Reagan Haynes’ report yesterday on MarineMax’s experience that the middle class is a dwindling part of its customer base is disturbing, especially when viewed in the context of the sluggish recovery from the sales plunge of 2008-09 for our industry.
While it’s very good news that CEO Bill McGill sees the loss being offset at MarineMax by so-called upper-middle-class and high-net-worth buyers, it also makes one pause to recognize most marine dealers aren’t MarineMax in size, strength or financial capability. Indeed, for the overwhelming majority of dealers, the loss of the middle class is likely to be the reason our industry’s overall growth has been single-digit since 2010.
It begs the question: Will there be a middle class in our boating lives again? After all, until boating actually stopped growing back in the early 2000s, it was the middle-class family that fueled our industry’s good years.
Umair Haque is the director of Havas Media Labs, an author and ranked one of the world’s most influential management thinkers by Thinkers50. He is also considered by the Harvard Business Review as one of the 10 must-reads in 2016.
Haque contends that the recent vote for Brexit reflects the fading middle class. Median incomes in Britain and America have been stagnant because wages no longer improve in line with productivity.
In the U.S., living standards have fallen for all but the wealthiest. The majority of kids in public schools now live in poverty. Labor’s share of GDP has fallen, and more goes to the people earning the highest salaries, now a subject for political election rhetoric.
Americans has long been primarily middle-class families, neither rich nor poor, but comfortable enough and able to afford a boat. But that’s changed, according to the Pew Research Center. As of 2015, middle-income households have become a demographic minority.
Moreover, the trend could be so firmly established now that it may well continue. The U.S. has experienced "a demographic shift that could signal a tipping point," say Pew researchers.
It’s easy to point to failed political leadership. Lord knows we have that on steroids! But the truth also is that today’s business leaders have failed, too. According to Haque, the middle class is the bellwether of prosperity, its truest measure. Business needs to play a more active, engaged role.
Brexits don’t happen in thriving economies. They happen when the pie is shrinking. Haque contends that people who have good jobs that allow them to do something useful and that pay livable wages with good benefits should be the goal.
So, what Bill McGill is seeing at MarineMax is real enough. But the reality is that counting on just high-net-worth buyers for their future will likely not work well for the majority of dealers. We really do need to turn around the implosion of the middle class.
For the past two weeks our TVs have been blasting out political claims that they’re the ones to restore the middle class. It all makes me realize that we are in the midst of a critical election cycle, a time when selecting leadership from the White House down to the Statehouse may never be more important than it will be this November.
Clearly we need leaders who recognize that government policies must change. But we also need the nation’s businesses to address their role in turning around the middle class while it still can be accomplished.