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Richest One Percent Will Own More Than Half the World’s Wealth by 2016

Alice and Jim Walton

Alice and Jim Walton

A new report by Oxfam underscores the fact that income inequality is continuing to rise to dangerous levels. The report, titled Wealth: Having It All and Wanting More, estimates that the combined wealth of the richest one percent will exceed that of the 99 percent next year unless actions are taken to curb inequality.

According to the report, the wealthy few increased their global wealth from 44 percent in 2009 to 48 percent in 2014. Based on this trend, the combined wealth of the richest one percent is expected to be more than 50 percent in 2016. The report also notes that just 80 of the wealthiest people in the world possess a combined wealth of $1.9 trillion, which is nearly the same amount shared by 3.5 billion people, or the poorest 50 percent of the global population.

Thirty-five of the 80 richest people in the world are Americans, and the top 10 ten richest people in the world include Christy and Jim Walton, heirs to the Walmart empire.

JCPenney Closes Stores, Lays Off Thousands

Is understaffing part of the problem?

JCPLast week, JCPenney announced that the company would close nearly 40 stores, costing 2,250 workers their jobs. JCPenney workers across the country are preparing to close their stores by the beginning of April.

The closures represent nearly 4 per cent of JCPenney locations, and follows the failed reinvention plan by former CEO Ron Johnson.

But the problems at JCPenney are not limited to the failed vision of Ron Johnson. Store workers report chronic understaffing that impacts the customer experience. A recent investigation by Business Insider’s Ashley Lutz showed empty racks and departments with unstaffed cash registers. The relationship between understaffing and missed sales opportunities is long established, with one economic study estimating that every $1 increase in payroll led to a $4 to $28 increase in monthly sales.

In an effort to improve morale in the wake of this announcement, JCPenney is responding to worker’s calls to bring back sales commissions, which were ended under Johnson. Sales commissions will be revived for approximately 3,000 workers who sell fine jewelry and home furnishings. Unfortunately, CEO Mike Ullman has far more work to do to earn back the confidence of store workers and JCPenney customers.

Middle Class Struggles and Retailers Close Their Doors

for retailers blogWhile corporate profits soar in other sectors of the economy, retailers are closing stores. Middle-class wages have stagnated as health and education costs soar, leaving families with less discretionary income to spend at the mall.

Wet Seal, a teen fashion retailer, closed 338 stores this month, giving 3,695 store workers as little as one day’s notice before laying them off. JCPenney will close 40 stores, costing 2,250 workers their jobs.

Major retailers from Walmart to Apple point to the country’s stagnant wages as a major threat to their bottom lines. A study by the Center for American Progress found that the cost of living for a family of four rose by $10,000 from 2000 to 2012. Yet the average American family earns less than it did fifteen years ago. Retail spending is the first thing that families are cutting from their overstretched budgets.

But the retail sector that is powered by consumer spending is also the employer of millions of Americans and the source of stagnant wages. The irony of retailers’ woes is that this vicious cycle of lowered consumer spending and diminished revenues starts with the stagnant wages offered by employers like Walmart. A growth strategy for the retail industry can only start when we come together to raise the wage in America.