It’s always nice to see a paragraph like this on the front page of the country’s biggest paper:

In the wake of the worst recession in 50 years, there’s little doubt that the American middle class—the 40% of households with annual incomes between $50,000 and $140,000 a year—is in distress. Even before the recession, incomes of American middle-class families weren’t keeping up with inflation, especially with the rising costs of what are considered the essential ingredients of middle-class life—college education, health care and housing. In 2009, the income of the median family, the one smack in the middle of the middle, was lower, adjusted for inflation, than in 1998, the Census Bureau says.

This is, after all, one of the biggest business stories of our age, and The Wall Street Journal tells it through the evolving strategy of that emblem of American middle-class consumerism, Procter & Gamble. P&G sees the U.S. economy bifurcating into high and low end, with the middle moving mostly toward the low end.

P&G has seen consumers move away from its full-priced brands toward its cheaper brands and those of lower-priced competitors, the Journal reports. At the same time, it sees high-end consumers flush with cash and is trying to market expensive products toward the luxury set. This is a good anecdote:

P&G’s dominant fabric-softener sheets business, including its Bounce brand, fell five percentage points to 60.2% of the market as lower-priced options from Sun Products Corp. and private-label brands picked up sales…

But this one is not so good:

As the recession wore on, U.S. market-share gains for P&G’s cheaper Luvs diapers and Gain detergent increased faster than its premium-priced Pampers and Tide brands.

This implies that P&G’s premium-priced brands are still gaining market share. If that’s so, it dents the story’s thesis that P&G exemplifies the bifurcation in the market, which is otherwise known as inequality. Along those lines, though, this is terrific:

To monitor the evolving American consumer market, P&G executives study the Gini index, a widely accepted measure of income inequality that ranges from zero, when everyone earns the same amount, to one, when all income goes to only one person. In 2009, the most recent calculation available, the Gini coefficient totaled 0.468, a 20% rise in income disparity over the past 40 years, according to the U.S. Census Bureau.

“We now have a Gini index similar to the Philippines and Mexico—you’d never have imagined that,” says Phyllis Jackson, P&G’s vice president of consumer market knowledge for North America. “I don’t think we’ve typically thought about America as a country with big income gaps to this extent.”

But there’s a blind spot here: Why this is all happening? This story could have gone from good to great by looking at how P&G itself is emblematic of the structural changes killing the American economy.

I wrote about a Washington Post story a few weeks back that looked at how many workers big U.S. companies had here versus overseas. The Journal reports that 60 percent of P&G’s profits come from the U.S. The Post reported that just 28 percent of P&G’s workers are in the U.S. Good old Midwestern, middle-class Procter & Gamble employs 72 percent of its 127,000 workers outside the country.

In other words, P&G is no bystander here (neither for that matter is Citigroup, with its long history of predatory lending, of quoted here on its “Consumer Hourglass Theory” that says investors should buy high-end and low-end consumer stocks). It’s an active participant in the hollowing out of the American economy.