Blow and Nocera

In “The Morose Middle Class” Mr. Blow says the “true engine of America’s economic growth” sure seems to have stalled.  Well, sweetie, when there’s a concerted effort to move wealth upward and away from that “true engine” the engine must be expected to stall.  Mr. Nocera is all fizzy and excited.  He has a question in “How to Build a Spoon.”  He says Manufacturing is making a comeback in Brooklyn. Have you seen the Spuni?  I hate to break this to you, Joe, but that thing looks very much like the silver baby spoon my mother fed me with about 67 years ago.  There really is nothing new under the sun.  Here’s Mr. Blow:

The Middle Class is in a funk, its view of the future growing dim as fear rolls in like a storm.

An Allstate/National Journal Heartland Monitor poll released Thursday found that while most Americans (56 percent) hold out hope that they‘ll be in a higher class at some point, even more Americans (59 percent) are worried about falling out of their current class over the next few years. In fact, more than eight in 10 Americans believe that more people have fallen out of the middle class than moved into it in the past few years.

The poll paints a picture of a group that is scared to death about its station in life.

By the way, 58 percent of respondents in the poll viewed themselves as either middle class (46 percent) or upper middle class (12 percent).

According to the poll, Americans see a middle class with less opportunity to get ahead, less job security and less disposable income than the middle class of previous generations.

Respondents were most likely (52 percent) to say that losing a job would put them at the greatest risk of falling out of their current class, followed by an unexpected illness or injury in the family.

Most of those polled believe that higher education is the key to staying in the middle class, but many worry about its prohibitive cost and inaccessibility.

And who did most of them say is responsible for making it worse for the middle class? Congress, chief executives of major corporations and big financial institutions.

Of those who blame politicians, there is some evidence that Republicans get more of the blame than Democrats. A CNN/ORC poll released last month found that 32 percent of respondents thought that Democrats favor the middle class compared with 27 percent who believed the same of Republicans. Sixty-eight percent of those polled believed that Republicans favor the wealthy, compared with 24 percent who believed that Democrats do.

This anxiety about a shrinking middle class is understandable.

A Pew Research Center study, “The Lost Decade of the Middle Class,” released in August, found that “since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some — but by no means all — of its characteristic faith in the future.”

According to the report, “Fully 85 percent of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living.”

The report continued:

“Their downbeat take on their economic situation comes at the end of a decade in which, for the first time since the end of World War II, mean family incomes declined for Americans in all income tiers. But the middle-income tier — defined in this Pew Research analysis as all adults whose annual household income is two-thirds to double the national median — is the only one that also shrunk in size, a trend that has continued over the past four decades.”

It’s important to note that many of the people who describe themselves as middle class would not be placed under that rubric by most objective observers. For instance, the Pew study found that 35 percent of people making $30,000 and under and 46 percent of those making $100,000 and over self-identified as middle class. (Meantime, six percent of those making $30,000 and under self-identified as upper class, and six percent of those making $100,000 and over self-identified as lower class. Go figure.)

As Pew pointed out, over the last decade, “middle-tier median household income” fell and median net worth plummeted, and people in the middle class said it was becoming harder to maintain their lifestyles.

To add insult to injury, another Pew report, released this week, found that “during the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7 percent of the wealth distribution rose by an estimated 28 percent, while the mean net worth of households in the lower 93 percent dropped by 4 percent.”

As The Washington Post reported in September after the release of a frightening Census report: “The vise on the middle class tightened last year, driving down its share of the income pie as the number of Americans in poverty leveled off and the most affluent households saw their portion grow.”

The wealthy have come surging back, riding record stock market highs, but many in the middle class are at best treading water and at worst sinking.

In his State of the Union speech in February, President Obama said that the “true engine of America’s economic growth” is “a rising, thriving middle class.”

It certainly looks as if that engine has stalled.

Now here’s Mr. Nocera, all fizzy and excited:

I have seen the future, and it is in the Brooklyn Navy Yard.

I’ve seen young entrepreneurs creating companies that actually make things — not some digital app (not that there’s anything wrong with that!) — but actual products you can hold in your hand. I have seen prototypes being churned out on 3-D printers. I have seen the Navy Yard’s 300-acre complex of buildings — whose disrepair was once a symbol of manufacturing’s decline — become a symbol of manufacturing’s revival.

Sorry to sound so highfalutin, but it is easy to get carried away after you’ve been to the Brooklyn Navy Yard. It offers something you don’t often feel these days when you contemplate the future of the American economy, with its loss of middle-class jobs and the widening of the income gap.

It allows you to feel hopeful again.

I went there this week because I had gotten interested in Spuni, a little start-up that was operating out of a development called New Lab — essentially shared space in one of the Navy Yard’s buildings for entrepreneurs and artists. (To be more precise, David Belt, New Lab’s developer, is using temporary space in the Navy Yard to house his tenants, while he refurbishes some 85,000 square feet in the old naval machine shop.)

Spuni is a product dreamed up in the Boston kitchen of Isabel and Trevor Hardy. The 30-something parents of two small children, they got to mulling the mess that William, their first child, made as he was transitioning from a bottle to a spoon.

“We both have design backgrounds,” said Isabel, “and we were trained to solve problems by using simple design solutions.” The problem, the Hardys concluded, was that spoons are poorly designed for small children. As they bite into the spoon, the food in the back half has nowhere to go but the floor. One day, as they were kicking around this idea with their friend Marcel Botha, a serial entrepreneur who shares a South African heritage with Trevor, they came up with the idea of a flatter-shaped, more ergonomical spoon that would allow a baby to suck the food off it.

Trevor and Isabel have full-time jobs. Once upon a time, their little idea would have remained just that — an idea. But Marcel, who had considerable small-manufacturing experience, was convinced that they could create a company to make the Spuni, as they quickly named it. First sketched in the spring of 2011, the Spuni saw its first prototype within two months. Using a 3-D printer, they went through a half-dozen prototype iterations until they felt they had the Spuni and its packaging exactly right.

To raise capital, they relied on crowd-sourcing, generating almost $38,000 by preselling Spunis on the Web site Indiegogo. Marcel, meanwhile, cut a deal with a small German manufacturer he had used before. When we spoke on Friday, he was just returning from Germany, where he had supervised the first quality tests. Within weeks, some 8,000 Spunis will be available for purchase. Marcel expects to be manufacturing 600,000 Spunis within a year’s time. If all goes according to plan, Spuni will be churning out around one million spoons a year by 2015.

The role of the Navy Yard is as an incubator of companies like Spuni. Andrew Kimball, who runs the Brooklyn Navy Yard Development Corporation, a nonprofit with a 99-year lease from the city, told me that between public and private investment, around $1 billion has been raised to make the Navy Yard a destination for small entrepreneurs and other members of the creative class. According to a recent study by the Pratt Center for Community Development, the companies in the Navy Yard have been responsible for $2 billion in direct economic output and another $2 billion in indirect economic benefits. Kimball says there is a waiting list of 150 companies trying to get space in one of the Navy Yard’s buildings. “It’s cool to make things again,” he said.

Still, for all this glorious activity, the Navy Yard companies employ only 6,400 people. That’s up from 3,600 in 2001, but it is a far cry from the 70,000 men who once built ships during the Navy Yard’s muscular manufacturing heyday. That, of course, is the downside of the manufacturing revival in the U.S. — it simply doesn’t create the number of jobs that the old-style assembly lines used to. When I asked the Spuni founders how many employees they would need in the U.S. if they got to 600,000 in annual production, the number stunned me: 10. In Germany, the factory, at peak production, would probably not need more than 20 employees.

Marcel told me that his goal is to create a small manufacturing center in the Brooklyn Navy Yard. He would like to employ 100 or more people and produce a variety of products, not just Spunis. This is the model of modern American manufacturing.

Welcome to the future.

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One Response to “Blow and Nocera”

  1. Stewart Q. Fernandez Says:

    President Obama has launched a plan to spark manufacturing growth and new jobs for American families. The Navy Yard is a great example of the growth of small green manufacturing across industrial sectors, and it’s a model that can be replicated in other urban centers for how to grow a city’s economy, grow good middle class jobs, and build a more sustainable city. Manufacturing remains one of America’s most globally competitive economic sectors, and even amid the biggest recession since the Great Depression, we are seeing this sector bounce back. My time at the Brooklyn Navy Yard gave me a valuable opportunity to engage in a conversation about how the Federal Government can better support small manufacturers that provide good middle-class jobs in their communities. We will keep engaging in these types of conversations and following them up with action to ensure we are investing in the spark and ingenuity of our entrepreneurs, good American jobs, and a strong foundation for the American economy in the 21st century.

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