The talk about the “one percent” is about the top earners in America. Many of them make their money on Wall Street and in the high tech industries. The question is, is it fair for so few people to make so much money?
Some analysts say that is not the important question. The real issue is whether most folks who go to school and work hard will have the opportunity to get good jobs. It is not about wealth or poverty. It is about being part of the great American middle-class.
Raising the minimum wage is a popular idea. Experts say it will help some people earn more, but it also might result in fewer jobs. Employers might cut back on work hours or the number of their employees. And it is feared that they might cut back on benefits.
However, new information is turning the spotlight on to what is happening in the business world. The middle-class is not supporting the businesses that served them for many years. Companies such as Sears and J.C. Penney are having a hard time staying in business.
Upscale companies like Barney’s and expensive restaurants are doing very well.
This trend is not new. It has taken place over the last 20 years.
The new finding is about spending by consumers. It is a clear sign that opportunity is in a decline.
In 1992, the top 20 percent of earners in America were responsible for 53 percent of consumer goods sales. The remaining 80 percent of earners were responsible for 47 percent of consumer goods sales.
In 2012, the top 20 percent of earners in America were responsible for 61 percent of consumer goods sales. The remaining 80 percent of the earners were responsible for only 39 percent of consumer goods sales.
The difference was always there. It is getting bigger.
The U.S. needs to focus on building the purchasing power of the middle-class. This means the private sector has to create jobs that are stable and pay well. How this will happen is not yet clear.
Source: The New York Times February 2, 2014