dailymail.co.uk
US Economy Increasingly Reliant on Spending by Richest 10 Percent
The top 10 percent of US earners now account for a record 49.7 percent of consumer spending, highlighting the economy's increasing dependence on the wealthy, whose spending increased by 12 percent between September 2023 and 2024 while lower and middle-class spending decreased; this trend is attributed to factors such as pandemic savings and asset appreciation.
- What is the immediate economic impact of the US economy's increased reliance on the spending of its wealthiest citizens?
- The US economy's reliance on the wealthiest 10 percent of earners, who account for nearly half of consumer spending, has reached a record high. This dependence, amplified by their 12 percent spending increase between September 2023 and 2024, contrasts sharply with decreased spending among lower and middle-class households. This concentration of spending power leaves the economy vulnerable to shifts in their financial behavior.
- How do the spending habits of high-income earners compare to those of lower-income households, and what are the underlying causes of this disparity?
- This economic disparity reflects a widening gap between high and low earners. While the top 10 percent significantly increased spending, exceeding inflation by a considerable margin, the bottom 80 percent barely outpaced inflation. This trend is further evidenced by Bank of America data showing faster credit and debit card spending growth among the richest third of customers compared to the lowest-earning third.
- What are the potential long-term consequences of the US economy's dependence on high-income consumer spending, and what are the underlying factors driving this trend?
- The US economy's over-reliance on high-earner spending poses significant risks. A stock market downturn or decline in home values could trigger a reduction in spending by the wealthy, leading to a substantial economic contraction. This vulnerability is exacerbated by decreased consumer confidence following Donald Trump's return to the White House, evidenced by a 5 percent drop in consumer sentiment since his return and the underperformance of Wall Street in comparison to European markets.
Cognitive Concepts
Framing Bias
The article frames the economic reliance on high-income earners in a way that emphasizes the potential negative consequences of a decline in their spending. The headline, while not explicitly stated, implies concern over the economy's dependence on the wealthy. The frequent mention of luxury spending by the wealthy reinforces this focus, while the decreased spending of lower and middle classes is presented as a secondary issue. The use of phrases like 'exhausted by inflation' to describe lower-income earners, while factually accurate, contributes to this framing by implicitly contrasting their struggles against the financial well-being of the wealthy.
Language Bias
The article uses language that subtly favors the perspective of high-income earners. Describing the wealthy as 'well-off' is a positive connotation, while describing lower-income earners as 'cutting back' or 'exhausted' implies vulnerability. The phrase 'ramping up their spending' to describe the wealthy also carries a positive connotation. The term 'shell out' used when describing the spending of the rich is mildly negative but pales in comparison to the negative framing of the lower earners. Neutral alternatives could include 'increasing their spending', 'reducing their spending', 'experiencing decreased spending' and 'experiencing increased spending'.
Bias by Omission
The article focuses heavily on the spending habits of the wealthiest Americans and their impact on the economy, but it omits discussion of potential government policies or interventions aimed at addressing economic inequality or stimulating spending among lower-income groups. It also doesn't explore alternative economic models less reliant on high-end consumer spending. While acknowledging the impact of inflation on lower earners, it lacks a detailed exploration of the specific challenges faced by these groups, such as job security or access to affordable housing and healthcare. The article briefly mentions the impact of consumer sentiment and potential market downturns, but lacks in-depth analysis of other economic factors that could influence the US economy.
False Dichotomy
The article presents a somewhat false dichotomy by heavily contrasting the spending habits of the top 10% with the rest of the population, implying a direct causal relationship between the wealth of the top 10% and the overall economic health. It doesn't sufficiently explore the complexities of economic systems or other contributing factors to economic growth. The narrative subtly suggests that the economy is either thriving due to the spending of the wealthy or is threatened if they decrease spending, overlooking other potential drivers of economic growth.
Gender Bias
The article does not exhibit overt gender bias in its language or sourcing. However, it could benefit from a more explicit examination of how gender might intersect with economic disparities. The lack of gender-disaggregated data on spending and wealth prevents a comprehensive assessment of the issue.
Sustainable Development Goals
The article highlights the growing income inequality in the US, where the top 10% of earners account for a disproportionately large share of consumer spending, impacting economic growth and exacerbating the gap between the rich and the poor. This reliance on high-income earners for economic growth makes the economy vulnerable and unsustainable. The widening gap in spending between high and low earners demonstrates a failure to promote inclusive and sustainable economic growth, which is a core tenet of SDG 10.