People are lining up today for bargains in many stores across America; Black Friday has even become an international phenomenon, pushed in Canada and the U.K. where it isn’t even a holiday. Some say the name comes from when stores are finally in the black, but according to some sources, (including MNN:)
“’Black Friday’ is the name which the Philadelphia Police Department has given to the Friday following Thanksgiving Day. It is not a term of endearment to them. ‘Black Friday’ officially opens the Christmas shopping season in centre city, and it usually brings massive traffic jams and over-crowded sidewalks as the downtown stores are mobbed from opening to closing.”
That was back in the ’60s when everyone hit the department stores. Much has changed in Philadelphia and elsewhere in the retail world. Some might look at the crowds fighting for bargains as a sign that people have too much money to waste, but perhaps there’s another way to look at it: People are chasing bargains because they have less disposable income than ever before. In fact, the census data bear this out:
For years up to 2000, the middle class shrunk because people were moving to the upper income group; then the middle class continued shrinking and the lower income group started increasing. The share of households in that middle class dropped from 55 percent in the ‘70s to 43 percent today. And as the New York Times notes, “Never before — since the Census Bureau’s data on household income began, in 1967 — has there been a decline in the share of households that qualify as high income.”
On Business Insider, Hayley Peterson describes how those middle income people “haven’t gotten a raise since 1999.”
After adjusting for inflation, U.S. median household income, at $53,657 in 2014, is still 6.5% lower than pre-recession levels in 2007, and 7.2% lower than its peak in 1999, according to the U.S. Census Bureau.
This is having a big effect on how we shop and what we buy. There is a lot of really expensive stuff at the high end, and everyone else is chasing bargains and choosing cheaper brands. Middle-of-the-road brands are getting hurt. The head of Hershey’s called it “consumer bifurcation” (or as Cory Doctorow of BoingBoing explains, that’s “plutocrat-speak for “everyone is broke except the 1 percent.”)
While overall consumer confidence is trending up, lower income consumers continue to be fragile as income and wage growth has been minimal. Higher income and more confident consumers are driving premium growth, while cost-conscious consumers are driving the value segment.
Starre Vartan writes that “now that we can shop online, and we know the importance of shopping locally, and even buying less for the holidays … Black Friday seems like a lot of stress that’s just not worth it.” But lots of low-income people can’t easily shop online. They don’t have credit or they can’t be home for special deliveries.
It’s likely that Black Friday is going through its own “consumer bifurcation” — the upper income groups take REI’s advice and go outside and play, while everyone else fights over cheap TVs.