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Are fewer fast food joints a sign poor Americans are getting poorer?

What it means: American fast-food joints had 2.6 percent fewer customers this year than in 2017. That might not sound like much, but it’s a big drop in business terms, and it has left many of them unable to pay their bills. Several have shut up shop or filed for bankruptcy. Todd Penegor, the Chief Exec of Wendy’s (a burger chain) says the reason for the fast food industry’s declining sales is that fewer poorer people are stopping by for a bite.

This could be a good thing. Fast food, delicious as it may be, is not very good for you. If Americans are ditching fast food for healthier options that should mean they’re less likely to suffer from disease, disability and early death. That could be particularly great news for low-income Americans, who are more likely to struggle to pay their medical bills and to run into financial problems if poor health means they have to take time off work.

But Todd reckons that’s not what’s going on. Instead, he says that even though the US economy is growing (producing more stuff, basically), the extra wealth isn’t reaching the poorest. That means they have less cash in their pocket to eat out with. Other analysts agree, pointing out that there’s a lot less building work going on in America these days, which means less builders popping into chippies on their lunch break.

If former fast food customers are indeed spending less money eating out (as opposed to spending that money in other, healthier food shops), that’s likely to bad news for the 3.8 million Americans who currently work in fast food joints. (They also tend to be low-paid, earning an average of $13,000 a year). After all, if these businesses aren't making a lot of money, few new ones will be set up and existing ones will hire fewer staff. And lots of people finding themselves unemployed is the sort of thing that can have big negative effects on the wider economy.

Read our explainer on economic inequality.

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