My college-aged kids love him. I’m not talking about Stephen Curry or Justin Bieber (although they love them too); I’m talking about Bernie Sanders.
Whether you support him or not, my guess is that most Americans my age are very surprised about his popularity.
I also guess that Sanders’ popularity is based on the economic stress many Americans are feeling. The chart below captures the essence of one of the biggest problems facing our next president: a shrinking middle class and a growing lower class.
Sadly, roughly 50 million Americans live below the poverty line—the largest number in our nation’s history—and the poorest 40% of all Americans now spend more than 50% of their incomes just on food and housing.
No wonder that consumer sentiment has been sinking fast, which is a very troubling sign for our consumer-driven economy.
That consumer angst translates into slowing spending. The Commerce Department reported that retail sales dropped by 0.3% in March, well below the +0.1% gain Wall Street was expecting.
The biggest drop was on auto spending, which was down 2.1%, but one of the weakest sectors were restaurants.
I suspect the root of the issue is wages… or lack thereof. The reality is that wages—despite the recent minimum wage increase in several states—have been shrinking on an inflation-adjusted basis.
A recent report by the Pew Research Center, a nonpartisan think tank, concluded, “In real terms, the average wage peaked more than 40 years ago.”