Do you think this is true, what are the reasons and is this good or bad?
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.
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.
Source: http://finance.yahoo.com/tech-ticker/the-u.s.-middle-class-is-being-wiped-out-here%27s-the-stats-to-prove-it-520657.html?tickers=^DJI,^GSPC,SPY,MCD,WMT,XRT,DIA
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.
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.
The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
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.
• 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.
• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
What do most Americans have to offer in the marketplace other than their labor? Not much.
In the whole, I think it's largely true. Individual points can be argued, of course.
The middle class of today pales in comparison to the middle class of the 1950s. (Relatively speaking and subtracting technology gains) And it's only going to get worse.
The United States is living way above its means and in the coming decade that standard of living will invariably be forced to shrink to sustainable levels. That shrinkage will most likely come via inflation. And when inflation hits, guess which class is going to suffer the most? The poor will still be poor and getting the gov't handouts. The rich will suffer but won't feel it in real terms. The middle class though is going to get hit hard in real terms.
I don't see the situation abating until after the dollar collapses, and America labor again becomes somewhat competitve on a global basis. Of course, the standard of living when (if) that happens will be starting from a much lower point.
You see, it's been very easy for successive governments over the past 40 years to promise the people prosperity... when the money has come from the cumulative income of the next three generations.
Hard Rain: You see, it's been very easy for successive governments over the past 40 years to promise the people prosperity... when the money has come from the cumulative income of the next three generations.
Could you please elaborate on how this is done?
The next three generations are not yet born. Thus, they have no money. Somebody living owns whatever wealth there is. So how did the govt give us the wealth of the next 3 generations?
I truly have no clue what you mean.
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It's easy to refute an argument if you first misrepresent it. William Keizer
Could you please elaborate on how this is done? The next three generations are not yet born. Thus, they have no money. Somebody living owns whatever wealth there is. So how did the govt give us the wealth of the next 3 generations?
Yes, all wealth is currently owned by living people, but the liability/asset portion of that wealth is the key to the unborn (next 3 generations.)
Think about it this way: Let's say you borrow $1 million dollars today from a neighbor (who just coincidentally is an Asian.) You get a 100 year repayment plan since there is no way for you to pay it back in your lifetime. (And for hypothetical sake, the law forces a person's unpaid debt to pass along to their children and then children's children like a government.) Anyways, you consume the million today and live large then start the slow process of repayment.
See the wealth is always owned by the living, but you decided to consume today and force your children (next generations) to eventually underconsume and pay it back. While the Asian family decided to delay consumption of its wealth today and instead allow their children to enjoy better lives later.
(Of course, the Asian family didn't fully take into account your sneaky grandson Benny, who already is scheming a way out of debt.)
Could you please elaborate on how this is done? The next three generations are not yet born. Thus, they have no money. Somebody living owns whatever wealth there is. So how did the govt give us the wealth of the next 3 generations? I truly have no clue what you mean.
It's called debt. When the government does it en-masse it becomes trans-generational.
Well of course! The standard of living is going up too! If you want to live like people did in 1975, you could do it on minimum wage. Despite what the media says; "the war on the middle class", is bunk.
What is middle class n e way? I agree when Mises stated that the standard of living is constantly increasing in a capitalist system. To say there is a "poor" in America is rediculuos. Most so called poor people I know have video game systems, air conditionaires, internet access, cell phones etc. Solomon in all his glory didn't have cool stuff such as this. I also agree with sieben that there really isn't enough info from this article to make any conclusions.
I would say the system is heading over a cliff due to the inflationary policies from the fed and the overt regulations by the government, but over all, the standard of living is still on the rise over all.
Michael - "What is middle class n e way?"
The middle class is not a very accurate description but it think it is intended to describe those from whom wealth is transferred in the transfer of wealth and power from society to government - the substitution fo coercion for cooperation.
Is not the description 'middle class' a collectivist substitute for the word 'society'?
Perhaps the question ought more properly be asked: Is society shrinking? That depends upon one's description and criteria for ranking the 'size' of society. I think that is how 'middle class' is intended to be used but it's hard to decide because that decision requires a value judgement.
Society in the collectivist sense is a noun - an amorphous group of individuals assigned subjective and arbitrary traits. This makes the collectivist illusion of 'middle class' possible.
The word society is more correctly understood as an action word, a verb or adverb - cooperation among individuals.
When there is ccoperation among individuals 'classes' are not quantitative but rather qualitative - a manifestation of the degree to which one successfully cooperates with others. Classes are not rankings or status separating individuals within society (noun); classes are more correctly understood as an adverb describing the means through which individuals modify the word depicting action - the verb 'society'.
In other (society) words - 'employers' are not a class of individuals like in the sense of a noun, rather a modification of the action 'employ'. 'Employers' is the transitive of theverb 'employ', modifying action by cooperatively coordinating the action: employment.
Such an understanding acknowledges that in describing action, ends are irrelevant and unnecessary. Assigning or presuming ends in the description of action is an ethical judgement which may or may not be true. Making judgements about 'employers', using the word as a collective noun - the collectivist sense, could mean any number of things depending on the value one places on employment. So the use of the word 'employers' in the collectivist sense is no longer simply an accurate description of action, it becomes a value judgement. This leads to misunderstanding and confusion.
Use and abuse of the terms 'middle class' causes misunderstanding and confusion because coercion is conflated as society. A healthy or growing middle class could possibly exhibit division among individuals rather than cooperation - that somehow those to whom a classification is assigned 'middle' are gaining health or growth at the expense of others who have a different classification. This neglects that society is cooperation; mutual benefit. It presumes that coersion is the norm; a judgment which is irrelevant and unnecessary to the description of action.
How does this apply to the OP? "American" and "middle class" confuse society (cooperation) with government (coercion) by presuming value judgements about the use of those terms.
Understanding the extent to which cooperation benefits all individuals and coercion only benefits some individuals would be more correct knowledge than judgement calls about arbitrary classifications like 'America' or 'middle class'.
"Oh, I wish I could pray the way this dog looks at the meat" - Martin Luther
"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."
The Americans also cannot compete with robots that do work for free. Abolish all robots!!!
And most of the commentary in original post is a zero-sum fallacy. And the inequality increases are largely driven by statism/intervention into marketplace.
I only recently found out the answer to this one.
Let me see if I have it right:
First of all, in the 80's, the USA made the best stuff, sold it the cheapest, and everyone was buying it all over the world, AT THE SAME TIME THE USA WAS PAYING THE WORLD'S HIGHEST WAGES!
How do we explain that?
Let the maestro do the talking. Here's Rothbard on the subject.
His answer begins "What the protectionists don t bother to explain is why U.S. wage rates are so much higher than Taiwan. They are not imposed by Providence. Wage rates are high in the U.S. because...." Well, take it from there.
[Also, how do we explain that China buys more cars than anywhere else, and people pay for them in cash? At a dollar an hour, that's no simple thing.]
Hard Rain:"It's called debt. When the government does it en-masse it becomes trans-generational."
Just a thought: Couldn't that debt be eradicated by government fiat and the production capacity would be there?