I've read that something like 70% of Americans live paycheck to paycheck and that is not just the working poor; as our incomes expand so do our lifestyles. A saver remains a saver no matter how much income they earn and a spender remains a spender. And with our culture of consumption and not saving when things go bad, they can turn ugly. Now for the first time in a long time (since late 70s? early 80s?) we have true inflation, above a nominal 2-4%. So it is NOT keeping up with wages. So people of all classes, and all incomes, who are used to living paycheck to paycheck now will feel the pain. Especially since they are unable to recapitalize their growing debt into their house as they have been able to do the past half decade. Its a perfect storm and I expect to see a lot more stories like this in the coming few years - in fact, I'd expect this to be a big political issue in the presidential campaign (not that politicians can do much about the realities of global trends)
So what used to just affect the Walmart shopper, is now moving up channel to the Target shopper. It is slowly month by month enveloping more of our nation.
PRICES HIGH | Stores can see Americans are struggling
- THE CALCULUS OF LIVING PAYCHECK TO PAYCHECK IN AMERICA IS GETTING HARDER.
- What used to last four days might last half that long now. Pay the gas bill, but skip breakfast. Eat less for lunch so the kids can have a healthy dinner.
- Across the nation, Americans are increasingly unable to stretch their dollars to the next payday as they juggle higher rent, food and energy bills. It's starting to affect middle-income working families as well as the poor, and has reached the point of affecting day-to-day calculations of merchants like Wal-Mart, 7-Eleven and Family Dollar.
- Food pantries that serve the needy report severe shortages and reduced government funding at the very time that they are seeing a surge of new people seeking help.
- Merchants have adjusted their product mix and pricing. Sales data show a marked and more prolonged drop in spending in the days before shoppers get their paychecks, when they buy only the barest essentials before splurging around payday.
- ''It's pretty pronounced,'' said Kiley Rawlins of Family Dollar. ''It seems like to us, customers are running out of food products, paper towels sooner in the month.''
- Wal-Mart said the imbalance in spending before and after payday in July was the biggest it has ever seen, though the drop-off wasn't as steep in August.
- And 7-Eleven says its grocery sales have jumped 12 percent to 13 percent over the last year, compared with only slight increases for non-necessities like gloves and toys. Shoppers can't afford to load up at the supermarket and are going to the most convenient places to buy emergency food items like milk and eggs.
- ''It even costs more to get the basics like soap and laundry detergent,'' said Michelle Grassia, who lives with her husband and three teenage children in Brooklyn, N.Y. Her husband's check from his grocery store job used to last four days. ''Now, it lasts only two,'' she said.
- To make up the difference, Grassia buys one gallon of milk a week instead of three. She sometimes skips breakfast and lunch to make sure there's enough food for her children. She cooks with a hot plate because gas is too expensive. And she depends on free vegetables and powdered milk from a local food pantry.
- Academic experts told the paper that the income disparity among Americans was due a combination of factors including globalization and technical advances, which favor the most skilled workers, while the recent boom on Wall Street was also seen playing a large part.
