Wal-Mart the party pooper
Just when our government joyously proclaimed the start of better economic times, Wal-Mart Stores, the nation's largest retailer, told the truth and pooped the party. Ordinary Americans, said Wal-Mart's chief executive, H. Lee Scott, are living with tight budgets, proof that they don't yet see the better times the government does. They're filling the aisles but they're buying the cheapest items, he said. And they're doing paycheck shopping. "By the 15th of the month, you have the beginning of a V. Then, on the 16th, you have the V going back up again," The New York Times quoted Wal-Mart spokesman Tom Williams as saying.
American consumers, whose collective spending accounts for a whopping two-thirds of the country's economic activity, appear to be living from paycheck to paycheck. If that's so, the holiday shopping season won't be that robust after all.
But Wal-Mart also said that while its fourth-quarter earnings will be better than those in the fourth-quarter of 2002, it's because the 2002 period was so weak, not because of any surge in consumer spending. All this truth was too much for the stock market. Stocks fell that day (Nov. 13).
In this issue of TNJ, Deborah Wright, president and CEO of Carver Bancorp, and David Hinson, a principal of Wealth Management Network, reveal the disturbing truths behind the much touted income growth of Blacks in America. While a growing Black middle class continues to enjoy prosperity, says Wright in her Final Word, "I'm worried about the limited ability of Black people and Black institutions to benefit from the huge potential of our communities, just when that potential is becoming reality." And Hinson warns in his Viewpoint that, to sustain a middle class lifestyle after retirement, an individual will have to have an average net worth of at least $2.5 million, which most Blacks do not.
These cautionary comments on the eve of the most anticipated holidays of the year are not meant to dampen our celebrations. Rather, they are reminders of our responsibility to the long-term economic well being of ourselves, our families and our communities. This emphasis on responsibility comes out forcefully in our cover story of Bruce Gordon, president of Verizon's Retail Markets unit. One of the most powerful Blacks in corporate America, Gordon uses his position to empower other African-Americans, not only within Verizon, but also in the wider corporate community.
Blacks in America have a lot to celebrate, as we show in our stories about the hospitality industry, the Black Retail Action Group, Nigeria's historic satellite launch, and Ron Daniels' planned cruise to Haiti. And, though few, there are even happy notes in Herb Boyd's Year in Review. But to celebrate without the wisdom and guidance that comes from truth is to celebrate irresponsibly.
That said, TNJ wishes you all the best for the holidays and the New Year.
By Rosalind McLymont