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Business Success when there's no Middle Class

Discussion in 'General Entrepreneur Discussion' started by CPisHere, Apr 12, 2018.

  1. CPisHere
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    CPisHere Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    I've been thinking about where America is headed, and when I look 20 years into the future, the Middle Class will be crushed (even more so than it's already been the past 20 years). Public policies will encourage it, and technology will enable it.

    As a business owner, I don't want to be serving the Middle Class. And many of us are. The future is low priced goods/services to everyone, or super high priced goods/services to a small group.

    What do you think?

    *EDITED - removed the word Income Inequality because it makes people crazy.
     
    Last edited: Apr 12, 2018
  2. Paul Schuyler
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    Paul Schuyler Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER

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    Always tough to predict the future but I too think about this stuff all the time. A lot of predictions about automation and so on are pretty ominous with respect to the middle class as we know it.

    But there are some pretty solid trends. Freelancing is only on the rise, and depending on which study you choose to believe it appears the economy will be largely freelance-driven in 20 years or so. So are multi-skilled careers where one career changes into 3 or 2 with a specialty and so on. You know where the lawyer switches to become a programmer and then creates legal software. Job retraining, self-education, and freelancing are all pretty safe bets in my view. As are remote working tools (telepresence), individualized services (insurance), and whatever other shovels might serve these broad trends.
     
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  3. Kak
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    Kak Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    What do you believe income inequality is?

    Why do you think income inequality is a problem?

    Why do you think income inequality is growing?
     
    Last edited: Apr 12, 2018
  4. EsJay
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    EsJay Contributor Read Millionaire Fastlane FASTLANE INSIDER

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    Just yesterday night I watched Michael Moore's Documentary Capitalism I don't necessarily agree with all the points but had similar thoughts and raised quite a few serious questions.

    As corporates drive for profits and efficiency, specially with all automation, robotics etc and start dismantling employed middle-class I really can't imagine how economics will work in future society.

    If there are no consumers (aka middle class) how will corporations survive? Businesses's' own survival is very much dependent on strong earning middle class. If there is no middle class who will Walmarts, Targets and Fords will sell their products to? Only Ferraris and Lamborghinis (aka selling only to few) can't drive economies and is not a sustainable model.

    One possibility I see, is going back to past before industrialization which essentially was a fastlane society where most of the middle class had their own small businesses employing few people within each.

     
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  5. Kak
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    Kak Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Under what circumstance would there be no consumers?

    If the middle class (as compartmentalized and defined by who?) were gone, where did they go?
     
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  6. CPisHere
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    CPisHere Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    What's your deal with these questions? They don't feel genuine.
     
  7. jon.a
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    jon.a Legendary Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    You asked what people think.
     
  8. NuclearPuma
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    NuclearPuma Bronze Contributor FASTLANE INSIDER Speedway Pass

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    Question your assumptions.

    The lower class has shrunk and the upper class has grown.

    The shrinking middle class is people moving into the upper class.

    That is a good thing.
     
  9. JAJT
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    JAJT Ha Ha! Business Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    There will always be producers and consumers.

    I can't envision a first world society that doesn't have this.

    There's lot of disagreements about which way society is going, and how income inequality / unemployment will be handled going forward (due to things like automation - which is a genuine concern) but I don't think any model says "we run out of consumers and the rich sleep on piles of money while the poor all starve to death with nothing in between".

    Even the extreme-end concept of universal basic income where we just give cash to everyone out of taxes assumes people will still be able to support themselves and consume.

    Literally our entire society would fall apart if people weren't buying things.

    sh*t - even 1984 and Brave New World (two very opposite interpretations of a dystopia) kept production as a concept that needed to be maintained.

    Now - getting back to the original point of not wanting to sell to poor people - there's some logic in that. That's why "target markets" are a thing. Don't sell Ferraris to teenagers - sell them to retired Italians.
     
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  10. EsJay
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    EsJay Contributor Read Millionaire Fastlane FASTLANE INSIDER

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    I read articles few months back I think on NYT about technology threats to society.

    Just to give few examples Auto Drive Cars, once that technology matures (and it will) it will wipe out taxi drivers across the country. Cloud Migration is already impacting out IT Admin types jobs, Bettermint and alike will wipe out Financial Advisers jobs (their value aside), BoA already started piloting human less branches in few locations...I can give numerous examples.

    Yes new technology will bring new types of jobs but speed of change this time is much faster than anything seen earlier and probably anything society can absorb. As Walmart wiped out small shops, imagine it happening across multiple industries around same time. If so many people become unemployeed it directly impacts consumer buying power and will have cascading effect on multiple industries.

    That's the reason there is a faint early chatter in some Govts specially in Europe (even in countries like India) exploring UBI (Universal Basic Income) as an alternative..which can bring back stability to people and families and maintain some consuming power in society



     
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  11. Kak
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    Kak Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Why don’t you think my questions sound genuine?

    Do you think there’s no way someone could possibly question the palpability of income inequality?

    Do you believe everything you’re told to believe?
     
  12. JohnnyAppleseed
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    JohnnyAppleseed Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    A lot of people on here won't want to hear this but basic universal income will one day be an absolute necessity.

    Without it there will be everyday violence on the scale of the French Revolution. People with nothing to lose and no future will have no problem killing you.

    The way I see it is that technology is eventually going to enable a form of socialism that would be capable of keeping everyone comfortable. It kind of reminds me of how humans are portrayed in the wally movie:


    View: https://www.youtube.com/watch?v=s-kdRdzxdZQ


    I guess we'd have to develop a hierarchy where the major decisions are made by the producers??? Regardless the future will be very interesting.
     
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  13. CPisHere
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    CPisHere Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Income Inequality is the uneven distribution of income. Some Income Inequality is inherent in any system, particularly Capitalism, and not a problem in and of itself.

    America is near it's all-time high point of Income Inequality, and it has been rising for the past 30 years. Median wages have gone down for America's Middle Class.

    Extreme Income Inequality, where there is no wide distribution of income through a Middle Class, has LOTS of issues. It means there is not a large base of people with disposable income to sell to, making it harder to start/grow/own your own business. It means substantially less opportunities for the majority of children.

    I'm not complaining about this. I'm point out a Fact and suggesting we should put ourselves in position to succeed under such a system.
     
  14. NuclearPuma
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    What happened to the saddle makers with the invention of the automobile and motorcycle?

    Society moved on.
     
  15. CPisHere
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    CPisHere Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    No disagreement. The ratio is getting worse though.

    Yes, there will always be consumers but their level of disposable income will go down.

    I didn't say I don't want to sell to poor people. That's actually going to be the biggest growth market as the Middle Class becomes increasingly poor.
     
  16. CPisHere
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    CPisHere Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Many corporations, particularly Brick & Mortar retail of non-essentials, will not survive. It will be a largely Welfare state.
     
  17. Kak
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    Kak Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    You aren’t though. You are pointing out “facts” according to popular opinion. Not actual facts.

    Not that income inequality doesn’t exist... clearly it does. However the argument over it is an intentionally misguided focus.

    By the world’s standards, Americans are filthy rich. The number one problem among America’s poor are health issues associated with obesity. Yeah. One American “poor” person eats more food than 5 people in Venezuela... Which, as it turns out has extremely low income inequality.
     
    Last edited: Apr 12, 2018
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  18. CPisHere
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    CPisHere Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    Income Inequality is a fact, so are median wages - even if you find it misleading.

    Like I said, I'm not complaining nor am I suggesting to support Socialism or something. I'm pointing out that the Market is changing, and we as Business Owners should be prepared.
     
  19. Sagemoney
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    Sagemoney Bronze Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    I've pondered this question as well.

    What I truly believe will happen(im an optimist) is automation will of course eliminate thousands of jobs and the upper class will explode in wealth, but with that automation, goods will become insanely cheap and the 40 hour work week will be reduced to say 10-20 with more vacation time and ability to persue hobbies and freedom.

    The world will ironically start becoming more unscripted.

    When people think automation they default to dystopian elysium esque world. I see star trek honestly.

    No need for a car when automated drones drop off groceries, self driving cars to ride share to work or work remotely. Sure a few people will become trillionaires but obviously they deserve it because they've made society a more efficient and free place.

    So to sum it up, you have to stop looking at the rich as some evil class who will hoard wealth while millions starve to death aka Elysium. In reality most are just a bunch of problem solvers looking to improve humanity and with those improvements they gain wealth while society gains liberty. A win-win.
     
  20. Kak
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    Kak Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    I didn’t say it didn’t exist.

    Disparity of outcome exists because we have equal initial opportunity.

    You can’t have the one without the other.
     
    Last edited: Apr 12, 2018
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  21. CPisHere
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    CPisHere Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    We do not have equal initial opportunity, and disparity of outcome certainly exists with or without it.
     
  22. CPisHere
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    CPisHere Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    You can't even mention the word Income Inequality without people assuming you hate rich people. I don't hate rich people. I'm no Socialist.

    I'm a business man looking at where the market is moving. And my view is that you do not want to be relying on a large base of people with disposable income, because you will be serving a non-existent Middle Class and be out of business.

    If that's your current customer base, be looking to pivot or sell.

    Edit: There are also huge implications for Real Estate. I don't want to own commercial retail property, or middle class rentals. I want to own high-end homes or low-end apartment complex/rentals.
     
    Last edited: Apr 12, 2018
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  23. Kak
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    Kak Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Disparity of outcome is what makes a society free.

    Can you give me a macro example of disparity of opportunity? (in the USA)

    What is middle class? What bracket did they decide to call the middle class this week?

    How is median income more important than average income?
     
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  24. Kak
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    Kak Legendary Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

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    Dude. You keep doing this drive by. That is why I keep asking questions.

    Of course you are supposed to adapt to changing business and market environments, however, you are using your EFFECT that "the middle class will disappear" to justify the cause "income inequality". You haven't even attempted to prove the assumptions... You just call them FACT and move on.
     
    Last edited: Apr 17, 2018
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  25. CPisHere
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    CPisHere Silver Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    You seem to be stuck on some political perspective. That's not my take.

    My take is simply that the pool of potential customers with disposable income is shrinking.

    You must define disparity of opportunity very rigidly - there are not laws that prevent opportunities for certain people. But some people are born smarter, better looking, etc than others. Some kids go to private school with millionaire parents that will fund their ideas. Etc, Etc.