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America's 'Retail Apocalypse' Is Really Just Beginning (bloomberg.com)
An anonymous reader quotes a report from Bloomberg: The so-called retail apocalypse has become so ingrained in the U.S. that it now has the distinction of its own Wikipedia entry. The industry's response to that kind of doomsday description has included blaming the media for hyping the troubles of a few well-known chains as proof of a systemic meltdown. There is some truth to that. In the U.S., retailers announced more than 3,000 store openings in the first three quarters of this year. But chains also said 6,800 would close. And this comes when there's sky-high consumer confidence, unemployment is historically low and the U.S. economy keeps growing. Those are normally all ingredients for a retail boom, yet more chains are filing for bankruptcy and rated distressed than during the financial crisis. That's caused an increase in the number of delinquent loan payments by malls and shopping centers. The reason isn't as simple as Amazon.com Inc. taking market share or twenty-somethings spending more on experiences than things. The root cause is that many of these long-standing chains are overloaded with debt -- often from leveraged buyouts led by private equity firms. There are billions in borrowings on the balance sheets of troubled retailers, and sustaining that load is only going to become harder -- even for healthy chains. The debt coming due, along with America's over-stored suburbs and the continued gains of online shopping, has all the makings of a disaster. The spillover will likely flow far and wide across the U.S. economy. There will be displaced low-income workers, shrinking local tax bases and investor losses on stocks, bonds and real estate. If today is considered a retail apocalypse, then what's coming next could truly be scary.
Yeah, things are on the brink of getting dramatically better, I think.
What the problem is right now is the hordes of people that are not showing up in the unemployment stats, but are nevertheless suffering in the job market. Those people that are on a couch, glued to a soap opera daisy chain all day, are there because their spouse, parent, or some significant other has a good jobs and will keep them there. And they're there because $7 or $10 an hour at the burger-flipping or big box retailer just isn't worth driving to.
Now, if this tax cut can take place, things will change. Those people already working those burger flipping and big box retailer jobs are going to see a dramatic rise in the help wanted ads for manufacturers that are adding 2nd and 3rd shifts due to the dramatically lower corporate income taxes that allow those companies to make money with factories inside the USA. They're going to quit Mickey D's and Walmart, and go to work for the local small business with a lot of machines that need tending. Some will even train to be maintenance people, millwrights, etc. They're going to be making $25 / hr.
Meanwhile, back at Micky D's and Walmart, they're going to be going out of their minds attempting to conduct business without those people that left. They can't get those people pryed away from their soap operas until they start paying some real money. So, the $15 / hr minimum wage will be obsoleted, by these companies raising their wages to $15 / hr in order to lure the less-needy off their couches. (We will then see if the Republican apocalypse that everyone is going to go out of business if forced to pay $15 an hour as a minimum.)
As more and more factories are built because it's a profitable thing to do in the USA now, the factory wages will spiral up as the factory owners compete for the last welder or electrician or whatever in the area and the burger-flipping and big box retailing will spiral up as the factories draw off their help to work in even higher paying jobs.
The Republican tax cut could do this, IF they maintain the 20% corporate tax rate AND they don't F around and delay it to 2022 or somesuch.
Passing the Fair Tax could do it in spades, the economy would sprout rocket engines under the Fair Tax as manufacturing would be done in an income--tax-free environment in the only developed country on the planet where that could be done. Foreign business people would injure themselves in the stampede to build factories here in the USA. We would probably actually experience a fairly severe labor shortage, which would spiral wages further. We could probably actually allow more immigrants because we could put them to work and the country would prosper.
But either way, it all depends on stopping the stealing, or greatly reducing it. Income taxes in any form are stealing, and the more stealing that goes on, the more the economy suffers.
Yes, truly evil the likes of which gases their own citizens. Let me know when the gas chambers are operational comrad.