Holiday splurging is not an option for many workers scraping by

ELIZABETH, N. J. – In the brightly-lit mall, clothing shops highlight holiday sweaters and great signs tout the sales, while Duquan Allen keeps his expectations in check.

Allen, who works full-time cleaning of aircraft at Newark Airport, says his mother don’t expect anything great, and he usually gets a sweater with a hood. He plans to spend about $150 on gifts for his grandmother, mother, and his 21-year-old sister.

“I’m good at budgeting,” says Allen, that $10.10 an hour.

Heading into this holiday season, with gas and food costs are low, unemployment is at the lowest point since 2007, and clothing prices on the decline, economists and retail executives stated that it is a great time to be a consumer. But seven years into the recovery, there is a persistent divide that hourly wage workers will see more off during the holidays, between themselves and better-off consumers, who have benefited more if the economy improved.

“I see people who travel. I wish I could afford it,” said Allen.

Many employees are, indeed, earn more. Average hourly wages have picked up 2.5 percent over the past year, and the major retailers have increased the wages as competition for workers has increased.

Thanksgiving weekend featured crowds of shoppers in stores and malls, snapping up new Tv’s and clothing. Luxury stores have promoted a “feel-good” gifts of $1,000, silk pajamas. Americans spent $3.45 billion online on Cyber Monday, according to Adobe, Digital Insights, and almost as much on Black Friday, the day after Thanksgiving. The National Retail Federation trade group expects holiday sales in November and December period to rise from 3.6 per cent to $655.8 billion.

From the data, people seem able to buy. Overall, people plan to spend approximately $935, – per person this holiday season, according to a NRF survey. Behind that figure, though, there is a split.

Consumers with an income under $50,000 plan to spend a little more than $362 on gifts for their friends and family, while for those with an income of $50,000 and higher, that number is about $768. Throwing in the decorations, greeting cards, flowers and food, the difference is even larger — about $512, compared to approximately $1,020. That gap also not budged since the recession.

“The US economy is not creating high-paying jobs for lower – and middle-income consumers,” said Ken Perkins, president of research firm Retail Data LLC. “This makes it extremely difficult for the lower-income consumers to make a living. There really is not much for Santa Claus.”

About half of American workers have seen their share in the total revenues of the growth of shrink, since 1980, according to a recent study by the economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman. In 1980, the top 1 percent of the adults earned an average of 27 times more than the bottom 50 percent of the adults; now, they earn 81 times more.

Employees at Wal-Mart Stores Inc., the nation’s largest private employer, now earn an average of $13.38 an hour while the average hourly wage for cashiers and low level retail sales staff in the industry is $9.26, according to a Hay Group study. But some groups say hourly workers across the board, still not enough to live on. Their fight will be faced with hordes of President-elect, Donald Trump’s pick for labor secretary: fast-food CEO Andrew Puzder, who has been critical of the minimum wage increases.

“It is a scary-looking administration,” said Scott Courtney, executive vice president of the Service Employees International Union. But he said that the “Fight for $15” campaign that began with retail and restaurant workers is not to give. “You’re going to see a lot more opposition and a lot more people to take part.”

In addition to the hourly rate, the number of employees say that there is a problem they can’t get enough hours. The share of people working part-time, because that’s all they can get remains at recession low levels, according to research by Penn State professor of the University of Illinois’ Project in the Classroom Renewal senior research analyst Lonnie Golden, published by the Economic Policy Institute. That level is almost 45 percent higher than in 2008, fed by a few sectors, such as retail.

Maria Coates, 20, of Elizabeth, New Jersey, to work approximately 35 hours per week at a mall on the basis of a clothing store, but would like more hours to earn more money.

“I wish I could shop for my mom, my grandma and my sister,” said Coates, who is planning to spend $50 for the whole family. More than that, they would like to be able to afford to study accounting. “What I really want is to go to school, so I made an even better job.”

After the rent and the rising cost of healthcare, some workers find there are not a lot more. Allen says that of the $1,260 per month, he takes his house, more than half goes to rent. After dinner, Wi-Fi, telephone and utilities, he has about $310 per month for other needs. He has no health insurance and recently paid $100 to fix an abscessed tooth — the equivalent of about ten hours of work.

“The real story for the economic malaise seems to be the increase in health insurance costs,” said economist Michael P. Niemira, who researched the 2015 data from the Bureau of Labor Statistics and focused on the second lowest income layers, which had an average profit before tax of $28,343 — about $13.63 an hour for full-time work.

Niemira, principal of The Retail Economist, LLC, says the health insurance of the cost as a proportion of profit before wages for that group were 15 percent in 2015, an increase of 8 percent in 2005.

Other needs, such as rent a larger burden. For those who are in the income group Niemira examined rent accounts for almost 12 percent of the profit before taxes, compared to less than 7 percent of all consumers, and only 2.7 percent for those in the highest 20 percent of income. In metropolitan areas, like New York, it can be much, much higher.

Mojisola Arogundade, who like All works in Newark for the contractor PrimeFlight, says she saved about $250 since July to spend on presents for her six grandchildren. She hopes to buy them clothes, but usually goes to thrift shops or local shops in Elizabeth, New Jersey, where she lives. “For a nightgown, I can for $2.99,” says Arogundade.

They rarely find what they can afford at the mall: “I’ve come here for sightseeing.”


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