Newspaper article St Louis Post-Dispatch (MO)

Holiday Splurging Not an Option for Many Workers Scraping By

Newspaper article St Louis Post-Dispatch (MO)

Holiday Splurging Not an Option for Many Workers Scraping By

Article excerpt

ELIZABETH, N.J. * At the brightly lit mall, clothing stores highlight holiday sweaters and big signs tout the sales, while Duquan Allen keeps his expectations in check.

Allen, who works full time cleaning planes at Newark Airport, says his mother doesn't expect anything big, and he usually gets a hooded sweatshirt. He plans to spend about $150 on presents for his grandmother, mother and 21-year-old sister.

"I'm good at budgeting," says Allen, who makes $10.10 an hour.

Heading into this holiday season, with gas and food costs down, unemployment at its lowest point since 2007 and clothing prices on the decline, economists and retail executives have declared it a great time to be a consumer. But seven years into the recovery, there's a stubborn divide that hourly workers see more starkly during the holidays, between themselves and better-off consumers who have benefited more as the economy improved.

"I see people traveling. I wish I could afford it," said Allen.

Many workers are indeed earning more. Average hourly earnings have picked up 2.5 percent over the past year, and major retailers have raised wages as competition for workers has increased.

Thanksgiving weekend featured crowds of shoppers at stores and malls, snapping up new TVs and clothing. Luxury stores have promoted "feel-good" gifts such as $1,000 silk pajamas.

Americans spent $3.45 billion online on Cyber Monday, according to Adobe Digital Insights, and nearly that much on Black Friday, the day after Thanksgiving. The National Retail Federation trade group expects holiday sales for the November and December period to rise 3.6 percent to $655.8 billion.

From the data, people seem very able to buy. Overall, people plan to spend about $935 per person this holiday season, according to an NRF survey. Behind that figure, though, there's a split.

Consumers with income under $50,000 plan to spend a little over $362 on gifts for their family and friends, while for those with income of $50,000 and higher, that number is about $768.

"The U.S. economy is not creating high-wage jobs for lower- and middle-income consumers," said Ken Perkins, president of research firm Retail Metrics LLC. …

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