To solve the problem of why America has stopped shopping and get them back ringing registers, it might be time for retailers to rethink lobbying efforts and focus on new issues.
It's been a terrible start to the fiscal year for retailers. Sales are declining and there is no clear economic reason for it. Many are asking why the American consumer has stopped shopping.
Nordstrom reported a 64 percent decline in profits for the first quarter and Kohl's profits declined 87 percent. Macy's has had five quarterly losses in a row and the already long list of retailers filing for bankruptcy and closing stores is growing fast.
It's a stunning decline in an otherwise improving economy. The jobs reports are decent, savings rates are high, and low gas prices should equal sales gains, not drops.
But dropping they are, like stones.
Sure, shoppers are opting for experiences over merchandise. And yes, Amazon is taking more market share.
But very few are pointing fingers at the rising cost of living, particularly for millennials.
The average U.S. household is spending more on living expenses, and millennials are diverting their disposable income to pay off crushing student loan debt. The average student has close to $30,000 in debt after graduation, and many with advanced degrees have a good deal more.
Roughly half of our income is now going toward housing costs. Renters are particularly vulnerable here, and this is where most millennials fall – still young, and less likely to qualify for a mortgage thanks to tighter requirements by lenders after the housing crash.
Health care costs are on the rise too. Premiums, out of pocket payments and deductibles continue to go up.
Retailers are busy marketing to millennials with mobile apps, philanthropic messages and new product assortments. But it also makes sense to get behind some of the progressive policies being floated in this campaign cycle.
Policies such as making student debt tax deductible, offering free two-year college degrees, redirecting states to increase funding to universities, and the creation of a true single-payer national health plan – any one of these would go a long way toward freeing up cash.
Perhaps it is not enough for a business or its leaders to found schools within their alma maters. Macy's, Kohl's, Walmart and even Best Buy have college affiliations. Could they go further and help fund education differently? Creating scholarships and programs that ease the educational debt burden should be a bigger part of their efforts.
Big business has a role to play in our economy and this election. Lobbying efforts have long focused on issues such as minimum wage, scheduling and trade. The company line for many retailers has been to protect the business, even when it conflicts with the best interests of their customers. But those two things aren't easily separated, especially when that customer has less money to spend in stores.
Politics may indeed make for some unusual bedfellows. – Laura