Average Americans feel the squeeze
Americans are increasingly unable to stretch their dollars to the next payday as they juggle ever-rising bills for rent, food and energy. It’s so bad that it now affects day-to-day calculations of merchants like Wal-Mart Stores Inc., 7-Eleven Inc. and Family Dollar Stores Inc.
From Family Dollar to Wal-Mart, sales data show a marked drop in spending in days before shoppers get their paychecks. Then on payday, shoppers stock up as best they can.
Wal-Mart said the imbalance in spending before and after payday is the biggest it has ever seen.
7-Eleven says its grocery sales have jumped 13 percent over the past year. Shoppers can’t afford to load up at the supermarket, and are going to the most convenient places to buy emergency food items like milk and eggs.
It even costs more to get basics like soap and laundry detergent.
To make up the difference, Americans sometimes skip breakfast and lunch to make sure there is enough food for children at dinner. Many families cook with a hot plate, because gas is too expensive.
Food pantries (which distribute foodstuffs to the needy) are reporting severe shortages and reduced government funding at the very time they are seeing a surge of new people seeking their help.
Food and energy prices are rising faster than they have in decades. Low-income consumers are stretching their budgets by eating cheap foods like peanut butter and pasta. Industry analysts say the strain will get worse as people are hit with higher home heating bills this winter, plus an increase in mortgage rates.
Consumers making less than $30,000 a year are cutting back on nutritious food such as milk and vegetables. Analysts think Americans are also skimping on basic medical care and other critical services.
“The reality of hunger is here,” said the Rev. Melony Samuels, director of The BedStuy Campaign against Hunger, a church-affiliated food pantry in Brooklyn. His pantry scrambled to feed 5,000 new families over the past 12 months, up almost 70 percent from 3,000 the year before.
“I am shocked to see such numbers,” Samuels said. “This is just the beginning.”
In the past three months, Samuels has seen more clients in higher-paying jobs — the $35,000 range — line up for food, as the fallout of the subprime mortgage woes takes hold.
The Regional Food Bank of Northeastern New York, which covers 23 counties in New York State, cited a 30 percent rise in visitors in the first nine months of this year, compared with 2006.
Maureen Schnellmann is senior director of food and nutrition programs at the American Red Cross Food Pantry in Boston. She reports a 30 percent increase over last year.
Meanwhile, the costs of everything continue to rise. Gas prices hit a record nationwide average of $3.23 per gallon in late May. Prices are expected to soar again later this year.
Food costs have increased 4.5 percent over the past 12 months, partly because of higher fuel prices. Egg prices are 44 percent higher. Milk is up 21.3 percent over the past 12 months to nearly $4 a gallon.
The average family of four is spending $7 to $10 extra a week — $40 more a month — on groceries compared to a year ago, according to retail consultant Burt Flickinger III.
Overall wage growth is 4.1 percent over the past 12 months, but the increases are mainly for top earners.
Wal-Mart and Family Dollar key on the first week of the month, when government checks (like Social Security and public assistance) hit consumers’ mailboxes.
7-Eleven looks at paycheck cycles in specific markets dominated by a major employer, such as General Motors in Detroit, to discern trends in shopping.
Family Dollar, whose food offerings were limited to candy and snacks until two years ago, has expanded its mix of groceries like fruit cups, cereal, and such refrigerated items as milk, while cutting back on shoes. This summer Family Dollar began accepting food stamps.
http://www.msnbc.msn.com/id/21380215/
Meanwhile Jewish TV celebrity Jerry Seinfeld made $60 million last year, even though his show has not had a new episode during the last nine years. Oprah Winfrey made $260 million last year. Late-night talker David Letterman made $40 million, and Jay Leno made $32 million. Donald Trump banked $32 million from his television and licensing deals, while TV news anchor Katie Couric makes $15 million each year.
http://www.msnbc.msn.com/id/21071079/
