Trickle-Up Austerity

In the good old days before the financial crisis struck, trickle-down prosperity was the rage. But in today's new normal, as My Budget 360 reminds us in "United States of Dollar Stores," it's more a matter of what one might call "trickle-up austerity."

The fastest growing segment of dollar store customers are coming from those making $70,000 a year or more.  In fact, 1 out of 5 dollar store shoppers come from this group.  Keep in mind the median household income in the US is $50,000 and those that make $70,000 a year or more are in the top 35 percent of households.

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The rise of the dollar store goes hand and hand with the loss of the middle class in America.  The largest customers at dollar stores are still those with lower incomes, households making $40,000 a year or less make up nearly half the customer base.  But when this pool continues to grow you have business growth and that is what we are seeing here.  The average per capita income in the US is $25,000 which doesn’t go far given the cost of healthcare, energy, and education.

It is also fascinating to see that 40 to 45 percent of dollar store items now come from big name brand companies.  This industry is now a multi-billion dollar industry.  I’ve driven around and see Subway and KFC for example now having marketing material showing “EBT accepted here” and dollar stores with a large and growing segment of their aisles made up of by food, are seeing a boon in this economy.  I mean think about it with 45,000,000+ Americans receiving food assistance this is a large customer base.  You also have many retirees who heavily rely only on Social Security stretching their declining buying power at these stores.  Even with low profit margins business can be good.  Not sure if we should be thrilled that dollar stores are one business segment that is booming in our modern day economy.

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Comments

[Richard L. Vaughan]

Panzer, change that to 'percolate up,' which is not only scientifically more accurate but also suggests a bit of heat under the lower social layer. RIchard L. Vaughan, vaunscript@hotmail.com

[Crumb cake]

Trickle up is just fallout from a dishonest system....

Chris Moore interviews Warren Pollock - KDKA - CBS Radio

Chris Moore of 1020 KDA Pittsburg have a wide ranging discussion on current economic events and trends. We talk about the breakdown of the rule of law and the monetary structure. The six pillars of the economy are six trajectories including money, law, technology, transportation, human capital, and the physical world. The Corporate system is based on incorrect accounting and the selective application of the rule of law.

http://youtu.be/gfkM3HddpwI

[Tom]

The second hand stores are also doing well, recycling clothing and other donated (or consignment) items from the estates of deceased people to unwanted items from the living. Swap meets, bartering and "free-cycling" are popping up in more and more areas due to demand, ease of transaction and no shortage of either "buyers" (or traders) and "customers." A lot of people go to flea-markets for the same purpose - acquiring old, still usable tools, long-gone technology (peddle-wheel sharpening stone, for example), and to connect with others "on the edge." As illustrated by tv, the pawn industry is also doing rather well.

[Rocky]

Well, that's what happens when a lot of blue collar voters vote for politicians promising to stop gay marriage. You do realize that there were never enough billionaires or even 1%ers to elect George W. Bush to office, twice. It took a lot of help from the lower classes. In 2010, these religious folks once again gave the Republicans control of the House almost ensuring that the Bush tax cuts would not expire at the end of that year. Sure enough, Obama caved into them.

In a weak economy when so many Americans are still struggling, I am surprised that the Republicans have so much support in the country. Some of their strongest precincts are in ultra Orthodox Jewish communities where religious issues are as important as in any Christian Evangelical community. If food stamp and Section 8 housing benefits are cut next year, the people of Kiryas Joel, NY will be among the biggest losers. They are very high users of both programs (on a per capita basis) and in 2008 voted overwhelmingly for McCain (93%).

I wonder if Oprah watched this video before she did her Hasidic interviews:

http://piven.blogspot.com/2008/11/election-enclave-hasidic-vote-in-crown.html

When the Vitamix salesman came through the local Whole Foods store recently, he sold all of his Vitamix blenders (at $399 plus tax) and some buyers had to be put on a waiting list. Not everybody is hurting in this economy. Right now, I am guessing that I will get to keep my Bush tax cuts for at least another two years.