A big number of white middle class Americans and the Europeans have slipped to be known today as the ‘New Poor’. If their revolt is not handled well an unprecedented chaos is imminent. Here’s acclaimed management guru Prof. Jagdish Sheth’s formula to aggressively manage the transition
A majority of the middle class in the US and Europe, especially Britain, today need a wide-ranging policy intervention. Automation, obsolescence of many sectors and competition from developing countries have left the once well-to-do white middle class vulnerable. They voted for Donald Trump and for Brexit with the hope that they could stem their economic downslide. Four months into office, Trump still seems to be searching for workable models to appease this new demographic segment. Here’s some help from Dr. Sheth:
- Tax structure has to change to avoid a major revolt. Lower income tax and lower sales tax could help. A transparent flat rate is even better
- Support innovations in affordable healthcare plans especially that use expensive medical devices. Delivery of health services have to get better and cheaper
- Micro financing schemes to help those who want to start small businesses. The logic is that not many want to go back to corporate jobs. Self Inc is the new trend – estimated to be 5 million by 2020 in the US
- Make online higher education more accessible and affordable – like MOOCs (massive open online course) and Coursera online education for those who want to move up from high school education to acquiring college education
- Big investment in retraining especially in healthcare
- Support social entrepreneurship ventures with soft loans and access to expertise
- Encourage companies’ CSR foundations to invest in strategic CSR – on enhancing functional literacy and also to set up business incubators
- Encourage corporate offices to move out of big cities to small cities – for better connect with community
“The middle class revolt is real. The sooner everyone wakes up to address this the better it is
for everyone.“
