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New report: big corporations worried about shrinking middle class

The average American family makes less today than it did 15 years ago, while bills for a family of four went up by $10,000.

Those two facts are hitting home with the top 100 retail companies in America, says the Center for American Progress, which analyzed statements big retailers made in official stock filings.

Here’s part of the story from Huffington Post:

Researchers analyzed the most recent SEC 10-K filings of the largest 100 retailers in the country and found that more than two-thirds of these corporations issued warnings to investors that profits could be hampered by flat wages, high unemployment and low consumer spending.

Sixty-eight percent of the top 100 retail companies in the U.S. — a group that includes, Walmart, Apple, McDonald’s and J.C. Penney — say the country’s stagnant wages pose a major threat to their bottom lines, according to a new report by the Center For American Progress, a left-leaning think tank.

“Both corporate America and our relentlessly squeezed middle class are stuck in a vicious cycle of low wages and low demand, an economic crisis that trickle-down solutions can never fix,” wrote Brendan V. Duke and Ike Lee, authors of the CAP report.

Corporate profits are at a record high and the stock market is soaring. Yet the gains in wealth are being concentrated at the top, and the gap between rich and poor growing bigger than any time since the Great Depression.

Retailers feel the pinch of the shrinking middle class, since 70 percent of economic activity is based on consumer spending.

More from the HuffPost story:

Even chains like Burger King acknowledge their sales are dampened by low wages.

“We believe that our sales, guest traffic and profitability are strongly correlated to consumer discretionary spending, which is influenced by general economic conditions, unemployment levels, the availability of discretionary income, and, ultimately, consumer confidence,” the burger chain wrote in its 2013 filing. Big companies are worried about the decline of the middle class.

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