Journey through America into the path of recession

Dateline: Cleveland, USA Summer 2022

The queue was getting longer by the second at the Walmart shop checkout till and the customers in the line were slowly but surely beginning to lose their patience. For over thirty-five minutes, they had waited quietly in line so that they could check through the contents of their supermarket trolley and get home from the heat of another scorching day in the state of Ohio – but for all that time this queue hadn’t moved one single inch. None of them had expected this torturous delay when they arrived at the store in Cleveland’s heartland but the lady at the top of the line was inconsiderably difficult, and the visitors from Ireland behind her in the queue were about to personally meet the first prime example they had seen of the recession now threatening to strike the USA and much more of the western world.

I have been a visitor to Walmart stores many times over the last thirty years of journeys to the east coast of the States. My brother and my late sister and her family have lived there for decades, and I don’t think there has ever been a visit when we haven’t been in the store. The pedigree of this trader is massive. The firm is a popular multinational retailer that operates a chain of spacious supermarkets known locally as supercentres, discount department stores, and grocery stores with 10,585 shops all over the States and in another twenty countries.

Putting it bluntly, nobody on this planet can lay a hand on Walmart when it comes to selling groceries and other stuff under one roof. They are the world’s largest company by revenue, with about 570 billion US dollars in annual revenue, and if the US economy is turning they usually know it first.

The problem at the top of the queue was fairly straightforward; the lady who was trying to check through the contents of her trolley was unable to do so because she didn’t have enough money to pay for them, but it was the way in which she was trying her very best to get around the problem that proved a real eye-opener.


Discount cards

Like so many other leading supermarket chains around the world, a visit to the checkout till at Walmart is not just about taking out your cash or your debit card anymore and trying to pay your bill. It’s now become a much more sophisticated administrative experience dominated by payments which involve plastic discount cards.

Here in Ireland, we are well used to the inquisition about the store loyalty cards – the first question normally faced when it comes to paying up at the till, but as I learned in the Walmart queue, the US experience is a much more complicated one – albeit one aimed at helping people to pay their bills in different ways.

Something known in the US as ‘Healthy Benefits Plus’ for instance is a health plan benefit to cover Medicare approved over-the-counter, health and wellness products. You might look at it at something that VHI or others could add to your annual plan to try and help you meet hefty medical bills, only instead of going to your doctor or consultant and using it, in the USA, it’s a discount card that appears regularly at the till in Walmart. People who have it use the cards on this account to buy qualified items such as ointments or medicines, baby nappies or even just wipes and the health plan usually allows you to purchase over the counter products with no money out of pocket.

So all is good, I hear you say. The card gives extra benefits. Well, that’s the plan anyway but that’s not the way it worked out when we visited the store in Cleveland. It became clear as the lady tried to pay for her stuff that not all the goods in the basket were going to covered by the medical discount cards in her wallets. It was clear that not all of the stuff she was buying was based on the medical needs of herself or her mother (whose card she also was using) and no matter how many times she tried to re-tweak the shop and take our ordinary groceries like bread and milk, a deficit of between ten and twenty dollars remained on the cash register. When the woman opened her purse to try and meet that deficit, the situation did not improve unfortunately. She told the cashier in the end she had four dollars in cash and that was it. The basket was taken away from her and she left.

This unfortunate woman at the head of the till in Cleveland is not alone at the moment – in what is supposed to be one of the world’s richest countries. We learned last week that the US economy will likely fall into recession by the end of 2022 as the Federal Reserve raises rates to tame prices. Economists over here warn that financial conditions will tighten further, consumers’ sentiment is souring, energy and food supply distortions have worsened and the global growth outlook has deteriorated.


Sobering news

This sobering analysis comes as the US Treasury Secretary Janet Yellen said that “unacceptably high” prices are likely to stick with consumers through 2022 and that she expects the US economy to slow down. Rising gas prices right now are also crippling people on low incomes here and no matter which way the lady at the till may turn it’s not going to improve for a while.

The city of Cleveland was deemed the poorest big city in the US in 2019 with 114,000 people living in poverty, including 37,700 children. The data reports 32.7 per cent of people are living in poverty now, a median household income of $30,907 from 2015-2019 and the median gross rent of $719 a week.

At times like this, the people can only turn to organisations like the Boys & Girls Club of Northeast Ohio who try to fill the gap. A bit like our St. Vincent de Paul or Lions Clubs, they were collecting funds outside Walmart’s on the day we visited. For the past two years, Joseph Greathouse has been the director of the Boys & Girls club location in Cleveland’s Broadway neighbourhood. He said for many children, the Boys & Girls Club is the only place for them to really feel safe.

“They know when they enter these doors, one, they’re going to feel loved, two, they’re going to feel safe and they will be fed, so it’s like a home away from home,” he said, “these kids are going home to pay electric bills, put food on the table and they have to grow up quicker and it’s just that cycle over and over and over again that keeps (them) stuck in that same type of way”.

To end our story from the USA, a glimmer of hope. In the end, a passing Good Samaritan followed the lady into the Walmart’s vast car park and gave her the 20-dollar bill she needed to get her critical shopping. She is covered for this week. Next week we’re not so sure. (To be continued).