In the run-up to this Labor Day, I’ve noticed several CEOs, political pundits, and so-called economic experts saying they’re confused as to why Americans are so down. Consumers should be out buying stuff, they say, for the economy is humming again. Just look at the key indicators: GDP is growing, corporate profits are high, the stock market is soaring, jobs are being created, the unemployment rate is steadily dropping, and people’s disposable income is up. Yet, as the CEO of The Container Store recently grumped, consumers are in “a retail funk.”
That’s so cluelessly wrong, sir. Consumers (unlike you platinum-card members of the CEO Club) are in an income funk, meaning we have very little of the green stuff coming in. The bottom line is that Americans are down, because… well, because most of us are down. Yearly income for the typical household is $3,300 lower today than in 2007, when Wall Street barons crashed our economy. Or look at what’s happened to the typical American family’s net worth. It was nearly $88,000 ten years ago, but today it’s down to $56,000 – that’s more than a one-third drop, even though we’re told that America is enjoying “a strong recovery.”
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And the picture is not getting any brighter, because a new normal has been imposed on America’s workforce. Señor CEO has been gleefully slashing both jobs and pay, reducing the future of work to a low-wage, no-benefits, part-time, grind. One more number for you: 48. That’s the percentage of adults who now hold full-time jobs – leaving more than half of us trying to make ends meet on part-time work.
The lesson for the Powers That Be on this Labor Day is that there is no species called “consumers.” Rather, that creature is just a worker with a decent-paying job. Eliminate the job or shrivel the pay and – Poof! – consumerism goes away.
“The Typical Household, Now Worth A Third Less,” The New York Times, July 27, 2014.
“Why the Middle Class Isn’t Buying the Talk About a Strong Recovery,” The New York Times, August 22, 2014.
“In Tepid Wage Growth, a Potent Sign of a Far-From-Healthy Economy,” The New York Times, May 5, 2014.
“Many in U.S. still don’t feel economic recovery,” Austin American Statesman, August 1, 2014.
“Growth Without Jobs,” The New York Times, August 2, 2014.
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