There is no economic recovery for lower income Americans. At least that’s the word from an organization that should know: Walmart. The retail giant reported that its sales have been falling for several months despite the media claims of economic recovery.
Sales at the popular chain fell .3 percent in the second quarter.
Observers believe that Wal-Mart’s sales are falling because lower income people simply have less money to spend. The U.S. Bureau of Labor Statistics reported that weekly earnings for working people fell by 0.5 percent in July. The Bureau also reported that hourly wages shrank by 0.2 percent and the average work week shrank by 0.3 percent.
“That low-income customer is really struggling now, and that’s hitting Walmart,” Edward Jones analyst Brian Yarbrough told Reuters.
The working class is making less money even though the economy is supposedly in recovery. Part of the reason for families’ plight is that most of the recent economic recovery has centered on the stock and real estate markets, where many lower- and middle-income people are not invested.
Higher payroll taxes and high fuel prices have hit the working class hard, Walmart Chief Financial Officer Charles Holley said.
“Our expectations for the back half of the year are through a lens of cautious consumer spending,” Holley said
Another problem is that most of the new jobs created in the past few years are low wage jobs in industries such as retail and hotels. The high-paying jobs have disappeared and don’t seem to be coming back.
Wrote Forbes.com columnist Abram Brown, “If discount every-day necessities can’t tempt shoppers into stores, it’s a clear signal that consumers feel stifled by a tough economy at home and overseas.”
Economic Downturn Far from Over
These figures reveal that the economic downturn is far from over. For many Americans, times are just as bad as or even worse than they were in 2008 and 2009.
Vast numbers of Americans are now trapped in poverty and near-poverty with no way out. These people need to rethink their lifestyles and stop relying on jobs, or they expect government or business to bail them out. Instead, they need to become self-reliant again.
Many families and individuals could pull themselves out of low-wage poverty and dead-end jobs by starting businesses, growing their own food, generating their own electricity and taking other steps toward self-sufficiency. Such simple measures as stocking up on food and supplies could help those families get through this situation.
Part of the reason why many working families are hurting is that they are no longer self-sufficient. Many of those people no longer do such things as fix their own cars, cook their own meals, or grow their own gardens. They pay somebody else for all that stuff; that means they are totally dependent on big business for things their grandparents or great grandparents provided for themselves.
For these people, even a cut in income of a few dollars a week can be a disaster. They don’t know how to tighten their belts.
Wal-Mart’s sales figures indicate that America could be facing a crisis as bad as or worse than the Great Depression. Many families got through the Great Depression because they could grow their own food or trade produce they grew for goods and services they needed. Today’s working poor often do not do that; when their job disappears or their pay gets cut, they are hurting. That drags down the economy because every dollar those people spend at Wal-Mart contributes to the greater economy. It means the economy could be actually shrinking instead of growing.