The slow, painful death of the middle class.

[Purge_WTF]

The Middle Class in America Is Radically Shrinking. Here Are the Stats to Prove it

Posted Jul 15, 2010 02:25pm EDT by Michael Snyder in Recession

From The Business Insider

Editor's note: Michael Snyder is editor of theeconomiccollapseblog. com

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.

Ah, the wonders of globalism.

[tarzan]

Good post and spot on. Another part of the problem are the huge populations in Asia. If there were say only 300 million people in Asia the competition with American workers would be more fair. The fact is as you have more of an item the value decreases. If there were two Ferraris for each person on the planet they would be extremely cheap. Same goes in the value of a life. Because there are so many Asians the value of their life is reduced. And they are competing with each other and the rest of the world for work and are willing to work for next to nothing. Of course essentials like food, water and a roof over their heads is also cheaper to acquire. So they have a competitive advantage compared to an American or European.

There are close to 4 billion people living in Asia. That's more than half of the World's population!

The media has tried to brainwash people into believing globalism is good for Americans. Now people have wised up.

[MM2K]

Oh boy. I dont know whether this came from Pat Buchanaan or some leftist, or Ross Perot. The giant sucking sound phrase in the story makes me think it was Ross Perot. You know, the giant sucking sound that never happened during the 90s after NAFTA, when unempoyment eventually went down to the low 4% range? If we lost so many jobs from NAFTA, we should have been at 1% or 2% unemployment, which might be a statistical impossiblity.

Careful with statistics, many people misread them and forget they represent actual people. Many of the people who used to be poor 15 years ago are now in the middle class category. Many of those statistics that were listed arent bad at all unless you are some utopian hysteric that wishes to live in paradise.

If anything, the middle class have gotten richer, certainly over the past 25 years.

Also, high wage countries like us have been competing with low wage countries like China very well for many many years. That's because inspite of our nominally more expensive labor, we actually have cheaper labor PER UNIT OF OUTPUT because of our cheap and abundant capital wich allows our workers to produce more. But to some extent the US will have to export some jobs because we simply cannot produce everything more efficeintly than any other country.

[HDPhysiques]

Oh boy. I dont know whether this came from Pat Buchanaan or some leftist, or Ross Perot. The giant sucking sound phrase in the story makes me think it was Ross Perot. You know, the giant sucking sound that never happened during the 90s after NAFTA, when unempoyment eventually went down to the low 4% range? If we lost so many jobs from NAFTA, we should have been at 1% or 2% unemployment, which might be a statistical impossiblity.

Careful with statistics, many people misread them and forget they represent actual people. Many of the people who used to be poor 15 years ago are now in the middle class category. Many of those statistics that were listed arent bad at all unless you are some utopian hysteric that wishes to live in paradise.

If anything, the middle class have gotten richer, certainly over the past 25 years.

Also, high wage countries like us have been competing with low wage countries like China very well for many many years. That's because inspite of our nominally more expensive labor, we actually have cheaper labor PER UNIT OF OUTPUT because of our cheap and abundant capital wich allows our workers to produce more. But to some extent the US will have to export some jobs because we simply cannot produce everything more efficeintly than any other country.

Wow, congratulations.  That may be the worst post in the history of GB.  Virtually every word of it is completely wrong.

[Soul Crusher]

The bottom line is that the Federal Reserve and the Govt have caused massive inflation in the cost of homes, living, etc while the disgusting govt has caused taxes to spiral out of control to pay for its insane level of spending. 

The middle class is getting squeezed by taxes and the cost of living inflation inspired by the Fed Reserve.  Blaming "corporations" is utterly ridiculous.   It is the govt, via insane EPA rules, local taxes and regs, crippliing lawsuit exposure for all sorts of nonsense, that have made manufacturing not profitable here. 

Why would any business make anything here when one small mistep results in lawsuits, govt intervention, etc? 

[Soul Crusher]

Not to be simplistic about it - but we went from this to this. 

We went from producers, workers, do'ers, to lazy wastes of space.  Our nation used to build things, manufacture things, innovate, produce, and work, now we have legions of loafers, parasites, welfare bums, and leeches.     

Compare that to this and you have all you need to know why as a nation we are screwed. 

[kcballer]

Wait are you blaming Obama for our move to a consumer based rather than manufacturing based economy?  Or is it just an example of what occurred in post 1960's America?

[Soul Crusher]

Wait are you blaming Obama for our move to a consumer based rather than manufacturing based economy?  Or is it just an example of what occurred in post 1960's America?

Its just a sign of the decline and the attitudes of huge portions of the population who are looking for welfare, handouts, and giveaways, as opposed to working, doing, producing, and contributing. 

JFK is rolling in his grave.

 

[HDPhysiques]

Correct on Kennedy rolling in his grave.  He was the last good prez we had, dem or rep.

Incorrect on not blaming the corporations.  Corporations are the very entities controlling the gov't that you seem to despise so much.  It's not just the Federal Reserve.  It's ALL of Wall Street (corporations), it's ALL of the military-industrial complex (corporations), and it's all of Health care and Big Oil/Green Energy (again, corporations). 

Is the gov't to blame?  Yes, they've accepted being bought out.  But let's not pretend that they are actually calling the shots that is ruining this country.  It's Fed and the International Corporate Elite that is using our gov't as puppets.

[Soul Crusher]

Correct on Kennedy rolling in his grave.  He was the last good prez we had, dem or rep.

Incorrect on not blaming the corporations.  Corporations are the very entities controlling the gov't that you seem to despise so much.  It's not just the Federal Reserve.  It's ALL of Wall Street (corporations), it's ALL of the military-industrial complex (corporations), and it's all of Health care and Big Oil/Green Energy (again, corporations). 

Is the gov't to blame?  Yes, they've accepted being bought out.  But let's not pretend that they are actually calling the shots that is ruining this country.  It's Fed and the International Corporate Elite that is using our gov't as puppets.

As Peter Schiff says - do you blame the drunk for drinking or the bartender who keeps serving the booze? 

Capital is now highly mobile and its no longer captive to the whims of where the company is located.  The govt has greatly enabled the off shoring of manfucturing via stupid treaties, trade agreements, onerous regs, etc. 

Companies by law are formed to give a return to shareholders, not to act as employment agencies.  It is what it is.  Either we find ways to be more competitive or we will go the way of the USSR or worse.     

[Soul Crusher]

Yeah, lets blame evil businesses for not wanting to be pinatas and whipping boys for the greedy pigs in govt. who rape the taxpayers blind    

________________________ ________________________ _______________


We Have Seen the Future (business fleeing California)
Barron's ^ | July 24, 2010 | THOMAS G. DONLAN


FOR DECADES, CALIFORNIANS TOOK pride in saying, "Wherever the country is going, California will get there first." Freeways, free love, state-supported higher education, space technology and computers created a utopia of runaway growth. Americans moved to California by the millions for new jobs and new lifestyles.

More recently, Californians have been disillusioned and dispossessed. High taxes were necessary to pay for the goodies dispensed by government; outraged citizens tried to keep the goodies and let the state borrow to pay for them. Borrowing, however, turned out to be a tax deferred, not denied.

The state government has taken the people's anger out on business. Running a business in California requires negotiating a thicket of regulation, fees, workers' compensation costs and lengthy processing of permits. As they used to say in other such jurisdictions, "Everything that is not compulsory is forbidden, and everything that is not forbidden is compulsory."

California boasts a pro-consumer, anti--producer, legal system The prize for business success in California is the privilege of paying high taxes—or the exercise of one remaining commercial freedom, the freedom to leave the state.

Joseph Vranich, a consultant in Irvine, keeps tabs on business emigration because he makes a good living helping companies depart. He calls himself a "business relocation coach," and business is booming. Using public information, he tallied 85 corporate departures, partial or complete, between Jan. 1 and July 20, 2010. That's twice as many as he counted in all of 2009, and nearly three times as many as in the three years before that. He keeps the tally on a blog, http://thebusinessrelocationcoach.blogspot.com/

Vranich reports: "Companies of all types are reducing their California footprint. The list includes well-known California-based firms like Google, Hilton, Genentech, Yelp, Apple, Facebook, and DirectTV.


(Excerpt) Read more at online.barrons.com ...

[Soul Crusher]

Ferguson: Why No Jobs? Tax Hikes Ahead
Monday, 26 Jul 2010 11:46
WWW.MONEYNEWS.COM     
By: Dan Weil

________________________ ____________________


Harvard economic historian Niall Ferguson has an explanation for why unemployment remains stubbornly high at 9.5 percent. It’s the threat of tax increases as the Bush tax cuts end this year.

“Why is it that small- and medium-sized businesses in the United States today are not hiring? Why is it that they're not expanding?” he said on CNN.

“It's because they see the tax hikes coming that are implied by this fiscal policy.”

The United States is running a budget deficit estimated by the White House at $1.47 trillion for this year. And the government debt burden totals around 10 percent of GDP.

The Bush tax cuts of 2001 and 2003 are set to expire Dec. 31. And some experts say the scheduled hikes will severely hurt small businessmen.

“The key issue here is can you get back to fiscal equilibrium in the same way that encourages business confidence, encourages the private sector?” Ferguson said.

“Or are you going to do it in a crazy way, like the Greeks currently are, by punishing business with higher taxation?”

Ferguson thinks the United States should refrain from slashing spending or raising taxes now, while the economic recovery is tenuous. But we need a workable plan for long-term fiscal stability, which the White House hasn’t provided, he said.

Centrist Democrats are coming around to Ferguson’s view.

Sens. Kent Conrad, Evan Bayh, and Ben Nelson have adopted the view that tax cuts shouldn’t be allowed to expire for the wealthy as the recovery falters.

© Moneynews. All rights reserved.

[MM2K]

Wow, congratulations.  That may be the worst post in the history of GB.  Virtually every word of it is completely wrong.

Worst post? Im honored. We have had some doozies here. Its shocking that David Ricardo and 200 years of international economic thought are completely wrong.

[tarzan]

333 - look at the Racial Dissolution and Gene Theft threads in this forum to get the BIG picture of why all this is happening.

Racial Dissolution:
http://www.getbig.com/boards/index.php?topic=343877.0

Gene Theft:
http://www.getbig.com/boards/index.php?topic=343880.0

[HDPhysiques]

Worst post? Im honored. We have had some doozies here. Its shocking that David Ricardo and 200 years of international economic thought are completely wrong.

People thought the world was flat for how many years?   Yes, sometimes just because someone thinks something for a long time, that doesn't make it so.

Still ROFL'ing at 333's trying to turn a blind eye to the fact that big business is running/ruining/bankrupting the country via our corrupt govt.  333 actually makes sense and has good points when he's not letting Obama pwn his mind.  But whenever something becomes partisan, he just jumps on the "bash libs" bandwagon and blames everything on the dems in office, instead of admitting that the real  problem is really big business controlling BOTH the dems & repubs.

[drkaje]

The top 1-1.5% has been paying 39% of all taxes for years it only makes sense they own stocks and stuff.

The middle class has been under assault a long time and this has nothing to do with Obama. It's about the perverse anger liberals have towards middle class Americans. Middle class Americans are the only thing standing between Libs and what they perceive as an endless supply of wealth controlled by the top earners.

[240 is Back]

333 actually makes sense and has good points when he's not letting Obama pwn his mind.  But whenever something becomes partisan, he just jumps on the "bash libs" bandwagon and blames everything on the dems in office, instead of admitting that the real  problem is really big business controlling BOTH the dems & repubs.

THIS

[Soul Crusher]

THIS

I'm sorry, I don't buy into the bash corporations nonsense.   Do you guys actually want to complain about companies like Deere, Fed Ex, CAT, UPS, Apple, etc?  Do you realize how many people they employ?  Do you realize how much money those companies contribute to state coffers for payroll taxes etc?  Do any of you clowns realize how many states and localities fund their budgets off the salaries and taxes paid to their employees? 

Tell me what those companies have to do with insane property taxes, ridiculous parking fees, surcharges, tax hikes etc?  What do those companies have to do with 200k  a year cops and fireman and public workers raping the system with outlandish pensions, etc? 

We are a capitalistic society, do you guys prefer that all these companies pick up and go to Singapore?  Then what happens?   

This is no longer 1950 or the glory years.  Guess what, the 1950's were an anomoly as it is.  Capital is far more mobile, we are now in competition with billions of more people, the internet has enabled telecommuting worldwide, and the value of the dollar due to Fed Reserve induced inflation via its money printing scam is so much less that two people now have to work.   

Unless and until we become come competitive globally to manufacture the goods we consume and cut the govt on all levels by at least 50% so that people can have their own money back to spend on items and services to local businesses, things will get far worse as the govt takes more and more and more. 

But keep trashing wealth, corporations, those that create and aspire to create wealth, thats a sure fire way to prosperity!      

 

[drkaje]

33,

You're sort of ignoring the fact that most liberals feel manufacturing jobs should be done outside the US where there's cheaper labor and less US soil environmental impact. Technology development for the educated and service industry for everyone else.

[Soul Crusher]

33,

You're sort of ignoring the fact that most liberals feel manufacturing jobs should be done outside the US where there's cheaper labor and less US soil environmental impact. Technology development for the educated and service industry for everyone else.

I'm sick of the bogus bash corporations nonsense.  Its utter rubbish.   If you want tot alk about companies like goldman Sachs, GE and companies who rely on govt monies and fundss for much of their profits and lobby for earmarks, fine, we should end all of that. 

I just dont understand what those who bash companies like Fed Ex, CAT, Deere, propose that will generate prosperity for the middle class. 

Lets' assume that the govt goes after all these companies to the point where they say - "FU we are leaving"  - What happens next? 

[sixsixinthemix]

actually they can easily compete because the capital buildup in usa makes them 100 times as productive

remember basic economics [non keynesian fo course because keynes was a politician]

the product of labor goes up as stored capital is accumulated, and tools, tek, systems, transport, communication, etc infrastrcutre is built

china can have billion janirots but wil have no cars or cyclotrons even if each janitor works 24 hours