Amazon, Wal-Mart, and the Middle Class

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For many, the American Dream of good schools, white picket fences, stable family communities, and tree-lined streets has become all but an illusion. Over the past several years, the middle class has been fighting a war on two fronts. Middle-class citizens have remained well aware of the idea that their tax dollars may go toward housing, child-care services, food stamps, cell phones, and spending money for those citizens who do not work.

At the top, of course, social critics have railed against an elite 1 percent group of private individuals and corporations that allegedly stymie upward mobility. Amazon (NASDAQ:AMZN), Jeff Bezos, Wal-Mart (NYSE:WMT), and the Walton family dynasty are symbolic of the 1 percent and a new American normal.

The American middle class is likely to remain under pressure into the near future. Cheap labor overseas and at home threatens wage and employment growth. Meanwhile, Federal Reserve policy has crimped savings rates while also elevating inflation risks. For now, students and families are often burdened with more than $100,000 in tuition costs.

Upon returning home, many a young graduate has observed a Main Street littered with trash, shuttered businesses, and petty criminals. Many economists will highlight a secular shift away from Main Street and toward Big Box exurbia and online retail. Ironically, these trends do not exactly bode well for long-term Amazon and Wal-Mart shareholder returns.

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