On October 21, 2015, Michael Snyder writes on D.C. Clothesline:
We just got more evidence that the middle class in America is dying. According to brand new numbers that were just released by the Social Security Administration, 51 percent of all workers in the United States make less than $30,000 a year. Let that number sink infor a moment. You can’t support a middle class family in America today on just $2,500 a month – especially after taxes are taken out. And yet more than half of all workers in this country make less than that each month. In order to have a thriving middle class, you have got to have an economy that produces lots of middle class jobs, and that simply is not happening in America today.
You can find the report that the Social Security Administration just released right here. The following are some of the numbers that really stood out for me…
-38 percent of all American workers made less than $20,000 last year.
-51 percent of all American workers made less than $30,000 last year.
-62 percent of all American workers made less than $40,000 last year.
-71 percent of all American workers made less than $50,000 last year.
That first number is truly staggering. The federal poverty level for a family of five is $28,410, and yet almost 40 percent of all American workers do not even bring in $20,000 a year.
If you worked a full-time job at $10 an hour all year long with two weeks off, you would make approximately $20,000. This should tell you something about the quality of the jobs that our economy is producing at this point.
And of course the numbers above are only for those that are actually working. As I discussed just recently, there are 7.9 million working age Americans that are “officially unemployed” right now and another 94.7 million working age Americans that are considered to be “not in the labor force”. When you add those two numbers together, you get a grand total of 102.6 million working age Americans that do not have a job right now.
So many people that I know are barely scraping by right now. Many families have to fight tooth and nail just to make it from month to month, and there are lots of Americans that find themselves sinking deeper and deeper into debt.
If you can believe it, about a quarter of the country actually has a negative net worth right now.
What that means is that if you have no debt and you also have ten dollars in your pocket that gives you a greater net worth than about 25 percent of the entire country. The following comes from a recent piece by Simon Black…
“Credit Suisse estimates that 25% of Americans are in this situation of having a negative net-worth.
“If you’ve no debts and have $10 in your pocket you have more wealth than 25% of Americans. More than 25% of Americans have collectively that is.”
“The thing is– not only did the government create the incentives, but they set the standard.
“With a net worth of negative $60 trillion, US citizens are just following dutifully in the government’s footsteps.”
As a nation we are flat broke and most of us are living paycheck to paycheck. It has been estimated that it takes approximately $50,000 a year to support a middle class lifestyle for a family of four in the U.S. today, and so the fact that 71 percent of all workers make less than that amount shows how difficult it is for families that try to get by with just a single breadwinner.
Needless to say, a tremendous squeeze has been put on the middle class. In many families, both the husband and the wife are working as hard as they can, but it is still not enough. With each passing day, more Americans are losing their spots in the middle class and this has pushed government dependence to an all-time high. According to the U.S. Census Bureau, 49 percent of all Americans now live in a home that receives money from the government each month.
Sadly, the trends that are destroying the middle class in America just continue to accelerate.
With a huge assist from the Republican leadership in Congress, Barack Obama recently completed negotiations on the Trans-Pacific Partnership. Also known as Obamatrade, this insidious new treaty is going to cover nations that collectively account for 40 percent of global GDP. Just like NAFTA, this treaty will result in the loss of thousands of businesses and millions of good paying American jobs. Let us hope and pray that Congress somehow votes it down.
Another thing that is working against the middle class is the fact that technology is increasingly taking over our jobs. With each passing year, it becomes cheaper and more efficient to have computers, robots and machines do things that humans once did.
Eventually, there will be very few things that humans will be able to do more cheaply and more efficiently than computers, robots and machines. How will most of us make a living when that happens?…
The robopocalypse for workers may be inevitable. In this vision of the future, super-smart machines will best humans in pretty much every task. A few of us will own the machines, a few will work a bit… while the rest will live off a government-provided income…the most common job in most U.S. states probably will no longer be truck driver.
For decades, we have been training our young people to have the goal of “getting a job” once they get out into the real world. But in America today there are not nearly enough good jobs to go around, and this crisis is only going to accelerate as we move into the future.
I do not believe that it is wise to pin your future on a corporation that could replace you with a foreign worker or a machine the moment that it becomes expedient to do so. We need to start thinking differently, because the paradigms that worked in the past are fundamentally breaking down.
So what advice would you give to a young adult today that is looking toward the future?
Gary Reber Comments:
The problem with this article is that it is written from the narrow perspective that “a job is the ONLY way to earn an income.” Of course, this is what Americans have been taught to believe, while the real path to earning a significant income is through OWNING wealth-creating, income-producing capital assets––the non-human assets that are the product of exponential technological invention and innovation such as productive land, structures, tools, machines, super-automation, robotics, computerization, etc. Yet, no one EVER addresses this means to earning an income, even though the majority of politicians, national media spokespersons, CEO and the wealthy owe their wealth to OWNING productive capital assets.
Job opportunities for the vast majority of Americans are drying up, especially those that pay a decent wage to support a middle class lifestyle. This is due to tectonic shifts in the technologies of production in which the non-human factor is replacing humans in production and thus destroying jobs, and globalization in which production is being outsourced to low wage and non-regulated foreign countries as more and more American corporations, driven by competition and an American consumer who seeks the lowest cost for products and services.
While our government continues to pursue “free trade” agreements with such low wage and non-regulated countries, the consequence of such efforts is to further undermine opportunities for Americans to secure good-paying jobs. At the same time, it is the already wealthy ownership class that benefits from the elimination of tariffs as the corporations they OWN further invest in productive capital asset formation in foreign countries to gain advantages in labor cost reduction and the lack of operational environmental regulation.
What our government should be doing is imposing robust import levies and tariffs (tax) on particular classes of imports that are determined to be manufactured outside the United States and exported back to the United States that do not qualify as “Fair Trade” and unfairly undercut an American-make equivalent. At present, American business corporations are increasingly abandoning the United States and its communities to invest in productive capital formation outside the United States, particularly in China, Mexico, India, and other parts of Asia, supported by American consumers who cannot afford pricier American-made products. As a result, America is experiencing the deindustrialization of America. This has forced policy makers to adopt a redistributive socialist solution rather than a democratic capitalist one whereby democratic economic growth of the earning power of the citizens would flourish simultaneously with new, broadly-owned productive capital formation investments in the United States. Such overseas operations have the advantage of “sweat-shop” slave labor rates relative to American standards, low or no taxation, supportive infrastructure provisions, currency manipulation, and few if any environmental regulations––which translate to lower-cost production. Thus, producing the same product or service in the United States would be far more expensive. For most people, economic globalization means a growing gap between rich and poor, technological alienation of the labor worker from the means of production, and the phenomenon of global corporations and strategic alliances forcing labor workers in high-cost wage markets, such as the United States, to compete with labor-saving capital tools and lower-paid foreign workers. Unemployment is high and there is an accelerating displacement of labor workers by technology and cheaper foreign labor, resulting in greater economic uncertainty and unstable retirement incomes for the average American citizen––causing the average citizen to become increasingly dependent on government wealth redistribution programs.
In addition to tariffs the necessity is to adopt economic policies that will stimulate the America economy to grow while simultaneously creating new capital asset OWNERS.
The government should acknowledge its obligation to make productive capital ownership economically purchasable by capital-less Americans (the 99 percent) using insured, interest-free capital credit, and, as binary economist Louis Kelso stated, “substantially assume financial responsibility for the economy through establishing and supervising the implementation of an economic, labor and business policy of democratized economic power.” Historically, capital has been the primary engine of industrialization. But as used, as Kelso has argued, has, as well, “been the chief cause of the institutional deformities that have created and maintained two incompatible classes: the overcapitalized and the undercapitalized.”
We need to arrive at a new market economy structure in which on one level the employees of a corporation could walk into management and demand, in collective bargaining, the use of a justice-based managed full-voting, full-dividend-earnings-payout ESOP (Employee Stock Ownership Plan)—not just to trade a single block of stock for wage concessions, but to redesign the future of the company and its employees. We need, as a society, the assurance that as a corporate employer grows, it builds ownership into its employees. All of them as individuals, not just the upper management, and not collectively! When people are in a position to earn the income produced by their physical capital as well as the wages of their labor, their company is in a position to be more competitive through lower labor costs and increased technological invention and innovation, while achieving higher employee incomes through the employee-owned productive capital.
Once this goal becomes the national political focus we will see an unbelievable discussion of workable plans to realize the goal. Remember that planning begins with a vision and a goal. This is not rocket science but it does require national leadership. Implementation requires amending a few laws that basically authorize the transactions that will broaden capital ownership paid for with the future earnings of capital investment. Allowing such transactions will provide incentives for profitable opportunities to employ unused capacity and promote stable and robust economic growth.
Still, after a half-century, we have no leaders with a growth strategy that could restore the economic productiveness of the American economy. The growth strategy I have presented is not new, but it has not yet registered in the minds of leaderless politicians and their advisors from the left to the right of the political spectrum and a population of people who have been mis-educated and mis-led by conventional economists from all the conventional schools of economics.
