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