I sorta knew much of what the author writes, but it's still a bit shocking to see it laid out, in hard numbers, that many consumers at the lower end of the income spectrum no longer matter in the US economy:

> What we do see are troubling signs that low- and middle-income consumers are fading in the economic data. The top 10% of earners now account for about half of consumer spending, the highest share since at least 1989, according to an analysis by Moody’s Analytics. The top earners’ share of spending has trended higher since the early 1990s from a low of 35%, matching a rise in income inequality over the same time. Meanwhile, the bottom 60% of wage earners account for less than a fifth of consumption, down from more than 26% three decades ago.

Having such a large portion of the population not matter anymore, from an economic standpoint, doesn't seem... sustainable.

> Most urgently, if the economy can thrive without the spending of some 80 million workers and their households, what incentive do businesses have to serve them or policymakers to support them?

Neither the claim nor the implied conclusion holds water. If the top 10% of earners account for half of spending, it means that 90% account for the other half, which is not insignificant or "invisible". On top of that, the marginal propensity to consume (MPC) is repeatedly shown in economic studies to be higher for lower-income groups [0]:

> For low-wealth households, the MPC is 10 times larger than it is for wealthy households.

Due to the higher MPC, there is clear policy and business incentive to support and market to lower-income households. And even if the economy grows despite a smaller share of consumption from lower-income groups, it does not imply that if the consumption were to fall even further ("without the spending"), that there wouldn't be deleterious effects on the economy as a whole.

0: https://www.bostonfed.org/publications/research-department-w...

The title is hyperbolic as is the weak assertion that "broad swaths may no longer have influence..."

Publicly available data show that the middle 40% are responsible for more than one-third of consumption; the labor force is large and strong; and lower income spending is relatively flat over the past ~10 years.

The upper income group is indeed spending more--and that is something to watch carefully with respect to broader market business trends. There may even be opportunities to exploit if the smaller segments are less served.

What Is a Parallel Economy and Why Does It Exist?

https://accountinginsights.org/what-is-a-parallel-economy-an...

I remember a citigroup analysis that described this as "Plutonomy" back in 2005. The trend is old, and is continuing.

https://delong.typepad.com/plutonomy-1.pdf

https://archive.is/so6lp

https://marshallbrain.com/manna1

Obligatory Manna link