Goodbye, middle class

[andy158]

An interesting article highlighting indicators that the middle class is a dying breed.

Goodbye, middle class
The rich get richer, as the rest of us drown in the tub
Sunday, September 26, 2010
By Sally Kalson, Pittsburgh Post-Gazette

It wasn't that long ago that Republicans talked about shrinking government down to where it could be drowned in the bathtub.

That's exactly what's happening now to the middle class. It's being shrunk by the low-wage global labor pool. If we keep going this way, the influence of the middle class as a voting bloc will, eventually, be drowned in the gold-plated bathtub of the country's monied interests.

Increasingly, American companies are shipping jobs to destitute people overseas willing to work long hours for a fraction of what American workers need to get by. The good jobs that used to pay the mortgage, grocery and doctor bills, with enough left to save for a vacation and the kids' college fund, are outsourced to places like China (where a garment worker makes 86 cents an hour) and Cambodia (where the wage is 22 cents an hour). Meanwhile, some 40 percent of employed Americans are working in service jobs, often very low paying.

This phenomenon, combined with automation and the ongoing effects of the economic meltdown, are the job killers today, much more so than government taxing and spending. In fact, it's government programs that prevent people forced into lower wage jobs from cracking their heads wide open on the pavement.

Unemployment compensation, food stamps, child care subsidies, Aid to Families with Dependent Children, Social Security, Medicare, Medicaid and health care reform measures that keep children up to age 26 on their parents' insurance policies and prevent insurance companies from excluding children with pre-existing conditions or cancelling a policy when you get sick -- all of these things mitigate the effects of global forces beyond workers' control.

But even as the middle class dwindles, it is being exhorted to vote against its own well-being by monied interests bent on maintaining or increasing their already overwhelming advantages. Extending the Bush tax cuts for the wealthiest Americans is a prime example.

Using scare tactics and demagoguery (Socialism! Communism!) -- and, thanks to the Supreme Court, unlimited financing of campaign messages -- these wealthy interests are working overtime to turn middle class voters against themselves.

Add to that what we know about voting by the low-income and poor (who tend not to) and disillusionment with the Obama administration, which inherited a mess and has not improved it enough to suit many Americans, and we're heading into a midterm election where voter anger, even if it's misplaced, could carry the day.

Meanwhile, the rich keep getting richer. The new Forbes Magazine list of the 400 wealthiest Americans shows their total worth up 8 percent in just the past year, to $1.3 trillion. That's far above the 1 percent rise in the Standard & Poor 500. Furthermore, the magazine said, more than half of those on the list are richer than they were a year ago.

This is not to say that 400 rich people are running the county. Not entirely, anyway. But if you don't think that current tax policies, incentives and special deals have enriched the wealthy at the expense of everyone else, then take a look at these statistics.

They were released in July by Michael Snyder, editor of theeconomiccollapseblog.com. He collected 22 indicators that, he wrote, "prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America." Here are some of them.

• 83 percent of U.S. stocks are in the hands of 1 percent of the people.

• 61 percent of Americans "always or usually" live paycheck to paycheck, up from 43 percent in 2007.

• 66 percent of the income growth between 2001 and 2007 went to the top 1 percent of Americans.

• 43 percent have less than $10,000 saved for retirement.

• 24 percent of workers say they have postponed their planned retirement age in the past year.

• Over 1.4 million people filed for personal bankruptcy in 2009, a 32 percent increase over 2008.

• Only the top 5 percent of U.S. households have earned enough income to match the rise in housing costs since 1975.

• For the first time in U.S. history, banks own a greater share of residential housing net worth in the U.S. than all individual Americans put together.

• In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.

• As of 2007, the bottom 80 percent of American households held about 7 percent of liquid financial assets. The bottom 50 percent of income earners now collectively own less than 1 percent of the nation's wealth.

• Average Wall Street bonuses for 2009 were up 17 percent from 2008.

• The top 1 percent of U.S. households own nearly twice as much of America's corporate wealth as 15 years ago.

• The average time needed to find a job has risen to a record 35.2 weeks.

• For the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects 43 million in 2011.

• Some 21 percent of children in the United States are living below the poverty line -- the highest rate in 20 years.

• Even with the financial crisis, the number of U.S. millionaires rose a whopping 16 percent to 7.8 million in 2009.

This is where we are. And things will get even worse if the election brings more tax cuts for the wealthy or less regulation to "free up" big business to make even more money.

The demagogues will rail against "socialism." What the voters should really be worried about is oligarchy.



Read more: http://www.post-gazette.com/pg/10269...#ixzz10hW6jtmb

[AngelinaCat]

You can thank Lyndon Baines Johnson, and his Great Society Programs for part of the current state of affairs. When women are encouraged to be Welfare broodmares, just to get the public dole, that is just WRONG, pure and simple.

Also, the so-called wealthy, are usually small businesspeople just like you and me. They don't declare their earnings on a corporate Income Tax form, but on their own personal Income Tax forms. So what looks like the 'evil rich' making $250,000 or more a year, are small businesses trying to eke it out, and their so-called wealth is capital for the business.

I hope and invite some small business folks to opine on this matter.

Thanks

[WhatMoney]

I agree with the OP posted article. It is not the government who is your enemy and making you poorer. And small businesses are going out of business for the very reasons given in the article - they can no longer compete with corporations selling products made with overseas wage rates. Blaming the Great Society and "welfare queens" for our present situation is about as nonsensical as blaming the moon for the the price of gasoline.

And these very corporations are spending millions on propaganda to deflect the blame. They know working people do not have the time or education to know history or the facts, and are gullible enough to listen to their mouthpieces on talk radio and Fox news. There has never been such a giant deception of the masses by corporate power in this country. And reading some of the opinions on this board shows how effective they have been in getting the middle class and poor to play right into their hands.

[houston7]

Count me in as someone who agrees with Whatmoney and the OP posted article. Don't worry Whatmoney, anyone with Republican or Independant leanings will fall right into the "blame game" trap right from the mouthpiece propaganda playbook.
I wouldn't hold my breath waiting for the brainwashed masses to offer up any concrete solutions.

[backtoschool]

I agree with the OP posted article. It is not the government who is your enemy and making you poorer. And small businesses are going out of business for the very reasons given in the article - they can no longer compete with corporations selling products made with overseas wage rates. Blaming the Great Society and "welfare queens" for our present situation is about as nonsensical as blaming the moon for the the price of gasoline.

And these very corporations are spending millions on propaganda to deflect the blame. They know working people do not have the time or education to know history or the facts, and are gullible enough to listen to their mouthpieces on talk radio and Fox news. There has never been such a giant deception of the masses by corporate power in this country. And reading some of the opinions on this board shows how effective they have been in getting the middle class and poor to play right into their hands.

I totally agree with WhatMoney on this point. The middle class is disappearing because manufacturing jobs are disappearing. Wages are going down, jobs are going to the third world, and prices are going up. The Johnson era has absolutely nothing to do with it. The Johnson era made education more accessible which actually increased opportunities for the middle class. Welfare recipients have never been considered middle class, so I am not sure what they would have to do with a disappearing middle class. If we continue to outsource all of our manufacturing, then we will continue to lose our middle class.

[Tman]

I agree with the gist of the OP. The fact is, is that our once great republic has been bought and paid for by corporations. And now thanks to the Supreme Court, there may be no turning back. The completely unconstitutional extension of "special" first amendment rights to corporations completely undermines the democratic principles upon which our nation was built. While we as private citizens may only donate a very limited amount to a candidate, the large multinational corporations will be able to spend unlimited amounts to influence voters. Just who do you think the politicians will actually represent, you and your $2,500 or Exxon Mobil and its billions of dollars?

[banca rotta]

The one thing that always gets me is while the majority of Americans agree with this post I will bet you that soon when black Friday comes you will see all the sheeple up at 5am, standing in line supporting large business that pay low wages and import Chinese and vietnamese crap!

I'm getting just a little tired of people supporting the same system thats killing us all off. Even with the coming election you can bet nothing will change but if we all vote with our wallets it will change for certain.

I say from this point forward the sheeple should cancel things like Christmas in it's present form and spend the money that would go to the fat cats and the chinese on any American businesses we have left.

Maybe take the family away for a weekend at a bed and breakfast and or watch a show and go to dinner.

Move any savings to a small community bank or credit union.

Ghandi bankrupted the British empire by leading his people away from English made stuff.

Sadly this aint going to happen. This holiday you will see more of the same and the newly bankrupt and unemployed will be here wondering just how they got here.

[WhatMoney]

The one thing that always gets me is while the majority of Americans agree with this post I will bet you that soon when black Friday comes you will see all the sheeple up at 5am, standing in line supporting large business that pay low wages and import Chinese and vietnamese crap!

You're darn tooting I'll be out there buying on Black Friday. Except I won't get up at 5am and stand in the rain at Best Buy to get the only two sale items in stock on Friday morning. I'll be waiting for the Black Friday online sales to go in effect at Midnight and calmly order and pay with my Pal Pal card. I'm supporting Americans, since PayPal is still located in the US and someone must run their computers.

I got my fancy Canon digital camera last Black Friday for $100 less than it's ever sold for since, online w/ free shipping. What brand of digital camera do you have that is Made In America? If we were to all restrict ourselves to American made goods, I'd mostly be buying local produce and craft items. Even our vine-grown hot-house tomatoes come from Canada. I love tomatoes.

Can you name a single part in that computer you're typing on that is Made in America? Even your Intel CPU is diffused in plants around the world, and the wafers sent to Costa Rica or Indonesia to be sawed up into die and packaged.

I think Christmas should be cancelled though. Except for Oregon-grown Christmas trees of course.

More Christmas trees are grown in Oregon than in any other state in the country. Oregon growers will harvest about eight million Christmas trees this year.

[chrisdfw]

The middle class is normally defines as those making near the average or median income. By definition there will always statistically be a middle class. The fact is our standard or living in this country was based on an unsustainable level of debt and spending. Perhaps if eveyrone didn't expect to have three cars, air conditioning, cable television, telephone, cellular phones, internet etc, they could get by.

My grandparents had none of those things and made it. We need to dial back the consumption a bit to more sustainable levels and be willing to earn things. Who says someone is entitled to a cushy office job making 35,000 a year? Nobody, go and make yourself worth more in the global market. This country has gone from rugged individualists to a bunch of whiny crying pansies that don't know anything about work or living beneath their means... I could easily show people how to get by on 30,000 a year if they were willing to live like people lived 50 years ago or like most people do everywhere else in the world. Shut off the cable and the air conditioner, wear a sweater in the winter to conserve fuel, get rid of the second car, boat, etc. Utilities are a big deal, the average family uses more utility services now than people paid in house notes just a few generations ago. 250 dollar electric bills don't happen without air conditioning, computers, television, etc. 100 cable, phone, internet bills are not necessary to living, just a luxury... which is fine if you can afford it, but too many people are going hungry or without medical care while they sit in front of their TV, watching cable, in air conditioned luxury, expecting me to subsidize their extravagant standard of living.

Buy a two bedroon house or rent one instead of the 4 bedroon house in suburbia. Have the kids share bedrooms like they did in the past. Turn off the air conditioning and keep the heater at 60 or less. Get rid of the cable, phone, and internet, use the library your taxes pay for. Bike or walk there to save on car insurance and get in shape, thereby saving money on healthcare. Read a book. Drive a simple car instead of the 25000 new car.The insurance will be less too. Quit eating out. Maybe even plant a garden. Get some board games.

[backtoschool]

The middle class is normally defines as those making near the average or median income. By definition there will always statistically be a middle class. The fact is our standard or living in this country was based on an unsustainable level of debt and spending. Perhaps if eveyrone didn't expect to have three cars, air conditioning, cable television, telephone, cellular phones, internet etc, they could get by.

My grandparents had none of those things and made it. We need to dial back the consumption a bit to more sustainable levels and be willing to earn things. Who says someone is entitled to a cushy office job making 35,000 a year? Nobody, go and make yourself worth more in the global market. This country has gone from rugged individualists to a bunch of whiny crying pansies that don't know anything about work or living beneath their means... I could easily show people how to get by on 30,000 a year if they were willing to live like people lived 50 years ago or like most people do everywhere else in the world. Shut off the cable and the air conditioner, wear a sweater in the winter to conserve fuel, get rid of the second car, boat, etc. Utilities are a big deal, the average family uses more utility services now than people paid in house notes just a few generations ago. 250 dollar electric bills don't happen without air conditioning, computers, television, etc. 100 cable, phone, internet bills are not necessary to living, just a luxury... which is fine if you can afford it, but too many people are going hungry or without medical care while they sit in front of their TV, watching cable, in air conditioned luxury, expecting me to subsidize their extravagant standard of living.

Buy a two bedroon house or rent one instead of the 4 bedroon house in suburbia. Have the kids share bedrooms like they did in the past. Turn off the air conditioning and keep the heater at 60 or less. Get rid of the cable, phone, and internet, use the library your taxes pay for. Bike or walk there to save on car insurance and get in shape, thereby saving money on healthcare. Read a book. Drive a simple car instead of the 25000 new car.The insurance will be less too. Quit eating out. Maybe even plant a garden. Get some board games.

Why would anyone want to lower their standard of living to such a basic level? The purpose of being in the middle class is to raise our comfort level and our standard of living, not revert to bare sustenance. Basic cable and the ability to cool off in the summer are hardly luxuries. Sure, in temporary periods of economic crisis, cutting back makes sense, but as a long term lifestyle it seems to me to be a burden, not an answer for the middle class. Your example above of what to do to get by on a salary that used to pay for a middle class lifestyle, illustrates the point that the standard of living for the middle class is in downward spiral.

[justbroke]

Everyone was fat, dumb and happy when the Global Economy was in high gear from 2003 to 2007. Now we hate Globalism, Corporations, and the rich. Shame on all of us.

Pledge this: if you hate globalism and that Americans purchase too much stuff from China... then stop shopping at any big box store ending in "Mart".

Unfortunately, Corporations, although not employing the most people, generally have the higher salaries, benefit plans, and actually employ people and grow. A corporation's interest is not to its employees but to its shareholders. It has always been the bottom line. Nothing has changed, only the political climate.

I have no answers to fix any of this, but if we continue to attack certain part of our economy, we may not like the result. Everyone says bring back the 91% tax bracket for the rich, but they NEVER paid 91%, just as the marginal tax rate today, is not paid by the overwhelming majority of truly rich people. Most of their earnings are from capital gains, and not from employment income. They get to enjoy a 15% long term capital gains tax WHEN and IF they decide to take the money out -- which they don't because they buy long term treasury bills (TIPS) for 10, 15, 20 or even 30 years.

Taxation is not simple, and you can't tax your way out of this. The 91% tax rate and the rates after the Great Depression NEVER fixed anything. Just saying that the solution will be a complex one... and needs to be carefully thought about. Not just used as a political tool to woo voters in an election year.

[backtoschool]

Everyone was fat, dumb and happy when the Global Economy was in high gear from 2003 to 2007. Now we hate Globalism, Corporations, and the rich. Shame on all of us.

Pledge this: if you hate globalism and that Americans purchase too much stuff from China... then stop shopping at any big box store ending in "Mart".

Unfortunately, Corporations, although not employing the most people, generally have the higher salaries, benefit plans, and actually employ people and grow. A corporation's interest is not to its employees but to its shareholders. It has always been the bottom line. Nothing has changed, only the political climate.

I have no answers to fix any of this, but if we continue to attack certain part of our economy, we may not like the result. Everyone says bring back the 91% tax bracket for the rich, but they NEVER paid 91%, just as the marginal tax rate today, is not paid by the overwhelming majority of truly rich people. Most of their earnings are from capital gains, and not from employment income. They get to enjoy a 15% long term capital gains tax WHEN and IF they decide to take the money out -- which they don't because they buy long term treasury bills (TIPS) for 10, 15, 20 or even 30 years.

Taxation is not simple, and you can't tax your way out of this. The 91% tax rate and the rates after the Great Depression NEVER fixed anything. Just saying that the solution will be a complex one... and needs to be carefully thought about. Not just used as a political tool to woo voters in an election year.

I agree with you in regards to taxes justbroke. I am not concerned about globalization so much as I am concerned that we longer have a manufacturing base in the country. Without a manufacturing base here, unemployment will be higher and last longer, and the dips in our recessions will last longer as well. We cannot truly grow our economy on services alone in my opinion. Something needs to be made here. It doesn't have to be steel, or even cheap tennis shoes, but we should be investing in new manufacturing industries here to help grow our economy, and therefore our middle class for the future.

[justbroke]

We cannot truly grow our economy on services alone in my opinion. Something needs to be made here.

I am in 1000% agreement. Since 40% of our pre-2008 economical collapse was in financial services, of all things, I knew we were in trouble. Point of fact, I knew we were in trouble when the "services" based businesses (consulting, primarily) started going offshore! I'm in services (cross-sector) and saw a bad trend. During and after the DOT COM boom and bubble, services were still hot and paid very well. However, those jobs have shrunk as well, causing average salaries to decline.

I think that we need to be making stuff too, if not solely for strategic reasons. The automobile industry was the last of the "good" manufacturing jobs. I'm afraid that should manufacturing even re-emerge in North America, we will be talking about low wages, and not the middle-class wages that the auto industry paid. I'm not sure I want us -- Americans -- making sneakers at a U.S./NAFTA sweatshop for $0.85/hour.

You can say I'm wrong, but the "clean energy" jobs are not going to materialize. Nice concept, but even M.I.T. researchers are talking about a 192,000 acre wind farm (300 square miles), just to power Manhattan... off peak. And that's using a technology that hasn't even been created yet. I think that someday, we may get to photoelectric even, but the first "small" green city to do so, is using an incredible amount of land to provide power through photoelectric cells.

I thought it was incredible when, back in the 1990's under Clinton, Electric Boat finished its contracts for the Sea Wolf. Submarines that cost over $1B each. In order to not lay off 10,000 plus people, the administration had EB build 2 more subs that the Navy didn't need... to save jobs. In that respect, I appreciate government. It did keep skilled people working and in good jobs. As a Floridian, I don't know why they laid off 8,000 at NASA for the space program. Good paying jobs. Perhaps Clinton had it easier with the DOT COM boom and the upside of a bull market on his side.

I digress.

[backtoschool]

I am in 1000% agreement. Since 40% of our pre-2008 economical collapse was in financial services, of all things, I knew we were in trouble. Point of fact, I knew we were in trouble when the "services" based businesses (consulting, primarily) started going offshore! I'm in services (cross-sector) and saw a bad trend. During and after the DOT COM boom and bubble, services were still hot and paid very well. However, those jobs have shrunk as well, causing average salaries to decline.

I think that we need to be making stuff too, if not solely for strategic reasons. The automobile industry was the last of the "good" manufacturing jobs. I'm afraid that should manufacturing even re-emerge in North America, we will be talking about low wages, and not the middle-class wages that the auto industry paid. I'm not sure I want us -- Americans -- making sneakers at a U.S./NAFTA sweatshop for $0.85/hour.

You can say I'm wrong, but the "clean energy" jobs are not going to materialize. Nice concept, but even M.I.T. researchers are talking about a 192,000 acre wind farm (300 square miles), just to power Manhattan... off peak. And that's using a technology that hasn't even been created yet. I think that someday, we may get to photoelectric even, but the first "small" green city to do so, is using an incredible amount of land to provide power through photoelectric cells.

I thought it was incredible when, back in the 1990's under Clinton, Electric Boat finished its contracts for the Sea Wolf. Submarines that cost over $1B each. In order to not lay off 10,000 plus people, the administration had EB build 2 more subs that the Navy didn't need... to save jobs. In that respect, I appreciate government. It did keep skilled people working and in good jobs. As a Floridian, I don't know why they laid off 8,000 at NASA for the space program. Good paying jobs. Perhaps Clinton had it easier with the DOT COM boom and the upside of a bull market on his side.

I digress.

I agree with you that "green" technology and manufacturing jobs are for the most part hype at this point. But hopefully when we get past the research stage, at least manufacturing solar panels and batteries for electric cars will be viable industries that employ former auto workers.

We can never go back to making sneakers, toys, electronics, or any of the things that are made in developing countries now. So, we have no choice but to come up with new things to make here. Innovation is where we as a country excel anyway, so I am hopeful that this can be done.

[chrisdfw]

Why would anyone want to lower their standard of living to such a basic level? The purpose of being in the middle class is to raise our comfort level and our standard of living, not revert to bare sustenance. Basic cable and the ability to cool off in the summer are hardly luxuries. Sure, in temporary periods of economic crisis, cutting back makes sense, but as a long term lifestyle it seems to me to be a burden, not an answer for the middle class. Your example above of what to do to get by on a salary that used to pay for a middle class lifestyle, illustrates the point that the standard of living for the middle class is in downward spiral.

The fact that a middle class lifestyle ever got to the point where EVERYONE feels entitled to those LUXURIES was and is pure insanity. Even the poor having running water, air conditioning, cars, cable, etc in our country. I am not against anyone having anything they earn, but if we think the planet can support everyone having these things I think we will be in for a rude awakening.

The living standard may be in a downward spiral compared to the excessives of the last half century, but there was a time in the not too distant past where everyone didn't have these things and many of the things we enjoy. We got spoiled in the recent past and need to accept sanity. Everyone may not get to have each child with their own bedroom. The rest of the world doesn't. They survive and thrive sharing bedrooms in houses without formal dining rooms, and without second cars, even first cars.

Compare standards of living objectively to 50 years ago and we aren't really in a downwards spiral, just compared to the last 50 years of a the credit fueled bubble that has yet fully pop.