Hollowing Out the Middle Class

The middle class in cities tend to be the most entrepreneurial participants in the city. The rich do not engage at the local level except from on high, and the poor are in a daily battle to survive in the city. When a city loses its middle class, it loses that entrepreneurial layer. It’s why every single government official or person in power touts the ‘small and medium size’ business as the engine of the city. Unfortunately, we enact policies that erode and cause friction for that layer. And this is regardless of the politics. Technology has done that.

Let’s use print publications for example, the local newspaper, which was typically run by a middle class city resident who would also hire middle class locals in the city. While the model of the local newspaper was based on scarcity (the locals had local information to put in the newspaper, the paper was read locally, and the businesses that advertised were local to gain access to the local populace), the advent of online publications that both expand the news radius (local is no longer as local) and extracted the local business ad revenue (why advertise to a small segment of your city when every buyer in the state can see your small business ad?).

This has fractured both local news but, more importantly in my opinion, has fractured the fabric of the middle class entrepreneurism that has powered most cities. Should we stop technology? No we should not. We cannot. But we should recognize that the fabric has been frayed and we can use the same technology to refocus the attention locally. It’s why we are seeing the rise of hyperlocal publications and news providers (or even citizen journalists) at the hyperlocal level will be the ones who combine the right mix of this local entrepreneurial energy with the advanced technology for hyperlocal targeting to reignite the layer of entrepreneurship.