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Fashion is a business and business is about profits. Preparing for the future is important. I wrote a blog called ‘Fashionomics’ in December of 2010, and recently an article was published in USA Today that has a similar message about the ‘fading middle class.’ The changing economic climate will close stores over the next five years. This means big deals from outlets and closing retailers. Retailers wake up or you will not be here in 10 years. BRAND IS EVERYTHING.
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USA TODAY article: Middle class’ share of the nation’s income is shrinking
By Marisol Bello and Paul Overberg, USA TODAY
Analysts often use the middle three-fifths of households — when they are sorted by income — to define the “middle class.” Middle-class share of total income in 2010 and 2006 and the percentage-point difference (* indicates that the difference is statistically significant): For Reno car salesman Tim Ticknor, the squeeze on his middle-class existence gradually has turned into a chokehold. In 2005, he was making more than $90,000 a year selling used cars to people who had moved to the Southwest for its booming economy. It was an income that allowed him to rent a townhouse with his wife and daughter in a gated community. Over the next six years, as the economy slowed, so did his income. First, it dropped to $70,000, then after a time it fell to $30,000.
By Scott Sady, for USA TODAY
The car dealership where Ticknor last worked, making $90,000 a year, is bankrupt, and he is hustling as a day laborer for a temp agency. Today, the car dealership where Ticknor last worked is bankrupt, and he is hustling as a day laborer for a temp agency. He and his family had to move into his mother-in-law’s mobile home because they couldn’t afford to pay rent.
Ticknor’s story reflects how, across the nation, the middle class’ share of the nation’s income is shrinking. Reno, which has among the highest rates of unemployment and foreclosures in the United States, is a stark example: The share of income in the metro area that was collected by the middle class fell from 49.8% in 2006 to 45.8% in 2010, the year after the 18-month recession ended.
A USA TODAY analysis of Census data found the Reno area was among 150 nationwide where the share of income going to the middle class – generally made up of households that make $20,700 to $99,900 a year – shrank from 2006 to 2010. Metro areas where the middle class’ share of income dropped outnumbered those where it grew by more than 2-to-1.
“The lower share of income is a way of saying income inequality is growing in the middle,” says Paul Taylor, executive vice president of the Pew Research Center, who has studied the shift. “The vast middle has less of the pie than it had before.” Income is shifting to the top tier of households, especially those in the top 5%, Taylor says. The top 5% earn more than $181,000 annually. In 2010, the top one-fifth of U.S. households collected 50.3% of all the nation’s income, up from 49.9% in 2006. The lowest-earning one-fifth of households collected just 3.3% of the nation’s income, down from 3.4% in 2006. That leaves the three-fifths of households in between – a common definition of a broad middle class. It collected 46.3% of the income last year, down from 46.7% in 2006.
Analysts call it the middle-class squeeze.
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Contributing: Barbara Hansen in McLean, Va., and Jeff DeLong at the Reno Gazette Journal
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