Although the U.S. unemployment rate has come down in the years following the Great Recession, wages have not really bounced back in real terms (taking inflation into account). And, according to the Bureau of Labor Statistics, the gap between the haves and have nots has steadily increased. This is NOT good news for retailers who appeal to middle-income consumers, as well as those selling non-necessities, as they gear up for the peak 2014 holiday shopping season.
“The typical American family makes less than the typical family did 15 years ago, a statement that hadn’t previously been true since the Great Depression. Even as the unemployment rate has fallen in the last few years, wage growth has remained mediocre. Last week’s jobs report offered the latest evidence: The jobless rate fell below 6 percent, yet hourly pay has risen just 2 percent over the last year, not much faster than inflation. The combination has puzzled economists and frustrated workers.”
“The great wage slowdown, or the end of it, will help set the tone for American life in the coming decade. It has already done so in the century’s first 15 years, causing widespread unhappiness with the country’s direction and leading voters to shift partisan directions multiple times. The political turmoil isn’t likely to end until the economic reality changes.”