Companies warn that income inequality is hurting their business

[applegrove]

Companies warn that income inequality is hurting their business

by Alan Pyke at Think Progress

http://thinkprogress.org/economy/2014/10/15/3580001/retail-middle-out-analysis/

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After decades as the dominant economic theory in American politics, trickle-down economics is starting to lose its grip on the debate. For evidence of that slippage, look no further than the business community’s own communications with investors.

Two thirds of the largest retail companies in the country say falling incomes for their customers threaten their business, according to an analysis of corporate filings by economists at the Center for American Progress (CAP). That is double the proportion that cited slack earnings for the masses among their business risks in 2006. And seven out of every eight major American retail companies “cite weak consumer spending as a risk factor to their stock price,” the authors write.

The report examined formal corporate filings with the Securities Exchange Commission by the 100 largest American retail companies. The analysis is based on filings from 65 of the companies, as the other 35 did not have to file the forms publicly. In the documents, the companies are explicit about tying their future prosperity to earnings for their customers. Burger King’s 10-K mentions “decreased salaries and wage rates…decreasing consumer spending for restaurant dining occasions” as a risk factor. J.C. Penney’s says that “the moderate income consumer, which is our core customer, has been under economic pressure for the past several years.”

Wall Street analysts have also taken notice of the retail business’ focus on customer earnings. The report quotes analysts from Morgan Stanley, Bank of America, Citigroup, Wells Fargo, and a half-dozen other major business analysis firms that are not household names. Each of them points to weak consumer spending and the economic weakness afflicting the middle class as factors hindering the recovery.


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[notadmblnd]

1. Did they really think the 1% would sustain them?

I asked the question over 10 years ago. Who the hell did they think would purchase their services once the middle class was gone?

[Dont call me Shirley]

2. The upper class is just now figuring that out!?

[Sherman A1]

7. Just because they are rich...

don't make 'em smart.

If they were, they would have figured out this was a really bad idea from the get-go.

[Wellstone ruled]

3. Ironic!!!!

Ever friggin non 1 % er has been screaming about this topic for how many years? Yah right,tone deft Wall Street and Politicians,what do you expect from the !% press any thing different. To think these same people who have been screwed over will still vote like the 1%. Geesh!!

[rhett o rick]

10. Calling it ironic I think is giving the 1% too much credit. If I might use a bad analogy.

The 1% are killing the goose that lays golden eggs. They are starting to realize that when the goose is dead, THERE WILL NOT BE ANY MORE F'N EGGS.

No one ever really believed the trickle-down theory worked as advertised. It's a crystal clear method of stealing from the lower classes. The Fat Cats are just coming to grips with the fact that after they take the last dollar from the lower classes, there won't be any more dollars to take and they are getting worried.

The Fat Cats don't wish us destitute, they just don't care if we are.

[upaloopa]

4. Maybe ALEC will back a minimum wage increase

If trickle down loses support and the right is masses up of dying old White men we may be in for a wave of progressive legislation soon.

[bluesbassman]

5. And in other news: Companies declare water to really be wet!

Guess they'll just have to give more tax beaks to the wealthy so that they'll spend more, right?

[Phlem]

6. !!!!

[BrotherIvan]

8. Well, no shit

[LakeVermilion]

9. This round of Monopoly is over.

We know who the winners are. Its time for a new game with some different rules.

If government doesn't establish rules for corporations, the corporations will have no rules.

[rhett o rick]

11. This round is far from over. The big fish still have lots of little fish to consume. nm

[iandhr]

12. No duh

If I was a business owner I would folks to have higher take home pay for my own self interest. If more people can afford my product I would have more costumers. More costumers means higher levels of profits.