Monday :: Dec 20, 2004

"Where are the shoppers?"

by pessimist

George Weaselword Bu$h just loves to brag about how well his economic policies are working. People with that Red State 'moral values' mentality would tend to agree.

It's only the rest of us 'non-Americans' who have noticed that there is a direct connection between people working more hours for less and decreased consumer sales.

There was much bragadoccio earlier this fall as the holiday shopping season began, but then Wal-Mart noticed that their sales projections were far too optimistic.

As in recent Bu$hCo years, the immediate response was to hold discount sales. This year's sales hit 50% off within a week of Thanksgiving - at least out here in SoCal's Inland Empire. Several retailers are even having 'bonus' discounts if one shops during off-peak hours. I will be taking advantage on one such sale to purchase the mandatory holiday gift for the distaff side of the pessimist household.

One knows that retailers are concerned when an artile like this appears before the holiday buying season has ended:

Where are the shoppers? nervous retailers ask

A much-hoped-for sales bonanza for the nation's retailers appeared not to materialize on the last weekend before Christmas, despite an abundance of deals on toys and apparel. Merchants needed a hefty sales surge to recoup lost business after a slow start this holiday season.

"We are not getting the kind of lift we need. Traffic and sales were below expectations" on Saturday, said Michael Niemira, chief economist at the International Council of Shopping Centers. He serves as an adviser for ShopperTrak, which tallies sales results from 30,000 retail outlets.

What? Aren't the Toppers doing their part for George Whole$ale Bu$h'$ New World Order Modern Merchandising Miracle? Considering this next post, one wonders why such thoughts would occur even to Dumbya:

Labor Day Report: Working Class Strained by Low Wages, Inequality

The EPI report also argues that the deficit between productivity and worker pay has contributed to the increasing gap between the rich and the poor. The top one percent of Americans controlled almost as much wealth in the year 2000 as their counterparts did in 1929, right before the Great Depression.

The report notes that, adjusting for inflation, between 1979 and 2000 the income of households in the poorest twenty percent grew only 6.4 percent, while the incomes of the richest twenty percent grew 70 percent. The richest one percent of households saw their earnings increase 184 percent.

Measured in terms of wealth, or income and assets minus debt, the disparity between the rich and the poor is even greater. In 2001, the richest one percent controlled over 33 percent of national wealth, while the bottom 80 percent accounted for only sixteen percent.

Far from a temporary trend, many economists and historians say the economic downturn has its roots in economic policy dating back to the Reagan administration. Peter Rachleff, a labor historian at Macalester College, said that strong institutional reforms enacted during and after the Great Depression, including the welfare state, an increased governmental role in the economy, and a unionized work force, helped keep many working people out of poverty. "[However,] starting with Reagan’s presidency, we have been systemically tearing down those reforms, and we are now reaping the consequences," he said, adding that he believes the decline continued during the Clinton presidency, in which welfare reform was enacted, and union membership continued to drop alongside manufacturing jobs .

Some trends noted in the EPI report date even further back. Perhaps most surprisingly, the report shows that increased productivity has not directly led to increased pay for workers since the early 1970s. Although workers are producing faster than ever, the company tends to reap most of the benefits. While from 1947 to 1973 income and productivity increased at the same rate, from 1973 to 2000 median family income grew at only one-third the rate of productivity growth. These figures challenge the widely-held notion that productivity growth benefits workers.

EPI analysts say the weak labor market has also driven down wages and income, as workers are willing to accept lower pay. "Unfortunately, families don’t eat GNP [Gross National Product]," EPI policy analyst and report co-author Lawrence Mishel said. "They eat compensation, and that hasn’t done so well."

"Wal-Mart and McDonald’s jobs, what we call ‘McJobs,’ are being created in this economy," AFL-CIO spokesperson Sarah Massey said. "We also need manufacturing jobs and high-tech jobs. We’re just not seeing that in this economy."

This post confirms the above contentions:

Low pay, few benefits and inadequate raises have many workers scrambling to keep up

At one time, Sandra Garratt ran a fashion company with 150 stores and half a billion dollars a year in revenue. Her comfortable knit and cotton designs, known as Units and Multiples, were household names.

Now, says Garratt: "Having a MetroCard is a luxury."

Problems with various financial partners sent her business through many stops and starts, finally shutting its doors for good in the late 1990s, Garratt, 52, said. Since then, she worked at a variety of retail jobs but could not find secure footing.

So after being unemployed for more than a year, Garratt finally began working last month as a night manager at a catering company, earning $6.25 an hour, without benefits.

It's a job, and that's certainly an improvement, but it's not enough, said the Washington Heights resident.

"I'm used to making six figures in my own business, and yet I'm grateful for this, because at least it's something," Garratt said. "But I'm still struggling."

Many area residents are finding that their only options are low-paying positions with few, if any, benefits. And yes, a job is better than no job - but that's not making many people feel better, and it's certainly not paying the bills.

So, wallets seem empty and families feel strapped, even as paychecks keep coming. Others are racking up debt just to meet their basic needs. And there's certainly little, if any, disposable income for holiday gifts, home improvements or a night out.

Are we getting though to you greedy multinational corporate Scrooges yet? After the bills are paid out of the meagre wares you begridgingly pay, there isn't much left for the consumer-driven profits you seem to believe you are entitled to:

"Hourly wages have been stagnant for most workers," said economist Jared Bernstein of the Economic Policy Institute, a Washington, D.C., think tank. "And that's what's hurting families, and consumer confidence, right now."

The latest statistics tell the story. Average weekly earnings nationwide grew by 2.1 percent annually in November, according to the U.S. Department of Labor. Meanwhile, inflation, including the volatile but critical food and energy categories, gained 3.5 percent over the year, as of November, according to the Bureau of Labor Statistics.

A recent study by the Center for an Urban Future, a Manhattan think tank, showed that a quarter of all working families statewide are considered low-income, unable to afford basic needs including housing, child care and transportation. The report defined low-income as less than twice the poverty level - or a $37,958 annual salary for a family of three.

There is a stark difference between the new jobs created now and those created during the late 1990s boom.

Between June 1996 and June 2000, 108,800 new jobs were created, with an average wage of $40,977 according to Long Island Association chief economist Pearl Kamer.

In contrast, just 18,400 jobs were created between June 2000 and June 2004. The average wage: $23,995.

Still proud of your 'moral values' vote? Maybe you can eat those 'moral values' when your food money runs out.

The article concludes with a list of things one can do when one is suffering from the Bu$hCo Blue$. I'll only cite a few that pertain to the specific topic of this post:

Trying to handle increasing costs without wage gains? Here are some survival tips:

* Watch your debt. Living within your means is critical, as is not accumulating credit card debt, which will only make it more difficult to climb out of the financial hole and regain your footing.

This means that there aren't going to be very many presents purchased from the major retailers for Santa to leave underneath the tree this year. This alone means reduced sales.

Find ways to save. Call your phone company to see if you have the best possible plan. Cut out luxury items, such as cable television or magazine subscriptions. Rent a movie and pop your own popcorn, instead of going out. And buy grocery items in bulk.

Hell of a way to celebrate the holidays - pinching pennies like one now does all year - isn't it? It's a Good Thing that The Reason for the Season was poor Himself. He would understand much better than the Greedy Toppers do.

Now if only we could try out that eye of the needle trick of His with a Topper...

Dawning of a new age?[Scroll down]

Since a rich man has no more chance of getting into heaven than a camel has of passing through the eye of a needle, then if the country be Christian all those tons of money now swelling corporate coffers will be channeled into a new purpose - the growth of America.

Not only will the poor be fed and the working man and woman paid a solid living wage, but the sick and elderly will be able to consult their doctors and buy their medications without going hungry, the national infrastructure will be restored as needed, and our "alabaster cities will gleam, undimmed by human tears."

William R. Myshrall
Santa Maria [CA]

Amen, Brother. Merry Christmas to you - the religious one.

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pessimist :: 12:50 PM :: Comments (8) :: Digg It!