On the other hand, the poor want to spend but have no money, which gradually leads to excess production capacity in the market. This causes companies to start competing in a race to the bottom, driving profits to dangerously low levels, which sets off a vicious cycle. As company profits decrease, they scale back and lay off employees, making the poor even poorer, and savings become too risky to touch.
I don't think what causes low profit for production companies is only because the poor don't patronize them as a result of no money, No. What for me is the major culprit is high cost of production.
Of course if you assemble your production materials at a high price, you can't be able to immediately shoot the price of goods higher than what is reasonable because if you do that, buyers will shift and go to alternative product and thereby causing you low sales and damages.
Another point is whether the poor don't have money or not, they still purchase what they need. In economics if you study on supply and demand, then you have to consider need and want. So the poor still purchase their need no matter how costly it is because they need it for survival and they must survive. This is why companies should concentrate on what people need and not luxury which will be forgone for need most times.
So availablity of money is not really the reason that the poor don't purchase or cause low profit for production because they purchase what is needed for survival.
It is inflation that has given rise to high cost of production that has led to low profit - recession.