---------- Forwarded message ----------
Date: Mon, 6 Apr 1998 13:22:24 -0500
From: Doug Hunt <[EMAIL PROTECTED]>
To: [EMAIL PROTECTED]
Subject: The Care and Feeding of the Rich
By ROBERT B. REICH
April 05, 1998
The Care and Feeding of the Rich
BOSTON -- Recently, U S Airways removed a row of coach seats in each wide-body
plane to make room for a new, luxurious business-class service.
The distance between rows in the new section is 55 inches, compared with 31
inches in coach. Other airlines are also expanding their accommodations for travelers
in business class, as well as in first class.
The ranks of America's affluent are growing, and the market is responding --
creating superior spaces and services for them.
But unlike the old moneyed class a century ago whose languid extravagances
created the Gilded Age, the new affluent are a business and professional elite who
are in constant motion -- investment bankers, corporate lawyers, jackpot
entrepreneurs, real estate developers, entertainment moguls. They are money-rich but
time-poor.
Rather than spend their fortune on fox hunts or long cruises, they spend it on
necessities, like flying from city to city. Yet because they have so much money to
spend on what they need, and so little time for anything else, the marketplace is
quickly transforming their necessities into extravagances. First- and business-class
seats now account for more than 22 percent of the airlines' domestic passenger
revenue, up from 9.5 percent in l987, according to the Air Transport Association.
No wonder there has been a growth in luxury services at the front of their
planes. The new elite also demand premium ground transportation, which explains the
surge in limousine services and sales of luxury cars. These people have to live
somewhere, so the residential market is quickly shifting to luxury apartments and
co-ops.
In this new economy, the middle class is getting squeezed, sometimes literally.
Wherever space is limited, a larger portion of it is going upscale. Expanding the
front of the plane means less legroom in coach class, and the seats are narrower.
As the cost of real estate soars, the middle class is being pushed out. In New
York City, two-bedroom apartments that went for $240,000 just two years ago now cost
$300,000 and up.
Not only do the new elite get more space. They also get more attention. The front
of the plane contains far more flight attendants per person than in coach, and they
respond to "call" buttons more quickly. The airline's V.I.P. lounge is staffed by
friendly souls who speed passengers through check-in lines.
Limousine services answer the phones more quickly than taxi companies do, because
they're better staffed. Luxury-car dealerships have more mechanics on hand, so the
wait for servicing is shorter. Increasingly, the quality most sought after by the
new elite is personal care.
What makes an apartment truly deluxe is the custodians who respond quickly. What
distinguishes the high-end retail stores from the mass-market department stores is
the abundance of salespeople who hover tactfully.
The best hotels have platoons of obliging clerks and charming concierges.
And the new elite has no shortage of specialized care -- personal trainers,
masseurs, physical therapists, guides, counselors, decorators, planners and advisers
to make their lives and bodies more efficient. The Bureau of Labor Statistics has
estimated a 76 percent increase in the number of physical therapists between 1990 and
2005; in this same period, 40 percent more gardeners and groundskeepers, and 39
percent more restaurant cooks, waiters and hotel staff. Productivity isn't growing
much in this large and expanding sector of the economy, because the quality
of personal attentiveness improves when there are more people available to
provide it.
Meanwhile the squeezed middle is getting less personal attention, in case you
hadn't noticed. As the labor market moves upscale, whatever services are still
available to the middle are becoming automated and digitized.
Remember when telephone operators and bank tellers were human beings instead of
machines? By the year 2005, the number of bank tellers will have dropped by 25
percent from the 1990 level, switchboard operators by 24 percent and service station
attendants by 17 percent. Personal service is just too expensive these days. We'd
rather get the bargain-basement air fare, without the frills. Forget full-service
pumps. We'll take the cheap gas.
Here is the irony.
Most of the tens of millions of personal-attention jobs created in recent years
to cater to the new elite are being done by the same middle that's being squeezed in
the back of the plane.
They used to be bank tellers, telephone operators, garage mechanics and factory
workers. Their work had often benefited people like themselves, who might even have
lived in the same neighborhoods.
But now they've been pushed out of the old jobs and into new jobs whose value is
measured by the quality of their attentiveness to people who live much better than
they do, and better than their neighbors.
The old moneyed class of the Gilded Age had servants from the other side of town,
of course, and the servants cleaned rooms and drove carriages they never could have
afforded for themselves.
But large-scale industrialization gradually changed all this, creating a mass
market for mass-produced goods and standardized services, while building a huge
middle class along the way.
That was the great achievement of modern capitalism, and it strengthened our
society as well as our economy.
The emerging economy isn't taking us backward, but it does seem to be moving us
toward a new kind of social divide.
As long as the buoyant economy continues to lift most of us, no one's
complaining, at least not very much. But what happens when the tide goes out?
Robert Reich, a professor of social and economic policy at Brandeis University's
Heller Graduate School, was Secretary of Labor in the first Clinton Administration.
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