Retail is suffering because the middle classes have lost $1,355 trillion in income since 1970

Retail is suffering because the middle classes have lost $1,355 trillion in income since 1970

Nowadays, there are a lot of articles being written about the collapse of retail in the USA. Some people blame Amazon and online shopping, but that is only a trivial part of the problem. $1,355,610,000,000 of consumer spending is missing from the demand side of USA spending, and that should be kept in mind whenever you read an article about retail going through hell. The big boom in retail in the mid-20th century was thanks a strong middle class. Conversely, the collapse of income of the middle quintiles of income must lead to a contraction of retail. Consider these charts:

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