Two publications have recently focused on economic factors that may well result in societal changes, and which are therefore significant for ski industry planning. One was an article by John Cassidy entitled “Who Killed the Middle Class?” in the October 16 issue of The New Yorker; the other was a special issue devoted to “The Rich,” of the Magazine Section of the Sunday, November 19, edition of The New York Times.
In the first, the answer to his question is not provided, but the author does a brilliant job of demonstrating the murder and producing the corpus dilecti for examination and autopsy. We in the ski industry ignore the significance of this economic and sociological reality at our peril.
In the second, 15 separate articles—some funny, some pathetic, some serious—examined various aspects of today’s rich: their interests, their outlook, what their kids are like, how they indulge themselves. Since ours has always been an expensive sport, we cannot afford to ignore the attitudinal shifts among the folks who have the means to participate. Nor should we fail to study the possible societal shifts resulting from the realignment of wealth that is occurring in this country.
As we struggle to understand our industry’s future—the mandate for NSAA’s convention in Charleston, S.C., in May—we must grasp more than the mechanical projection of ethnic and other demographic statistics. We must also come to grips with the things that are shaking up a lot of the comfortable assumptions we grew up with and assumed almost as our birthright.
The message of the New Yorker article is that the post-WWII period, that started in 1947 and extended to roughly 1973, saw extraordinary growth, unapproached in any other country. It was a growth in real income for the vast majority of the U.S. population, evenhandedly increasing the spending power across the spectrum from the lowest to the highest income levels. That period, which Cassidy calls “the Golden Age,” coincides with the golden age of skier growth.
Not only was wealth created in terms of capacity to invest in real estate and individual homes, but also wealth in terms of disposable dollars. Most importantly, it created the reality of what people self-described as “middle class.” As the author points out, people who were actually working class thought of themselves as middle class. This comfortable concept, unique to North America, transcended economic levels, race and also labels such as blue collar, white collar and professional. Middle class came almost to be a state of fulfillment—the surety that you would earn more next year, that your kids would do better than you, just as you had done better than your parents.
Contrast this, author Cassidy says, with the 20 years that followed. Whereas in the 1947-73 period everyone had participated equally in income growth, in the 1973-1994 period, only the very rich gained. The bottom two-fifths of the population lost ground (earned less in inflation-corrected dollars); the next two-fifths stayed close to even; and only the top one-fifth gained—and even they gained at less than one-half the rate of gain they had enjoyed in the earlier period.
With this, Cassidy argues, those comfortable assumptions of middle classdom were shattered and a new reality—as yet unacknowledged by the politicians—set in: the middle class was kaput.
Of the array of themed articles in The New York Times Magazine, the most chilling was by Lester Therow, a professor of economics at M.I.T. His theme was “How much inequality can a democracy take?” The blurb read: “The income gap in America is eroding the social contract. If the promise of a higher standard of living is limited to a few at the top, the rest of the citizenry, as history shows, is likely to grow disaffected, or worse.” Therow suggests the somewhat apocalyptic conclusion that the world of the rich might crumble.
The economic scene also makes one wonder. The Dow bursts through the 5000 level, productivity is up, inflation remains low, the dollar strengthens, the national deficit is under control and scheduled to be reduced. So good things are happening, right? To everyone, because a rising tide lifts all boats, right?
Tilt! As already noted, only those in the upper income levels are benefiting, with the majority either standing still or slipping backwards. And we find a political will to lock this situation in with tax breaks only for people who are succeeding financially.
For the short term I also worry about bodies. As a metaphor for my worry, consider the recent Chemical/Chase Manhattan bank merger, resulting in the loss of 12,000 employees. There continue to be more such mergers and downsizings. Over the past five years, we are looking at close to half a million jobs lost in the banking industry alone.
Then there were the recent notifications sent to 77,800 AT&T managers enticing them to step down or face uncertain futures.
If these were agricultural jobs I would be less concerned, but a recent Department of Labor report shows that almost one-quarter of all permanent layoffs during 1991-93 were in the managerial and professional ranks, compared to just 13 percent a decade earlier. It should not be necessary to point out that one would expect to find a lot of skiers and potential skiers in those ranks of laid-off bankers and AT&T managers—to say nothing of those from other such industries. And their spouses, their kids, their friends. Some may land on their feet and remain skiers. But I wonder what percentage.
As the Department of Labor report summarized: “Even for managers and professionals, being at the top of the earnings ladder appears to provide less protection when budgets become lower.”
What does all this mean for skiing? It is hard to say definitively. If truth be known, the sport was probably always fueled by the participation of people enjoying incomes in the top quintile, or 20 percent, of the spectrum. And, although the sport once may have enjoyed some participation by those lower on the economic scale, it was probably never a significant percentage of the whole. As pointed out, skiing has always been expensive.But there may have been an attitudinal difference when the middle class was alive and well. After all, they thought they could be skiers if they wanted to be, and certainly that their kids might well take up the sport. But if the assumptions and dreams got deadened by reality, mightn’t one expect a shift in the marketing potential for a sport like ours?
With the top five percent of American households receiving 20 percent of the country’s income, and the top fifth receiving almost half—and with the trend accelerating—it would seem to be a no-brainer as to where our industry’s marketing efforts must go. But there are probably some downsides to becoming so dependent on the super-rich. Among other things, the super-rich, as well as those who aspire to be, are often more in love with work than they are with recreation. And when they can be distracted, ours is but one of so many distractions in which they can afford to indulge.
Our industry will also have to be alert to whatever downsides there may be to having the sport increasingly identified as an elitist sport. It is a gnarly image to manage.
All these new realities, plus the realities of what Cassidy called “a less homogeneous and more inequitable society,” and the fundamental shifts in the ethnic mix (see page 62) give us all a compelling reason to search for answers at Charleston and beyond. Despite what some may see as the underlying gloom of my concerns in these musings, I would say the ski industry can be well positioned for the future—if we learn to change and adapt. Mainly we must beware of comfortable assumptions.
