The Middle Class in America Is Radically Shrinking.

[one...two...tree 2,762]

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.

[elmcitymaven 9,712]

Steven, what do you propose the middle class do about this then? I say this as someone who shares your concerns.

[evli1966 88]

Steven, what do you propose the middle class do about this then? I say this as someone who shares your concerns.

Redistribute the wealth until there is none left to redistribute.

When everyone has an equal amount then in a years time you will have a poor class,middle class and a rich class once again.

Then in 10 years lets just redistribute again and let the cycle repeat.

I agree the middle class is shrinking as I am one of them but it isnt the rich taking my money it is the government.

[one...two...tree 2,762]

Steven, what do you propose the middle class do about this then? I say this as someone who shares your concerns.

I thought it was interesting that the author listed all those statistics, but then goes on to say:

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.

Which is bizarre to me, to go from no-nonsense facts to making an ambiguous comment about government rules and regulations. That part of the article, I don't agree with at all. I'm not sure I know what the best solutions are , but I think that collective bargaining is one of the most effective ways employees can see their wages increase.

Edited July 25, 2010 by El Buscador

[evli1966 88]

I thought it was interesting that the author listed all those statistics, but then goes on to say:

Which is bizarre to me, to go from no-nonsense facts to making an ambiguous comment about government rules and regulations. That part of the article, I don't agree with at all. I'm not sure I know what the best solutions are , but I think that collective bargaining is one of the most effective ways employees can see their wages increase.

Actually I agree with the poster that the rules and limtiations are passed that chase away industry and it is the fault of all sides of the political spectrum.

Democrats/liberals tend to be worker friendlier and pass legislation which take money out of the pockets of the large companies.

Republicans tend to be friendlier to large corporations with tax cuts etc. but are not neccesarily unfriendly towards the workers directly. With that said the legislation that they tend to pass allow these companies to pick up shop and move to cheap labor marketswith ease; this type of legislation does hurt the worker indirectly.

Of course that is my opinion.

[I AM NOT THAT GUY 5,715]

I thought it was interesting that the author listed all those statistics, but then goes on to say:

Which is bizarre to me, to go from no-nonsense facts to making an ambiguous comment about government rules and regulations. That part of the article, I don't agree with at all. I'm not sure I know what the best solutions are , but I think that collective bargaining is one of the most effective ways employees can see their wages increase.

Unions are destroying the country, not making it better.

[Sofiyya 1,687]

Unions are destroying the country, not making it better.

Duh! Keep supporting unionization, Steven. You are so clueless.

[Peikko 1,575]

I thought it was interesting that the author listed all those statistics, but then goes on to say:

Which is bizarre to me, to go from no-nonsense facts to making an ambiguous comment about government rules and regulations. That part of the article, I don't agree with at all. I'm not sure I know what the best solutions are , but I think that collective bargaining is one of the most effective ways employees can see their wages increase.

What is so hard to understand? He postulates that Americans did not fully understand that a global market would strain the American way of life. If there are workers in other parts of the world who live in such poverty that anything is better than nothing in terms of work, that working in appalling and hazardous conditions is endurable then something has to change to enable American companies to compete using the more expensive American workers. That something could be increased efficiencies in the production process (which normally means a vastly reduced workforce) or it could be changing the outlook of consumers from cheap and disposables to expansive durables. (Yes, I am being simplistic and there are other options) The spanner in the works is the loss of cheap and plentiful energy supplies - without that the industrial world is a bit snookered.

Edited July 25, 2010 by Madame Cleo

[Dan J 277]

Redistribute the wealth until there is none left to redistribute.

When everyone has an equal amount then in a years time you will have a poor class,middle class and a rich class once again.

Then in 10 years lets just redistribute again and let the cycle repeat.

I agree the middle class is shrinking as I am one of them but it isnt the rich taking my money it is the government.

Since the 1950's when the middle class was the strongest, tax rates have fallen across all brackets. You pay less in taxes relative your income today than you would have in the 1950's

[Dan J 277]

Unions are destroying the country, not making it better.

Unions had a huge part to play in creating a strong middle class. Prior to unionisation in this country, poverty rates were well above 40%. Workers were forced to work much as they do in China today. Long hours, little pay and often unsafe working environments. With unions falling out of favor, we are slowly moving back to that.

[evli1966 88]

Since the 1950's when the middle class was the strongest, tax rates have fallen across all brackets. You pay less in taxes relative your income today than you would have in the 1950's

Again my money isn't being taken by the rich the government is taking it. Do the rich have more and possibly better avenues to protect their money from the grovernment; I would agee. With htat said it is not the rich taking my money but the government with all the unneccessary BS funding they are doing.

Unions had a huge part to play in creating a strong middle class. Prior to unionisation in this country, poverty rates were well above 40%. Workers were forced to work much as they do in China today. Long hours, little pay and often unsafe working environments. With unions falling out of favor, we are slowly moving back to that.

And then moved in the corrupt leaders who in their blind greed for money and power sucked the life out of the companies and slowly consumed the free will of the people.

The unions shot themelves with the greed for more than should have been expected.

In the midwest I have seen unions shut down factory after factory or be denied by the employees becasue if unionised they employees would have to take a pay cut to on the same level as the other union members, also a cut in cash due to union fees.

I understand the companies did not want them no matter what becasue the temporary pay cuts would in fact ballon uncontrollably in the future.

The Unions had a purpose and exceeded it and people (workers)grew with a thought that they deserved what the person who started the company with his own money and ideas and took the risk to start the company is earning. The initial union motive was good but the post thought process became flawed.

[I AM NOT THAT GUY 5,715]

Unions had a huge part to play in creating a strong middle class. Prior to unionisation in this country, poverty rates were well above 40%. Workers were forced to work much as they do in China today. Long hours, little pay and often unsafe working environments. With unions falling out of favor, we are slowly moving back to that.

Unions were formed to keep out cheap (black and immigrant) labor. "Buy the union label," used to mean it was made by native born white factory workers.

Edited July 25, 2010 by ##########

[spookyturtle 9,466]

In every other first world country............

A prize for anyone who guesses which VJ'er would begin a reply with these words.

[Usui Takumi 1,562]

Booyah!

What do I get?

[spookyturtle 9,466]

Booyah!

What do I get?

Ding ding!! We have a winner!! You win a free trip to Australia with BY as your tour guide.