It seems the ranks of the working poor are increasing, and holiday sales at best were lackluster. I won’t try to prove that these two things are closely related but I do suspect they are in the same family.
The Washington Post has an article about a report from The Working Poor Families Project which covers the increase in size of the working poor population in the US. The report says that despite 27 consecutive months of new job creation
nearly a third of the nation’s working families earn salaries so low that they struggle to pay for their necessities. […] [M]any of the occupations experiencing the fastest job growth during the recovery also pay poorly.
In 2011 over 70 percent of low-income families and half of all poor families were working, yet not earning enough to meet their basic living expenses.Notoriously underpaid jobs such as retail jobs, food preparation, clerical work and customer assistance are also among those that have experienced the most recent growth.The report also notes that in addition to the increase in the number of working poor there’s the growth in income inequity. Working families in the top fifth had incomes 10.1 times larger than the lowest fifth of working families in 2011.
Year-end financial reports say consumers in the US limited their holiday spending, producing a disappointing, lackluster season.
Target [department stores] reported flat December sales while the owner of Victoria’s Secret for once fell short of sales expectations. Macy’s, despite decent results, said it would close six stores this year.
Two exceptions were high-end department store Nordstrom’s, which had sales up 8.6 percent (remember the growth in income inequity?), and deep discounter Costco, with sales up 9 percent. Analysts blamed overall weakness on worries over the fiscal cliff and even the Sandy Hook mass shooting. But no analysts suggested that a growing portion of the population with little or no “extra” money to spend might also be factor.
And with that it is almost impossible not to mention another thing. This would be the well known old story that even automaker Henry Ford understood that it was beneficial for everyone to pay workers enough to buy a little more than just necessities. And in 1914 Henry Ford paid his workers five dollars a day – much more than other manufacturers paid.
According to Wikipedia, using the consumer price index, Henry Ford’s “a little more-than-just-necessities” wage would be $111.10 per day in 2008 dollars. For an eight hour day that is $13.88 per hour. And even though inflation is pretty low, in the last 5 years there’s some, especially in medical care, peanut butter, tires, just to name a few.
So, when Walmart hires its 100,000 vets, is it going to pay them $13.88 per hour?