Disappearing Middle Class in America

[Lupino]

A friend sent me the story, found it very interesting (and depressing)
Link

The 22 statistics detailed here prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America.

The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.

So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.

Here are the statistics to prove it:

• 83 percent of all U.S. stocks are in the hands of 1 percent of the people.
• 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
• 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
• 36 percent of Americans say that they don't contribute anything to retirement savings.
• A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
• 24 percent of American workers say that they have postponed their planned retirement age in the past year.
• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
• Only the top 5 percent of U.S. households have earned enough additional 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 United States 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% of the liquid financial assets.
• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
• Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
• In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
• The top 1 percent of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.
• In America today, the average time needed to find a job has risen to a record 35.2 weeks.
• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.
• or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
• This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
• Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.
• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
• The top 10 percent of Americans now earn around 50 percent of our national income.

Giant Sucking Sound

The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker 10 times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool.

What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are "less attractive" than ever. Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States.

So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay.

What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about six unemployed Americans for every new job opening in the United States, and the number of "chronically unemployed" is absolutely soaring. There simply are not nearly enough jobs for everyone.

Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs.

But you can't raise a family on what you make flipping burgers at McDonald's or on what you bring in from greeting customers down at the local Wal-Mart.

The truth is that the middle class in America is dying -- and once it is gone it will be incredibly difficult to rebuild.

Some of this I already knew (the explosion in executive pay vs. employee pay) and some of it wasn't all that surprising (Bush tax cuts primarily benefit the rich? no way!), but perhaps the most worrying statistic was the number of people living paycheck to paycheck. That's just a disaster waiting to happen, especially with so few having any safety net and in an environment where finding a job is nigh impossible.

Perhaps the only silver lining is that all that cheap overseas labor is starting to disappear. If labor costs start to rise in the developed third world countries, corporations are going to have less reason to move there. Since governments seem unwilling to punish them in any other way lest we hurt their bottom line, that seems to be our only ticket out of this mess.

[DemolitionSquid]

And they degrade me for promoting socialist policies. I really hope you're enjoying your wonderful Capitalism, America.

[Kacaier]

And they degrade me for promoting socialist policies. I really hope you're enjoying your wonderful Capitalism, America.

Canada is hardly that socialist. All socialism ever means anymore nowadays is government control of key industries, normally things people consider necessary (medicine). Otherwise, in terms of industry, Canada is just as capitalistic. However, I assume you probably want Canada to be more socialist.

Anyhow, I don't really see any solution to this problem. Looks like the standard of living will have to go down, or the rest of the world has to go up, in which it'll create an equilibrium. It just goes to show that your nation being the richest at the detriment of others will bite you in the rear later on.

[DemolitionSquid]

Canada is hardly that socialist. All socialism ever means anymore nowadays is government control of key industries, normally things people consider necessary (medicine). Otherwise, in terms of industry, Canada is just as capitalistic. However, I assume you probably want Canada to be more socialist.

Anyhow, I don't really see any solution to this problem. Looks like the standard of living will have to go down, or the rest of the world has to go up, in which it'll create an equilibrium. It just goes to show that your nation being the richest at the detriment of others will bite you in the rear later on.

Exactly. America is so afraid of the world socialism, they equate it with communism, and its pathetic. They've been lied to by "the man" for so long, their ignorance is killing them. I gladly pay slightly higher taxes for universal health care, reliable public transportation, good welfare and pensions. Wheras most Americans who take having a minimum wage for granted don't even realize its a socialist policy.

[Roland]

And they degrade me for promoting socialist policies. I really hope you're enjoying your wonderful Capitalism, America.

COMMIEunist! i KNEW THE sOVIEET uNION NEVER FELL1we BEAT AYOU TO teH MOON.you cant baet U.S.. BECUZ texas has gun and also FREE SPEECE.UNITED NATIONs of America W1LL WIN WORLD W3!

That's Glen Beck at ages 4-40.

I reserve judgement on the socialism vs. capitalism thing though. It's bizarre to me how there seems to be no such thing universal agreement in economics, and I figure that if economists can figure it out I shouldn't try.

[Visions of Khas]

I don't think it helps that we've allowed our manufacturing industry to fall to a measly shadow of its former self. Or that banks lobby government to loosen restrictions, then sell derivatives and financial swaps without anything tangible to support them. Like GE Capital. God I hate GE Capital.

I like that in times of economic success with advocate privatization, and in times of economic decline we socialize.

[DemolitionSquid]

I don't think it helps that we've allowed our manufacturing industry to fall to a measly shadow of its former self.

THIS. Holy shit, THIS.

Germany and Japan were huge manufactures. The USA wanted nothing to do with WW2, wasn't their problem, its only after Pearl Harbor was attacked they gave a shit and join in. The USA built thousands of factories to create weapons and transports to defeat the Nazi's. It was also the perfect solution to create jobs and an economy to get back on track after the Great Depression. Once WW2 was over, the two former industrial powerhouses were defeated and the USA was left with the largest manufacturing force in the world. This is how the USA got so rich so fast in the 50's, they were the only country with the ability to produce and ship and absurd number of products. Of course, over time, Japan and Germany and other countries started to rebuild their infrastructure, while the USA started to consume more and get greedy, shutting down their massive work force and factories.

And that is how the USA ended up being where they are today. With minimal production and export, and rampant consumption and import. They're hemorrhaging money to other countries, and the money they do save is being held by 5% of the country as the rest suffers.

[Noctis]

The US is now a service based economy not manufacturing, to be completely honest that is natural economic progression.

Time will tell if this changes, statistics are probably skewed considering recent events, many people are claiming to be poor now so...their definition of 'poor' could be off.

[DemolitionSquid]

The US is now a service based economy not manufacturing, to be completely honest that is natural economic progression.

Time will tell if this changes, statistics are probably skewed considering recent events, many people are claiming to be poor now so...their definition of 'poor' could be off.

The problem isn't the transition from a manufacturing based economy to a service based economy. The problem is the money entering and exiting the country because of that transition. For an economy to grow and a country to be come rich, it needs to take money from other countries from exports. If you manufacture a product it can be sent out to other countries, and their money comes into your country. But a lot of services deal in-country only. They get the products they serve to you from another country, ergo your country is losing money. That's why there was that whole "Buy American" fiasco: to keep American's money in America. Large companies outsourcing their manufacturing or services to other countries where its cheaper to hire labor helps save the company money, but in the long run the country they're based in is actually losing money. This is why America is in such deep debt, they've bought more products then they've produced, and outsourced more jobs than they kept in-country.

On the second point: Living paycheck to paycheck and having no money saved up classifies as poor I'd think. It helps no one.

[mikill]

And they degrade me for promoting socialist policies. I really hope you're enjoying your wonderful Capitalism, America.

First America isn't a true capitalist country. Second your socialist ways are lame and I highly disagree with you, I am personnally a liberalist which means I believe in liberty and freedom for both business and the people. I am guessing you live near Ottawa, because of your views.

Exactly. America is so afraid of the world socialism, they equate it with communism, and its pathetic. They've been lied to by "the man" for so long, their ignorance is killing them. I gladly pay slightly higher taxes for universal health care, reliable public transportation, good welfare and pensions. Wheras most Americans who take having a minimum wage for granted don't even realize its a socialist policy.

Do you even know of the damage caused by the Socialist parties in Canada? You the kind of person who wished the NDP to run everything (into the ground). At first I was passionate about the NDP, the unions were going to help us with everything. I was wrong, they added more taxes and forced us to take days off so we wouldn't get our Health Insurance because then they would have to give everyone it. Slightly higher, I think you are very mistaken. With this new HST in Ontario and including all other taxes they are paying almost 50% of there wages to the government. So yes you are working for the Government. Minimum wage isn't a socialist policy it's a liberal one, it makes everyones lowest wage equal. Also to add to that wheres my public transportation? Wheres my good welfare? There are only available for those who are privileged, but it is put out as fair but it's not.

It's not only about yourself with socialism, it's the huge amount of Government control, in the so called service of the people. What the social elite? I should spend my money ($5) on 5 people equally not give $4.50 to one person or Government official.