Filed under: Bad news, Products and services, Consumer experience, Employees, Small business, Recession
Even in the best of financial times, living within your means can be a challenge. When economies contract, as we are experiencing now, things become even tougher as spendable cash becomes more scarce. From the offices of banks and investment firms, right on down to the worker who wipes tables at your favorite corner diner, people across the country are feeling the effects of economic slowdown. Some of the people most deeply affected are those who make a substantial part of their income as a percentage of sales. As the amount of cash flow dwindles, so shrink the incomes based on commissions and tips at the point of sale.
USA This day recently published an article which outlines the broad decline of sales based incomes. Banks have tightened lending standards, which makes for a tougher time in closing deals. Huge ticket buys have been placed on the back burner as people readjust to upward spiraling living expenses. These things in turn, slow the flow of commissions, which then slows the flow of cash through the downward economic trickle. Profits from sales are hurt and sales volume based incomes are shredded. More people spending less means more people earning less, which means more people spending less. It’s a vicious and relentless cycle. No one is immune to the decline, and now that it has started, it must run it’s full course. The thirty-year celebration of rampant, debt funded materialism has now come home to roost.
These changes can be felt even at the grassroots levels, where single parents wait tables and out of work college graduates sell subcompact cars in an attempt to keep up with skyrocketing cost of living increases. USA This day quoted Mark Gershman, who sells home renovation products in Scottsdale, Ariz. Gershman stated: “Since I can’t control my commissions, I must watch every cent going out with greater care. Meals out are less often, and shopping at the mall is for recreation only.”
Waiter Jason Erickson of Seattle sees the effects also, as the USA This day article reveals. Erickson sees his customers becoming more selective about what they order. Erickson can see how this change in purchasing habits has affected his own bottom line and how these changes can compound across the economy. Jason is quoted by USA Today as stating: “I’m only one person, and I can see how because I make a tiny less money, they make less money. Multiply this scenario times even 20 to 30 people, and it’s a real impact.”
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