Big business is beginning to feel the economic burn that middle-class America has been experiencing for years. With many families being forced to scrimp and save just to get by, corporations are starting to see that low wages are taking a chunk out of their bottom lines. And for some companies, it’s resulted in them shutting down completely.
Not surprisingly, it is retailers offering higher-end offerings that are in particular being pinched by U.S. workers’ lack of extra dollars. Whole Foods, for instance, has seen its sales slow and its stock price stumble as shoppers head to discount markets to fill their shopping carts each week. Even families who used to shop occasionally at the store for special occasions just can’t swing it anymore.
The same could be said when it came to Crumbs, a national cupcake chain that abruptly shut its doors last week after losing tens of millions of dollars as America’s obsession – and its ability to afford – expensive oversized gourmet cupcakes waned.
That’s not something to celebrate. After all, these companies and others like them together employ tens of thousands of workers whose jobs are now lost or could be in jeopardy. However, in many cases these businesses are causing their own problems. They are doling out salaries to their own workers that make it challenging for employees to cover their bills.
The result is America is home to a declining middle-class population that lags behind much of our First World brethren and ranks 19th overall globally. In fact, wages for most U.S. workers have either remained flat or fallen since 1979. While Americans have toiled harder in recent years, salaries have come nowhere close to keeping up.
Thankfully, it seems a few in the business world are catching on to the issue. But more corporate leaders should realize that if workers earn more they can then in turn spend more, which in turn boosts the economy and benefits everyone. These forward-thinking businessmen note that economies like the U.S. work best where there is less income inequality.
So how does America begin to get back on track? First, there needs to be a federal increase in the minimum wage that reflects the fact that the current rate just isn’t covering the basic costs of families across the country.
But that’s not all. There also needs to be a greater realization that many of the nation’s most successful companies are getting that way on the backs of their workers, who they underpay and force onto the public dole while taking advantage of tax benefits. Surely, that is not an example of a “rising tide raising all boats.”
Greed cannot be allowed to run amok, especially when it is being paid for by all of us.