Raining this way, way-too early Monday here on California’s north coast, a touch of theme for the day.
The moisture is just aggravating — another display of the dry-hole drought eating at the state’s life-support system and the teasing rainstorms that don’t do nothing.
And since the “big game” is now history, so is the economic value of the event — retail stores, like the liquor store I manage, received a spike in sales the last few weeks, NFL playoffs and whatnot, and we most-likely had good weekend sales off the Super Bowl, but that’s all over now.
Instead, ahead lies a long, dark, and profit-less winter.
(Illustration found here).
Since 2008, really, customers with money in their pocket have been easily shrinking — the folks who purchased high-end tequila, scotch, or whiskey have almost vanished. In 2007, when I started at the store, people were buying Patron, Macallan and Crown Royal by the truckload: No more.
A certain class of customer has disappeared, and from all indications here in Northern California, and all over, the same pattern has spread the loss of these cash-happy people. This past weekend will be real-good for us, not only off the influence of “the game,” but in actual-reality, it was also the first of the month. A enormous-chunk of our hard-core customers get some type check every month, and we usually get a spike in sales around the first and 15th.
We feel the pain, and so do our customers.
Last week, a study from Pew Research Center on the financial feeling for Americans — via Time magazine:
According to the study, a smaller percentage of Americans (44 percent) identify as being middle class than ever before.
At the same time, nearly as many Americans (40 percent) identify as lower-middle or lower class, while the share of Americans who consider themselves upper class has decreased significantly since 2008.
The results show that, at least when it comes to Americans perceptions, the middle class is a rapidly shrinking demographic.
Unfortunately, this isn’t just a case of a gullible public lapping up a media-generated narrative.
The data show that the income of the median American has shrunk 8 percent between 2007 and 2012, and is at the same level today than it was in 1997.
The average income for the highest quintile of earners only fell 2 percent during that time.
If you take wealth rather than just income into account, the situation looks even better for the wealthy.
According to research from William R. Emmons and Bryan J. Noeth of the St. Louis Fed, though the American economy has recovered roughly $21 trillion in lost wealth since the depths of the recession, those gains have gone disproportionately to those who own stocks and property hot housing markets like Southern California.
And the trend of increasing wealth concentration has been ongoing for decades now.
According to the Congressional Research Service, the top 10 percent of Americans have gone from owning 67 percent of the country’s total wealth in 1989 to nearly 75 percent in 2010.
Money has moved from the public to the private. There’s no longer those people with extra money in the pocket to buy high-priced booze, or anything of decent content. We used to have big displays of all kinds of alcoholic products, but now it’s hard enough just keep a decent selection on the shelves, much less floor exhibits.
Despite it all, rich assholes don’t party-hardy on a local neighborhood-level like middle-class folks, who once loved it, and probably still do, but no cash on hand.
And as in the words of George Carlin: “It’s called the American Dream, because you have to be asleep to believe it.”
Never was, and sure-as-shit not now.
Despite President Obama’s blather last week during the State of the Union: “We gather here knowing that there are millions of Americans whose hard work and dedication have not yet been rewarded…It is our generation’s task, then, to reignite the true engine of America’s economic growth — a rising, thriving middle class.”
This daunted middle class is disappearing, all the cash for high-price booze (and other shit) are being sucked upward into the nasty bowels of the rich. And there’s no solution, at least one close at hand.
Via the Boston Globe:
Although data on consumption is less readily available than figures that show a comparable split in income gains, new research by 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 Fazzari and 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.
More broadly, about 90 percent of the overall increase in inflation-adjusted consumption between 2009 and 2012 was generated by the top 20 percent of households in terms of income, according to the study, which was sponsored by the Institute for New Economic Thinking, a research group in New York.
The effects of this phenomenon are rippling through one sector after another in the US economy, from retailers and restaurants to hotels, casinos and even appliance makers.
Regardless, affluent shoppers like Mitchell Goldberg, an independent investment manager in Dix Hills, N.Y., say the rising stock market has encouraged people to open their wallets and purses more.
“Opulence isn’t back, but we’re spending a little more comfortably,” Goldberg said.
He recently replaced his old Nike golf clubs with Callaway drivers and Adams irons, bought a Samsung tablet for work, and traded in his minivan for a sport utility vehicle.
At street level, the divide is even more stark.
Sears and J.C. Penney, retailers whose wares are aimed squarely at middle-class Americans, are both in dire straits.
Last month, Sears said it would shutter its flagship store on State Street in downtown Chicago, and J.C. Penney announced the closings of 33 stores and 2,000 layoffs.
Investors have taken notice of the shrinking middle.
Shares of Sears and J.C. Penney have fallen more than 50 percent since the end of 2009, even as upper-end stores like Nordstrom and bargain-basement chains like Dollar Tree and Family Dollar Stores have more than doubled in value over the same period.
Good at the top, and the bottom, for some retailers — but not for single-owner, mom-n-pop-like stores, even liquor stores. At street level, business is bad all over Humboldt County, where I live, and vendors, sales-people and such are constantly relating ugly financial news as they drop by to take merchandise orders — small as they are.
We be screwed…
(Illustration out front found here).