Opinion

David Rohde

How Zippos, dredges and vitamins can save the American middle class

David Rohde
May 25, 2012 00:02 UTC

Last week, 41 American companies received awards at a little noticed White House ceremony. Despite the recession, the companies – most of them small and medium-size businesses – have experienced rapid growth and handsome profits in recent years. And they’ve beaten Chinese, Indian and European competitors at their own game.

How? By selling to a burgeoning global middle class expected to grow by 1 billion people – primarily in Asia – over the next decade.

Zippo Manufacturing Co, the maker of the iconic American cigarette lighter, has experienced 1,000 percent sales growth in China over the last 20 years and 900 percent growth in India over the last eight years. While other American companies have shed jobs, the 650-employee, Bradford, Pennsylvania-based company has added 150 jobs in the last three years and experienced a 20 percent increase in sales, most of it overseas.

“It’s tough to compete, but we’re doing it,” said Greg Booth, the company’s president and CEO, referring to cheap lighters manufactured in Asia. “We’re competing in a category that is under incredible pressure.”

DSC Dredge, a small, Louisiana-based builder of dredges, has increased its overseas sales by 1,300 percent over the last 10 years and nearly doubled in size from 80 to 140 employees. Their biggest overseas customers? Nigeria and Bangladesh, countries that Americans think of as impoverished but are experiencing significant economic growth. The firm’s overseas sales have risen from $1.4 million a year in 2002 to over $20 million last year and make up 65 percent of its business. Charles Sinunu, the director of international sales, said the firm just sold three dredges to Russia and sells to 48 countries worldwide.

Dismiss the middle class at your peril

David Rohde
Oct 27, 2011 19:39 UTC

For two hundred years, the middle class has enjoyed legendary status in Western economic thought. First the British and then the American middle classes, Weber, Marx and many others said, served as vaunted engines of economic growth and political stability throughout the 19th and 20th centuries.

When large segments of the population moved beyond subsistence living, they invested their excess capital in savings, education and the purchase of increasingly high-quality consumer goods. A focus on thrift, education and hard work produced entrepreneurial small companies that drove economic growth.

For a remarkable forty-year stretch after World War II, that model proved largely accurate in many parts of the world. The American, European and Japanese economies drove global growth. And a middle class the likes of which the world had never seen emerged in the United States. American incomes, educational opportunity and home size seemed destined to grow inexorably generation after generation.

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