Dec. 15, 2014
Stolen Christmas?
By Julianne Malveaux
(TriceEdneyWire.com) - Walmart will earn about a third of its profits from this Christmas shopping season. Jewelers earn nearly the same amount between November and December. If spending were evenly spread during the 12 months of the year, sales and profits would be about 8 percent a month. Instead, lots of retailers depend on holiday spending to meet their bottom line. Even car sales peak at the end of the year in August and December.
Consumers are barraged with ads urging them to spend, spend, and spend, even as many are resisting spending. The unemployment rate has remained level at 5.8 percent; enough consumers were expecting the rate to fall, leading to a sharp decline in consumer confidence. While the consumer confidence rate was 93.8 in October, it dropped to 87 percent in November. This means that many are likely to stay home or spend less rather than participate in the annual spending orgy.
Last year, the average consumer spent 42 hours and $800 shopping. This year, it is projected that those who earn more than $50,000 a year will spend more, while those earning less that $50,000 will be more modest in their spending. Why? Consumers say they have limited or insufficient money to do much shopping, or they say that they are considering the high cost of living as they shop.
Another factor might be our nation’s rising debt. The average consumer has more than $15,000 in credit card debt. The average recent graduate owes more than $32,000 in student loans. For these folks to spend is utter folly, yet many will get caught up in holiday drama and spend money that they do not have.
Meanwhile, those who make public policy have been hostile to consumers and benevolent toward the bankers who played a major part in wrecking the economy in 2009. Large corporations spend millions and billions of dollars attempting to influence public policy their way, tightening laws that allow consumers to discharge bankruptcy, making it more difficult, in some cases, for people to get home loans. Many banks have attempted to increase interest rates for student loans, denying young people the low-interest benefit they had when they were perceived as “too big to fail”.
Every macroeconomic indicator suggests that our economy is improving. Nearly every microeconomic indicator says the opposite. From relatively high unemployment rates (the reported rate of 5.8 percent is 11.4 percent when hidden unemployment is considered; African American unemployment, reported at 11.1 percent rises to 22 percent), to dire perceptions of economic conditions (72 percent say economic conditions are the same or worse than a year ago), consumers, especially those at the bottom (which means most folks), are not happy with the economy despite happy news.
Consumers could be the Grinch that stole Christmas. What if, instead of dropping hundreds of dollars on “stuff”, people chose to consciously reduce profits by staying home? Would Walmart become an advocate for consumers if they felt the pinch from lower spending? Would the other industries that count on year-end spending be hurt if people constructively withdrew dollars from commercial enterprise?
Will the same activists who are taking it to the streets also taking their dollars to the cash registers. Consider the retail establishments that have been silent in the face of the massacres of Michael Brown, Eric Gardner and Tamir Rice, the 12 year old whose execution was especially heinous. What if people of conscience explained that they cannot spend money in business’ that are silent in the face of oppression. Can those who are offended by the state of our nation cooperate with the evil that too many retail establishments are part of. To see evil and to participate in evil is evil.
Some will say that they must shop because their children and loved ones will feel deprived if they don’t get a bunch of goodies for the holidays. What about if you spend a bit less and use this holiday as a way to talk to children about capitalism, spending, and the ways excess spending hurts families in the long run. Explain that less spending now might mean a larger college fund later. Explain how retailers are hurt when we refuse to cooperate with their oppression.
And don’t you dare believe the hype that Kwanzaa is a spending holiday. As envisioned by Maulana Karenga, Kwanzaa was developed to lift up the seven principles and to develop families. Dr. Karenga never envisioned Kwanzaa as a Hallmark profit center. Yet in our spend, spend, spend, culture it is often seen that way.
Will the Grinch steal Christmas? It’s up to consumers. Whether people pull a grand heist or a little pickpocketing, it would be great if people would let retailers know that their behavior may lead to less spending at Christmas and during other parts of the year.
Julianne Malveaux is an author and economist based in Washington, D.C.