"Small" Economic Options Continue to Disappear

Why has there not been more attention to the ongoing loss of "small" economic options? After all, many such consumption possibilities are more in line with the income/wage potential that many jobs actually represent. This will doubtless be true as well, for plenty of near future employment prospects. By way of example, Ryan Avent stressed in The Wealth of Humans some years earlier, the political turmoil we can expect to endure until we finally face the fact near term employment won't be as fully compensated, as what transpired in the 20th century.

So why do we continue getting larger product offerings, in light of the relatively smaller incomes many now experience? The "larger is better" rational, also shows up in what U.S. auto manufacturers are currently able to profitably produce. (How much do land prices which reflect limited productive agglomeration, affect this reality?) While President Trump is frustrated with GM for closing more plants, as a Reuter's article noted, "Car market collapse outruns GM moves to keep up." Much concern understandably highlight losses of good jobs with benefits. Nevertheless, consider some not so obvious features of this production reality, since,

This year, sedans will account for less than a third of light vehicle sales.

What does that suggest for the millions who don't prefer heavier vehicles such as trucks or SUVs as transportation? How much of this reality comes down to wide income divergence? Many with high income levels, will of course continue to purchase either high quality import sedans or high quality local versions. What is increasingly missing, however, are the millions of consumers who once bought small sedans because they were economical. How many among this latter group, face the reality of small wages which have become insufficient for the total costs of transportation? And how many rural residents can't realistically be expected to benefit from companies such as Uber?

While it makes little sense to demand that economic (or "affordable") vehicles continue being built, we still need a reasoned and productive response to what is occurring in the marketplace. After all, the "dollar vote" has already spoken, and worse, it represents a form of economic exit. What are the production and consumption options that would make it more realistic, for low wage individuals to reengage in economic life? Factories will sometimes need to close when there's too little profit. But there's still the larger issue: How could society respond to this latest indicator of lost social mobility for those with small wages? As previous "small" economic options continue give way to "large" marketplace options, only recall, how little innovative product actually exists in the pipeline, which could effectively correspond to the market potential of relatively small wages.

We need sustainable production and consumption models which take the reality of widespread small incomes into account. For example: Without such options, we end up with head scratching examples of "improved" services access such as a single Texas Walmart which will offer mental health care for rural residents. This service offering is "only" $140 for an initial session, and $110 for follow up sessions! Seriously? Where are the good friends who might patiently listen to our occasional life struggles, when we really need them?

In all of this, we can't just focus on the power struggles of "good" job preservation, given underlying trends which are changing overall consumption patterns. Yet aggregate output is always going to depend on total participation in our workplaces and marketplaces. And even if we don't respond to why people disengage, ignoring this factor won't take away the ripple effects of limited labour force participation.

Likewise, the loss of small consumption options with few viable replacements, doubtless contributes to lost social mobility. How much of "skills mismatch" in the workplace is really about the lost economic options that were once available to individuals with small budgets? People of a certain age such as myself, remember well when it was possible to move cross country with only $250 in one's pocket. As Timothy Taylor noted regarding lost social mobility, it's a "legitimate public concern". And, as production and consumption possibilities for low incomes continue to be left out of the economic equation, is this not a factor in the lower growth trajectory we've inadvertently followed since the Great Recession?

Of late, the majority of profit and non profit activity tends to be focused on large economic options for production and consumption. Can we create a for profit, capable of embedding an (apparently) "odd" category of "small" economic options? If nothing else, we could envision small scale economic dynamism as not for profit endeavour, even though it would ultimately lead to extensive new wealth creation. We shouldn't have to rely on Dollar General Stores and the developing nations of the world, to supply what have become practically our only "small" economic options. Let's accomplish the same with walkable communities, new productive agglomeration which could ease land costs, new tradable sector building components, and a more dynamic non tradable sector, as well.