Retailing in an Hourglass Economy
By George Anderson
The distance between the have-alots and the have-nots in America continues to grow while those households that fall into the have-more-than-not group is up slightly, according to a report issued by the Center on Budget and Policy Priorities and the Economic Policy Institute.
The group’s analysis of average incomes from 1980 – 82 compared to 2001 – 2003 found that the top 20 percent saw their income grow 58.5 percent over the two decades, while the bottom 20 percent achieved gains of 18.9 percent. All numbers were adjusted for inflation. The middle 20 percent of households saw their income grow 27.9 percent.
The group that has been hurt the most by the so-called hourglass economy has been workers without a college education. According to the Center on Budget and Policy Priorities, the 70 percent of workers in the U.S. with less than a college education have increasingly moved to low-paying jobs in service fields as manufacturing positions have disappeared. The group says that it now appears as though even college-educated workers are being affected as jobs are being shipped to offshore competitors.
“Growing income inequality harms this nation in a number of ways,” said one of the authors of the report, Jared Bernstein. “When income growth is concentrated at the top of the income scale, the people at the bottom have a much harder time lifting themselves out of poverty and giving their children a decent start in life.”
Mr. Bernstein, a senior economist with the Economic Policy Institute, added: “A fundamental principle of our economic system is that the benefits of economic growth will flow to those responsible for their creation. When how fast your income grows depends on your position in the income scale, this principle is violated. In that sense, today’s unprecedented gap between the growth of the typical family’s income and productivity is our most pressing economic problem.”
Moderator’s Comment: Do you agree with the Economic Policy Institute’s analysis that the gap between the haves and have-nots has widened over the last
two decades? If yes, do you expect the trend to continue and what will it mean for the growth prospects of retailers serving the two poles? –
George Anderson – Moderator
- Pulling Apart: A State-by-State Analysis of Income Trends – Economic Policy Institute
- Rich getting richer while the rest – The Kansas City Star