How do we know income and wealth inequality is soaring in the United States? I’ve been tracking this vital trend for years, largely by following a variety of research efforts that approach the topic from multiple angles, methods, and datasets. But sometimes economic inequality becomes very clear with a single business story.
Most American readers know the Dollar General chain. It specializes in selling low-price items (hence the name) to largely low income people. “Dollar General operates in a space that is immune to Amazon : small purchases of low-margin, inexpensive consumables”, as Seeking Alpha puts it.
How are they faring in the richest nation in the world? Better than ever. Not only did their revenue rise more than 11%, which is impressive, but Dollar General is going to open up new stores. Not just a handful, either. According to their CEO, Todd Vasos:
For fiscal 2018, we have plans to execute approximately 2,000 real estate projects comprised of 900 new stores, 1,000 store remodels and 100 store relocations.
900 new Dollar Generals. That’s 18 per state, on average. “[M]ore stores than McDonald’s has restaurants in the entire country”, according to NPR.
Why I am writing about this? Listen to how Vasos explains his company’s move:
The economy is continuing to create more of our core customer.
The American economy – the one that’s the richest in the world, the one who richest have generated enough money that Swiss banks call our era a new Gilded Age – is creating more poor people. Dollar General is quite naturally – and literally – capitalizing on that.
Vasos went on:
We are putting stores today [in areas] that perhaps five years ago were just on the cusp of probably not being our demographic, and it has now turned to being our demographic.
There are more and more people in more areas that are likely Dollar customers. 247Wall Street describes them as “lower income people in remote locations.”
Why does this matter for the future of education? Several reasons.
First, it’s more evidence that American society is splitting apart, as income inequality (amid other forces, of course) increasingly separates us into ever more distant classes. This has enormous implications for our culture, our society, and obviously our politics. All of that impinges on education.
Second, consider that this story points to a growing underclass. As higher education tries to expand its reach, it will increasingly recruit from people who have to shop at Dollar General. Such students will tend to have weaker secondary school experiences, or be first generation college students, possibly have family and friends wracked by the opioid epidemic. Colleges and universities will have to support them in ways that may represent a cultural shift and/or cost more money, further increasing tuition.
Third, combining these two previous points, we can see the possibility of increased resentment of experts. Since we tend to associate expertise with education, and not inconsequentially income, it shouldn’t surprise us to see Dollar General customers hating those who would direct, teach, regulate, and ultimately rule them.
And a question: who in higher education shops at Dollar General? Answering that question tells us something about our own culture, our inner divides.
How can educators respond to this trend? How will America as a whole?