Uncategorized

The disappearing middle class

Interesting read from the New York Times  today about how businesses are adjusting to a shrinking middle class, by focusing on the polar ends (the rich and poor)  of the wealth spectrum.

From the article:

In response to the upward shift in spending, PricewaterhouseCoopers clients like big stores and restaurants are chasing richer customers with a wider offering of high-end goods and services, or focusing on rock-bottom prices to attract the expanding ranks of penny-pinching consumers.

“As a retailer or restaurant chain, if you’re not at the really high level or the low level, that’s a tough place to be,” Mr. Maxwell said. “You don’t want to be stuck in the middle.”

Although data on consumption is less readily available than figures that show a comparable split in income gains, new research by the economists Steven Fazzari, of Washington University in St. Louis, and Barry Cynamon, of the Federal Reserve Bank of St. Louis, backs up what is already apparent in the marketplace.

In 2012, the top 5 percent of earners were responsible for 38 percent of domestic consumption, up from 28 percent in 1995, the researchers found.

Even more striking, the current recovery has been driven almost entirely by the upper crust, according to Mr. Fazzari and Mr. Cynamon. Since 2009, the year the recession ended, inflation-adjusted spending by this top echelon has risen 17 percent, compared with just 1 percent among the bottom 95 percent.

Click here to read the entire piece.

Check Also

UNC Board of Governors face protest, chooses new board chair and interim president

It was a busy day at the final ...

Top Stories from NCPW

  • News
  • Commentary

“I could choose to do anything else with $50.” But Anca Stefan, a high school English teacher in a D [...]

The Cape Fear River is damaged, contaminated by decades of human malfeasance, negligence and ignoran [...]

Legislative Services Officer Paul Coble appears to be violating the state public records law and is [...]

This morning, the state Supreme Court will hear oral arguments in the pivotal case of Silver, et al. [...]

The post Snail mail appeared first on NC Policy Watch. [...]

65 - number of days since the mass shooting at Marjory Stoneman Douglas High School in Parkland, Flo [...]

In Washington, legal and political walls may be closing in on the slow motion train wreck that is th [...]

These are extraordinary times in the American experiment with representative democracy. In Washingto [...]

Now hiring

NC Policy Watch is now hiring a Managing Editor – click here for more info.