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Tuesday, November 5, 2013

Growing U.S. Poverty and Advertising


I do not watch a great deal of television. However, I do watch CNBC and Bloomberg Business every morning plus I read the business press quite aggressively. Invariably, one hears or reads comments these days from commentators or columnists saying “the United States is now sustaining moderate economic growth.” Is it true? Perhaps. The one word you almost never hear from anyone these days is poverty.

Last fall, I watched the televised debates for many Senatorial and House races, and, of course, the presidency. Only Congressman Paul Ryan brought up the issue of poverty in his debate with Vice President Joe Biden. No one else mentioned it anywhere and I am, by some measures, a political junkie. Had it happened, I would have seen and heard it.

You rarely see it in newspapers or TV reports either. I would forecast confidently that less than 1% of today’s news coverage is devoted to the subject of poverty.

Yet, it is an epidemic that shows little indication of receding even though we are allegedly several years out of The Great Recession of 2008-2009. I have put together a number of factoids from various sources that I would like to share with you:

--52 million Americans are on food stamps. Most of you who read this blog lead fairly comfortable lives with jobs in media, advertising, or communications. Do you even know someone personally who is on food stamps?

--Some 1.2 million public school students are homeless. This is a national disgrace.  Again, do you know anyone who is homeless?

--The U.S. Census Bureau states that one out of six Americans is living in poverty. This level is back where it was when Lyndon Johnson began his administration’s “War on Poverty” in the mid-60s. Define the poverty line? It is currently pegged at $23,492 for a family of four.

--Half of all American children before they reach 18 will live in a household where food stamps are used at some point.

--Some demographers say that 150 million Americans can now be described as “poor” or “low income.”

--The number of working poor is soaring. One out of four part time workers is living below the poverty line according to an Associated Press survey. And, 25% of American workers have jobs that pay less than $10 an hour.

--As I write, the Dow Jones Industrial Average keeps chugging along and flirting with record highs almost daily but median household income in the U.S. has declined for five consecutive years.

--Food pantries and soup kitchens now serve some 37 million people per year. Many use these charitable groups to supplement their food stamp allowance. Charities are bracing for an avalanche of demand if the federal government cuts the food stamp payments.

--The median salary in the U.S. for a full time worker is $34,000.

I tell you all this not to attack the major political parties or to offer some simplistic solution to this mess. Rather, I pose a question to all marketers that you need to consider--have you adjusted your product mix, pricing, and advertising messages to reflect the new reality of significant poverty in America?

Why are the Dollar stores doing so well in terms of growth relative to the giants such as Wal-Mart and Target? It seems clear to me that many people are failing out of the middle class despite the apparent economic recovery and go to the Dollar stores out of necessity.

Also, the government tells us that the unemployment rate is drifting down to a current 7.1%. Analysts admit that this is helped by many discouraged workers dropping out of the workforce and are thus removed from the unemployment calculation. Others talk of underemployment and say that authentic unemployment could be double the published figure.

There is another group that no one talks about. Some five to six years ago, hundreds of thousands of people lost jobs paying $100-130k. They were far too young to retire and eventually virtually all of them found new jobs. Talk to them and you find that many took jobs at $60-80k per year. They had no choice. A few have told me to my face that they will never again earn what they did in 2008. So, the government lists them as employed and demographers label them as middle class but they have underdone a huge adjustment in lifestyle and their hopes and dreams have been shattered.

If you look at the commercials and print ads today, they are still largely messages aimed at those of us living the good life. It is not for the top 1-2% that gets all the press but many of the messages do reflect the lifestyle of the top 10%. Perhaps the ad community needs to rethink things a bit. How does one craft a message for a mainstream product when the society appears to be downwardly mobile?

The business news smothers us with coverage of the Twitter Initial Public Offering and when Apple launches a new phone and we see crowds lined up to buy it, we are lulled in to not seeing what is really going on in our country. Things are going just fine for most of us in advertising and marketing.  Much of the rest of the country is struggling and we do not even see it.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

2 comments:

  1. One statistic that has stuck with me after reading this post is "half of all American children before they reach 18 will live in a household where food stamps are used at some point."

    I cannot believe I was so unaware of how intense the issue of poverty really is in our country. I knew it was a problem, but not to this extent. Ignorance is bliss they say, I guess.

    I look forward to discussing this blog post in class today and relating it to consumer behavior.

    ReplyDelete
  2. Yes, those of us living comfortable lives seem totally unaware of what is happening perhaps only a few miles away from us.
    Thanks for your interest in Media Realism.
    Don

    ReplyDelete