around income inequality. It calls this strategy the “Consumer Hourglass Portfolio” and has created an index of companies that serve the rich and the poor while avoiding the vanishing middle.
Once income inequality has become a tool for marketing executives and stock pickers it becomes pretty hard to deny. But we can still argue over what is causing it.
Income also continues to dip in Washington state, according to a Sept. 22 Seattle Times article
Household income — in Washington state and across the country — declined in 2010, while the percentage of people living in poverty increased, as did the numbers of people without health insurance, according to data being released Thursday by the Census Bureau.
Results from the American Community Survey, successor to the census long form, detail a troubled economy, showing a downward trend that began in 2008 or earlier has continued or worsened in many larger cities and counties.
Children have been particularly affected. In Washington state last year, 13.4 percent of the overall population, including 18.2 percent of those under 18, were in households with incomes below the national poverty level.
Another sign of tough times for kids: Statewide, more than 47 percent of single mothers with children under 5 were living in poverty.
The percentage of Washington residents without health insurance rose from 13.4 percent to 14.2 percent last year. And the percentage of state households receiving food stamps rose from 11.1 percent in 2009 to 13.3 percent last year.
The survey showed Washington’s median income fell 3.1 percent in 2010 to $55,631, after a 1.8 percent drop the previous year.
Of the 19 Washington counties in the report, King County had the highest median income in 2010, at $66,174. But that was nearly a 4 percent drop from its median income in 2009.
Lewis County, in the southwest part of the state, had the lowest median income of the Washington counties reported, at $38,643 — more than a 10 percent drop from 2009.
Among those same counties, Yakima County had the highest percentage of residents under the poverty level in 2010, 24.3 percent, while Island County had the lowest, 9.4 percent.
via As Middle Class Shrinks, P&G Marketing Aims High and Low – WSJ.com.
UW Geography Professor Kam Wing Chan’s online commentaries on contemporary Chinese urbanization, educational attainment, transportation, and internal migration issues have attracted international attention. He has debunked the widely-celebrated phenomenon of China’s hyper development by showing 1) how Chinese students aren’t actually doing better on standardized tests than US students (showing how skewed the sample of reported Chinese test-takers actually is); 2) how Chinese bullet train project is ill-conceived, penalizes the poor, and is a potential disaster of corruption and shoddy workmanship (a fear of Chan’s that, sadly, has turned out to be quite true), 3) how prospects of Chinese urban prosperity are overblown by half because so many urban dwellers have second-class citizenship and are barely living above subsistence conditions, and, most recently in the Guardian, arguing that the rural poor are being being increasingly economically abandoned in China’s headlong rush into mega-urbanization.
A recent Wall Street Journal “Heard on the Street” column (“Bright Lights, Big Questions About China’s Urban Legends”, August 1, 2011), cites Chan’s work in this context:
“Urbanization is a cornerstone of China’s development strategy. But the relationship between a growing urban population and a sustainable growth path isn’t as straightforward as many investors believe.
China’s urbanization, and its beneficial effect on growth, is taken as an article of faith.
Concerned about a Japan-style collapse in China’s property sector? Don’t worry, a growing urban population underpins demand for apartments. Worried about China’s overreliance on investment as a driver of growth? Fear not, a growing army of city slickers will have higher incomes and consume more.
The trend in the official data appears clear enough. China’s urban population has grown from 19% of the total in 1980 to 50% in 2010. That is still some way off an urbanization ratio above 70% in many developed countries, so there is more to come. Urban per capita disposable income in 2010 was more than three times income in rural areas, and 86% of retail sales came from urban areas, so the transition to city life should support higher levels of consumption.
But as is often the case with China’s data, not all is what it seems. The crucial point is that rural residents can move to the city, but without an urban residence permit—known as an urban hukou—they are confined to the margins of city life. According to Professor Kam Wing Chan, an expert on China’s urbanization at the University of Washington, the share of China’s population that has urban residence rights is around 35%, substantially below the 50% of the population that live in the cities.
The 171 million migrant workers who fall into that hole have an average wage of around $3,600 a year, compared with an average of $5,700 for registered urban workers. That is more than they earned in the countryside. But although they might have built China’s glittering new residential compounds, living in dormitories in twilight zones on the edges of the city they are hardly likely to buy an apartment in one of them.”
Heard on the Street: Beware China’s Urban Legends – WSJ.com.
Professor Chan’s online webcast about Chinese economic growth and the growing economic gap between rural and urban populations
Mapping the Salem Witch Trials Benjamin Ray, the director of the Salem Witch Trials Documentary Archive at the University of Virginia, wondered why witchcraft charges spread so rapidly and widely in 1692, affecting 156 people — 15 times more than in any other incident — across 25 communities in Essex County, Mass. When he plotted the accusations on a digital map that showed their progression over time, it struck him that the way in which they spread mimicked that of a disease. The image at right is a single screen shot taken from an interactive map that traces the sequence of accusations from February through November 1692. It shows the moment at which the accusations began to spread rapidly, when the Rev. George Burroughs was accused on April 20, 1692.
Every day brings increasing proof that the humanities are going digital and spatial.
As today’s NY Times article on digital maps of the Gettysburg battlefield points out, “advanced technology similar to Google Earth, MapQuest and the GPS systems used in millions of cars has made it possible to recreate a vanished landscape. This new generation of digital maps has given rise to an academic field known as spatial humanities. Historians, literary theorists, archaeologists and others are using Geographic Information Systems — software that displays and analyzes information related to a physical location — to re-examine real and fictional places like the villages around Salem, Mass., at the time of the witch trials; the Dust Bowl region devastated during ; and the Eastcheap taverns where Shakespeare’s Falstaff and Prince Hal caroused.”
“Mapping spatial information reveals part of human history that otherwise we couldn’t possibly know,” said Anne Kelly Knowles, a geographer at Middlebury College in Vermont. “It enables you to see patterns and information that are literally invisible.” It adds layers of information to a map that can be added or taken off at will in various combinations; the same location can also be viewed back and forth over time at the click of a mouse.
On another front, David Rumsey, whose collection of more than 150,000 maps is one of the largest private map collections in the United States, recently announced his intention to donate it to the Stanford University Libraries for long-term preservation and scholarly access. With his growing online collection of more than 26,000 maps, available to all in high resolution and with expert cataloging, Rumsey is one of the most visible and important modern distributors of historical treasures for the common good. As Rumsey argued recently in his this week in his keynote address Reading Historical Maps Digitally: How Spatial Technologies Can Enable Close, Distant and Dynamic Interpretations to the Digital Humanities 2011 Conference
Maps are dense, complex information systems arranged spatially. While they share similarities with other visual artifacts, their uniqueness as spatially arranged visual information both allows for and demands special digital approaches to understand and reuse their content. Georeferencing, vectorization, virtual reality, image databases, and GIS-related tools all work to unite our eyes, minds, and computers in new ways that can make historical maps more valuable and accessible to humanists concerned with place and space over time.
Geographic Information Systems Help Scholars See History – NYTimes.com.