On the EDge: See you at the dollar stores

OPINION – Forget the high-dollar, boutique stores that cater to upscale patrons, the real money is going elsewhere these days.

Despite the trumped-up figures released regarding the economy and unemployment, people are still looking for more and better ways to stretch their dollars. That’s why Dollar General and Dollar Tree executives are going head-to-head in a bidding war to purchase Family Dollar, a discount chain that is doing quite well in the marketplace.

These little stores, which feature goods at heavily discounted prices, are doing very well as the economy continues to flounder. They are doing so well, as a matter of fact, that Dollar General has offered $9 billion in cash and Dollar Tree has put together an offer of $8.5 billion in cash and stock to purchase Family Dollar and secure a larger share of the market.

Business hasn’t been so great at Wal-Mart, Target, and the other midpriced retailers for some time, the result being that these operations are now slashing prices even deeper to improve declining revenue. Whether they recoup their losses remains a question, especially for Wal-Mart, which many people refuse to patronize for a number of reasons.

The problem, of course, lies in the fact that even though in some instances the mega-stores like Wal-Mart and Target can actually offer lower prices, shoppers are still spending a lot of money at these more thrifty stores. They realize that to reap significant savings at Wal-Mart, Target, and the others they must make larger, bulk purchases, which do not often fit within a family’s cash flow. So, these families go looking for the best bargains they can afford, leading them to Family Dollar, Dollar General, and Dollar Tree. That’s why these smaller retailers are performing better than Wal-Mart in the stock market by a couple of bucks, according to Monday’s prices, and by $15-18 a share more than Target.

Those who practice the Wall Street voodoo project that the market for these smaller retailers will continue to grow by about $10 billion over the next four years. That’s a significant chunk of change.

But, as politicians have said for quite some time now, it’s about the economy and will always be about the economy, and we all know what role unemployment plays there.

That’s why you should never take municipal, state, or federal numbers issued on unemployment at face value. Those numbers are lies geared at stimulating a false sense that everything’s OK, when, in reality, it is not.

Job growth numbers, for example, are never fully explained. What kind of salaries are being offered? Is it seasonal work? Is it full-time work? Are there benefits? These variables lie heavily within the equation, but are almost never included in these rose-colored glimpses of job growth. Sure, there may be some new jobs, but are they paying a livable wage? Do they offer steady work? Who can fill them? There are many, for example, who are in need of work but are turned away because they are over-qualified.

The other number that matters?

The unemployment figures.

You can research the Internet and come up with a national unemployment figure of about 6.2 percent. Using government parameters, that is a true figure. However, the parameters are skewed. That 6.2 percent as announced by the Bureau of Labor Statistics represents only those who are unemployed and have looked for work during the last four weeks.

Once they haven’t looked for a job for four weeks, according to the BLS, they are no longer counted as unemployed or a part of the labor force. They are added to a group the BLS calls “marginally attached.” Among them are the “discouraged workers” who have given up looking for work. Once they haven’t looked for a job in 12 months, they’re no longer counted as marginally attached. Then there are the underemployed, the people who would prefer a full-time job, but can only find part-time work.

Add those folks into the equation and the true unemployment number nearly doubles. In July, for example, the announced unemployment rate was 6.2 percent while the actual percentage of those unemployed was a whopping 12.2 percent, according to the BLS.

The critics will raise their voices loud and long about how some people believe they are too good to take an entry level job, to flip burgers at the local fast food joint, or take on manual labor.

The truth is, of course, that the owners of those fast food joints, entry level jobs, or those who employ manual laborers go looking elsewhere, rejecting some applicants because they are over-qualified and opting instead for high school kids who will work for much lower wages, or the unskilled laborers who also work cheaper. Most of those jobs are also part-time, so benefits are out of the question.

When Franklin Delano Roosevelt took office in 1933, the United States was still in the throes of the worst economic nosedive in the nation’s history. The national unemployment rate was at about 25 percent – double or more that in some major metropolitan areas – and our farmers went bust because they had crops nobody could afford.

FDR set about fixing the massive decline with what he called the New Deal, which created the Works Progress Administration, the Civilian Conservation Corps, and the Agricultural Adjustment Administration.

The 1935 Social Security Act, perhaps the most well-known New Deal enactment, established the Social Security Administration and created a national system of old-age pensions and unemployment compensation. Social Security also offered federal financial support to dependent children, the handicapped, and the blind.

These programs turned the nation around, gave people hope, restored their dignity.

We have suffered this horrid economic disparity for nearly 15 years now, with little relief.

It’s time for some bold, new action, the establishment of new programs to put people back to work, at a livable wage and with, at the very least, valid health benefits, and get the economy back on track.

Are we healthier than we were a decade ago?

Of course, but only marginally. The effects of an illegal, irrational, immoral war have taken a toll in lives and treasure. We have seen the impact of ill-advised bailouts of financial institutions and businesses that should have been left to flounder in their own waste. And, we still see a widening of the chasm between the rich and poor, with a middle class that shrinks by the day.

Is it any wonder that these discount retailers are doing so well?

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Ed Kociela is an opinion columnist. The opinions stated in this article are his and not representative of St. George News.

Email: edkociela.mx@gmail.com

Twitter: @STGnews, @EdKociela

Copyright St. George News, SaintGeorgeUtah.com LLC, 2014, all rights reserved.

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21 Comments

  • Brian August 26, 2014 at 8:50 am

    This started out so good: Ed and I were on the same page. Ed was explaining the difference between U1 – U6 unemployment figures, sounding like a conservative. Then it all went horribly wrong. Liberals love to point to the New Deal as this great program that saved us from the Great Depression. What they don’t realize is that all the micro-management by the feds are WHY we had the Great Depression. Overseas all they had was a normal depression, or even recession in many places. It lasted so long and was so severe because of the governments micromanagement, and it really took the spending of WWII to really break it (which got us the military industrial complex, and we’ve been at war every day since then). You can’t just look at the first few years of social security or welfare and say they’re great programs. That would be like saying taking meth is a great way to lose weight and have more energy, because it works awesome for both of those for the first 60 days. You have to look at the life of the program to know its value or detriment. Just like meth works great up front and destroys you in the long run, social security and welfare work great in the short term, but destroy nations and individuals in the long run. True principles are the answer, not new programs. The pertinent principles here: 1) If you want to strengthen someone given them a hand up (opportunities, not freebies), but a handout will destroy them. 2) You can’t force someone into success or happiness. They have to want it enough to work for it (picketing and striking doesn’t count). 3) Programs get bigger and bigger and take on a life of their own. Don’t build programs, build people. 4) The more you tax something the less motivation it has to exist. 5) Anything you subsidize gets more and more dependent on that subsidy.

    • Sumthang4Nothin August 26, 2014 at 1:50 pm

      I also thought it was widely accepted among economist that “The New Deal” actually prolonged the great depression.

  • JAR August 26, 2014 at 9:53 am

    Interesting discussion. I think the mind set back during the thirties/ forties was If you and your families were hungry, grab that there shovel man and use it. In my mind,(my folks were there), the WPA,CCC, charities, etc., were avenues to survival. Discount stores today make a big difference to a lot of folks. But today, some think the government owes them. Welfare/food stamps/ a cell phone/ car allotment/ etc.
    Today, The average folk are out there still pounding the doors for work. They fell the responsibility to their families.
    The entitlement group knows the ropes to hang on to. It’s not my responsibility, it’s the government responsibility.

  • Lance August 26, 2014 at 10:11 am

    Ed started well as Brian says, it was hard to believe this was his till he started calling for more free govt. money and tossing in the Iraq war. The Iraq war cost has various estimates, most somewhere total the entire action at around a (one time) cost of 1 trillion dollars. Coincidentally, this is close to the annual military budget. And too, this is how much money the current regime’s presses print per year with nothing to back it but air. They spend $4T – every year. Social Security/Medicare/Medicaid is nearly 1/2 of it, again, every year. Beyond the year-to-year deficit spending that is called the National Debt, there is over $100 T in promises. When will liberals grow up, live within their means, and stop saddling debt onto future people, unborn even? I’m not sure where or how people shop in search of ever cheaper Chinese goods matters.

    • Ed Kociela August 26, 2014 at 2:35 pm

      No, the entire tab for the war in Iraq and Afghanistan will come to about $6 trillion. The national debt, according to an April piece in the Wall Street Journal, will be $23 billion less than predicted by the Congressional Budget Office, and $286 billion for the 10-year deficit. The savings are attributed, by the way because of lower subsidies and Medicare spending as a result of the Affordable Care Act. http://online.wsj.com/news/articles/SB10001424052702303887804579501563800875216

      • Lance August 26, 2014 at 5:10 pm

        Depends on your accounting, direct costs of Iraq are commonly measured in the $800 Bn range. Even HuffPo would tell you that. http://www.huffingtonpost.com/2013/03/18/iraq-war-costs_n_2885071.html Costs of War has the same direct cost number. http://costsofwar.org/article/economic-cost-summary You can get up to $4 Tn if you toss in Af/Pak and future (part of the $123 Tn unfunded obligations) promises. The war cost less than 1 year of total govt. spending in its entirety, right or wrong. $23 Bn is a drop in the bucket compared to these numbers, and 10 year projections are fables.

        • Ed Kociela August 26, 2014 at 10:42 pm

          Direct costs never tell the full story. There are war expenses, equipment, deployment and all as well as taking care of the many wounded who return from the war and require treatment. Don’t minimize or justify the war and its outrageous expense in lives and treasure. You may not like Social Security, et al, but we have paid into that account and are entitled to it. We funded that directly. (Entitlement is not a four-letter word.) Ten-year projections are in the eye of the beholder, but an indication of the current economic situation. Long story short? More and more of us are shopping Family Dollar and Dollar Tree on a regular basis to stretch our dollars.

          • Lance August 27, 2014 at 10:43 am

            I am sure many people are trying every way they can to live on less by frequenting the discount stores of all sorts too. And I’ll say outrageous is in the eye of the beholder myself, I don’t think the war’s cost can be characterized as such, given a year of “entitlement” spending eats something like 60% of the annual USA spending (there is no longer any budget since 2009) and is comparable to the war’s cost in its entirety over 10 years.
            The $23 Bn you cite amounts to 2/10ths of 1 percent of 1 Tn, not very significant, and also mostly a shifting of the cost from one line item to another. The Soviets you might prefer we become were mocked for their 7 year plans, they did not have the hubris to go for 10, and ACA will never meet these figures anyway.
            You should consider writing your next column on how people have payed into SS and your expectations of it, that could be interesting.

          • Ed Kociela August 27, 2014 at 2:52 pm

            Lance, you are mixing apples and oranges with your percentages. Mandatory and discretionary funding come from much different sources, from taxes to the contributions to Social Security etc. Technically a tax, SS payments only can be used for one purpose. It is a stand-alone program, is not a part of the budget and does not contribute to the deficit. It is a trust fund sort of set-up. Eliminating Social Security would not make a difference in our nation’s money flow because eliminating Social Security would eliminate that income from workers. Unless you raise taxes to cover that.

  • Robb Willie August 26, 2014 at 12:02 pm

    Wow. I just stepped into Bizarro Land. I actually agree with Ed…up until the Rah-Rah over FDR, anyway. (That’s understandable, as any good liberal would swallow his own tongue before speaking blasphemy of Franklin Roosevelt.) Anyway, I applaud the honest appraisal of the employment situation, as we head madly into the last two years of the presidency of Barrack Obama.

  • bobber August 26, 2014 at 12:37 pm

    Wow I just got in here and it’s like a right-wing Reganite circle-jerk in here…

    • Robb Willie August 26, 2014 at 2:46 pm

      All this light making you scurry under the cabinets?

  • bobber August 26, 2014 at 12:38 pm

    AND LET’S NOT FORGET ABOUT BENGHAZI!!!

  • Lou August 26, 2014 at 1:01 pm

    Having lived in an area where there was a Dollar General, I would love to see one here. They have great prices and merchandise. I am a shopper of Family Dollar because of necessity as are many others.

    • Joanna August 26, 2014 at 4:44 pm

      Same here, Lou! I love Dollar General…

  • DB August 26, 2014 at 2:23 pm

    People who listen to/view conservative media have known the truth about our current economy for quite some time. The only folks that are surprised are those that only pay attention to the “spin” from the Obama administration.

    • Dana August 26, 2014 at 4:42 pm

      People who listen to/view conservative media also know how to shop and make a dollar stretch. The cost of fuel takes a heavy toll on food and other goods. We buy in bulk when we can, use coupons, many of us have a garden and a very well stocked pantry.We aren’t waiting “…for some bold, new action,…” or “… the establishment of new programs to put people back to work,.. ” We found the solution to get our own household back on track. This isn’t rocket science. And yes, I DID build that, despite what Barry the golfer-in-chief says.

  • TheDude August 26, 2014 at 11:46 pm

    Anyone think that Family Dollar being bought out, Is a good thing. Not for the 100+ workers at the local Distribution Center? The new owners will close it , to cover the purchase cost of the company. Remember the movie Wall Street: Money Never Sleeps. Vericon part two.

    • Lance August 27, 2014 at 5:44 am

      Maybe this merger can make them the 98 cent store now, it is the drive for ever cheaper goods via economy of scale, as practiced by any company that works for profit.
      This is something we call freedom. This company wishes to make money by performing their work. Charity used to come from the church, but now it comes from momma govt. You are free to send some of these workers your paycheck so you can help them. To bemoan the company’s profit while not doing so would be hypocritical.
      I’ll agree it sucks to be a layed off worker but they are also free to migrate to where jobs might be.
      I’m going to Burger King today to celebrate my own freedom with a now Canadian burger, same great taste, and now with less imbedded regulations.

  • EL JEFE August 27, 2014 at 9:10 am

    Another liberal rant from the guy who supports amnesty for illegals……just to add to whole mess he just wrote about.
    A lot of readers have Ed figured out. Sorry Ed….not taking the bait.

  • RICK August 27, 2014 at 11:25 am

    If any of you have ever been to one of these stores you know that there are no discounts at these stores. Wally world is still cheaper and the food is either past the expiration date or close to it.

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