That’s what you get when you hollow out the middle class

So, the supermarket chain Target closes down its Canada operation.

CBC News discusses this further in an article titled “Middle class retailers dying a slow death: Don Pittis“. And, of course, in a move nobody should be surprised by, their initial diagnosis has nothing to do with the stagnating or declining wages or some such, and everything with personal choice:

Aldwin Era is convinced that retailing is dividing in two, one for the rich and one for the poor. He has a simple theory about why: People no longer want to be seen as middle-class shoppers.


Interestingly enough, the real reasons are outlined further down in the piece (my emphasis):

“It’s either you want to live above and beyond your means, or you really absolutely cannot and so you really have to shop at stores like Wal-Mart,”
[…]
In fact, the article pointed out that as the rich got richer and the poor poorer, it was only the wealthy who could afford to spend.

“People in the top half of the income distribution are doing just fine. They’re spending enough to keep the economy moving,” Mark Zandi, chief economist at Moody’s Analytics, told the Journal reporters. “But the lower half is having a difficult time keeping their heads above water.

It is the lower half that Era identified as the ones who “really have to shop at stores like Wal-Mart.” And that is the second sector that has been growing.

Earlier this month, Wal-Mart announced it was spending half a billion dollars to expand in Canada, opening new stores and creating jobs.

The question is, what kind of jobs?

Statistics Canada data shows that retail remains the country’s biggest employer, dwarfing manufacturing, health care and construction. While unemployment remains low at 7 per cent, about 12 per cent of existing jobs are in retail, so the quality of those jobs really makes a difference.

“I’ve heard from a number of luxury retail workers who’ve said just because consumers are paying more for a product doesn’t mean the workers selling them those products are actually experiencing a better-quality job,” says Prof. Kendra Coulter, author of the book Revolutionizing Retail, published this month by Palgrave Macmillan.

She says the “Wal-Martization” of low-end retail jobs, with low pay and irregular hours, is helping to promote a two-speed Canadian economy.
[…]
The danger, she says, is that retail workers are increasingly joining the ranks of a distinct class of working poor too impoverished to shop anywhere but the lowest-end stores.
[…]
As Canadian economist John Kenneth Galbraith said in his book The Affluent Society, people with middle class jobs in rich societies can always opt out of the race to keep up with the Joneses. But the slow and painful death of the middle class retailer may be a symptom of something new: That a growing group of Canadians no longer has that option.

And there you have it: destroy the middle class, and middle-class shopping will follow.

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This entry was posted in developed countries, private debt, standards of living, wealth distribution. Bookmark the permalink.

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