The Vanishing American Middle Class

[jclalor 12]

How long can this trend continue?

http://nvonews.com/2011/10/23/us-wage-level-dropping-income-gap-growing/

[Gravitymaster 0]

It will continue as long as people keep thinking that all they have to do is go to school and they will be guaranteed a job. It will continue as long as corporate profits are down. It will continue as long as workers think getting up and going to work for someone else gives them some entitlement.

[DrewEckhardt 0]

Quote

How long can this trend continue?

http://nvonews.com/2011/10/23/us-wage-level-dropping-income-gap-growing/

Real income will drop among the working classes until wages and the cost of living they support match what they are in emerging markets.

The current situation is not sustainable where (as of 2009) Chinese autoworkers average $150/month versus $28/hour for UAW workers at GM and software engineers average $80K/year versus $10K/year in China and $7500/year in India.

The situation will resolve by work going to areas with lower total costs (insurance, taxes, shipping), wages increasing there as labor supply doesn't keep up with demand, and real wages dropping in high-cost areas to compete.

For example, with Chinese labor getting expensive Foxconn bought a factory in Juarez where the minimum wage is under $4.17/day.

Hopefully we'll meet at a point where doing some form of skilled labor gives you the option to buy a single family home, health care, education for your children, a car or two, and eventual retirement. That would be nicer than a world where we get cage apartments with eleven unrelated people, third world health care, and work until we die.

[jclalor 12]

Quote

It will continue as long as corporate profits are down.

What planet are you living on?


http://online.wsj.com/article/SB10001424052748704474804576222333619990742.html

[Gravitymaster 0]

Quote

Quote

It will continue as long as corporate profits are down.

What planet are you living on?


http://online.wsj.com/article/SB10001424052748704474804576222333619990742.html

Apparently on one that is reality based. You link dealt with financial profits. Here's the last sentence from your own link,

Quote

Nonfinancial companies saw profits drop $10 billion in the final three months of the year to an annual rate of $879 billion. That slip "could be the result of a weak pricing environment," said J.P. Morgan economist ...

I would suggest you read your own links before posting them.

[Gravitymaster 0]

See if you can digest this.

[Remster 30]

Overall corporate profits are up. Are you arguing that?

Remster

[jclalor 12]

Quote

Quote

Quote

*** It will continue as long as corporate profits are down.

What planet are you living on?


http://online.wsj.com/article/SB10001424052748704474804576222333619990742.html

Apparently on one that is reality based. You link dealt with financial profits. Here's the last sentence from your own link,

Quote

Nonfinancial companies saw profits drop $10 billion in the final three months of the year to an annual rate of $879 billion. That slip "could be the result of a weak pricing environment," said J.P. Morgan economist ...

I would suggest you read your own links before posting them.

For three months non financial profits fell, what a fucking pity. What have they done overall in the last 10 years ? What has happened to middle class income over the last 10 years?

Non financial profits;

http://research.stlouisfed.org/fred2/series/NFCPATAX

The middle class;

http://money.cnn.com/2011/09/21/news/economy/middle_class_income/index.htm

[Gravitymaster 0]

Go back and read your OP. It specifies that it's people making less than $26,364. per year. These are typically people who work in industries that have lower profits due to the recession.

[jclalor 12]

Quote

Quote

Go back and read your OP. It specifies that it's people making less than $26,364. per year. These are typically people who work in industries that have lower profits due to the recession.

I'm not talking about the few months of recession, I am talking about the last 20-30 years. what were corporate profits doing under W.? What were US wages doing at the same time? Can you show me data that shows the middle class's income growing until 2008?

$26,000 is the low end of the middle class. If you think the middle class is shrinking, that's fine, you are entitled to your own opinion, just not your own facts.

from the article;

Quote

Besides, since 1980, roughly 5% of annual national income of middle class shifted to the annual income of the upper class, as per the Census Bureau.

[Gravitymaster 0]

Those people would do well to heed my advice then.

What do you propose? Have the Government step in and make it all fairer?

Perhaps if the government had left well enough alone in the past, peoples attitudes towards being self-sufficient and taking care of themselves by starting businesses and/or getting a better education and improving their own lot in life would be different. Instead, we got the nanny state where they think life is all about working 40 hours a week and punching that time clock at 5pm then going out for a few beers, getting up the next day and doing it all again. That's what they have been taught to do and they follow their masters beck and call like good little worker bees.

Think for yourself. If you aren't happy with your life, change it. Where ever you are in life, whatever you are doing, whether you are happy of sad, it's your fault. Stop asking the government to do for you what you don't have the inclination or desire to do for yourself.

[StreetScooby 5]

Quote

Think for yourself. If you aren't happy with your life, change it. Where ever you are in life, whatever you are doing, whether you are happy of sad, it's your fault. Stop asking the government to do for you what you don't have the inclination or desire to do for yourself.

+1

We are all engines of karma

[jclalor 12]

Quote

Perhaps if the government had left well enough alone in the past, peoples attitudes towards being self-sufficient and taking care of themselves by starting businesses and/or getting a better education and improving their own lot in life would be different.

You are absolutely right. we need to get rid of all these pesky labor laws that's preventing a return to the good old days, when business did not have it's hands tied behind their back.


http://twentytwowords.com/2010/11/24/15-photographs-of-child-labor-in-america-from-the-early-1900s/

[StreetScooby 5]

Quote

You are absolutely right. we need to get rid of all these pesky labor laws that's preventing a return to the good old days, when business did not have it's hands tied behind their back.

I don't think anyone is saying that.

We are all engines of karma

[Gravitymaster 0]

Some people get it, some don't. Now I know how you feel about arguing with the Christians.

[DrewEckhardt 0]

Quote

Quote

Think for yourself. If you aren't happy with your life, change it. Where ever you are in life, whatever you are doing, whether you are happy of sad, it's your fault. Stop asking the government to do for you what you don't have the inclination or desire to do for yourself.

+1

That's not entirely true.

The federal government has acted on behalf of corporatist interests resulting in price increasing far faster than inflation in key industry products. Housing in high cost areas with jobs is still over-priced by 40% in real dollars. From 1985-2005 medical costs were up 251% in real dollars. Education cost increases have quadrupled inflation totaling 439% of where they were in the same period. The companies (and their lobbyists) and government have rigged the game against the working classes (any one who doesn't make the majority of their income from investments which includes the bottom 90% and most of the top decile in this country).

Emerging markets (formerly called "developing countries" or "the third world") are producing increasing amounts of accessible labor that costs a fraction of what it does here. Whether you're a lawyer, auto-worker, or engineer it's hard to compete with people working for 1/10th of what you need to sustain a somewhat comparable middle-class lifestyle in the United States especially when those guys outnumber you up to 10:1. This is natural but if you're suffering under the current system you're unlikely to attain the resources to work around it.

[jclalor 12]

Quote

Now I know how you feel about arguing with the Christians.

In all honesty, that was a funny line.

[StreetScooby 5]

Quote

The federal government has acted on behalf of corporatist interests resulting in price increasing far faster than inflation in key industry products.

+1

(I'm too tired to say anything else right now ;-)

We are all engines of karma

[jgoose71 0]

It will continue until we are able to start manufacturing goods in America again. Plain and simple. With all of manufacturing and production being outsourced, the middle class jobs are going with them.

Until the tax code is fixed and they are brought back, this trend will continue. As long as we keep taxing the holey living hell out of corporations that stay here in the U.S., the trend will continue. It's not worth it to hang around.

Now all we have is wall street/CEO and minimum wage jobs. Nothing in between.

"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

[grimmie 186]

As long as we keep taxing the holey living hell out of corporations that stay here in the U.S., the trend will continue. It's not worth it to hang around.

What?

[jgoose71 0]

Quote

As long as we keep taxing the holey living hell out of corporations that stay here in the U.S., the trend will continue. It's not worth it to hang around.

What?

To hang around the U.S. GE's "Green jobs" are a perfect example of why the middle class is disappearing.

Jeffy Imelt (or any other CEO) hangs out here in the U.S. He has Solar Panels built in China. If these factories were here in the U.S. they would be supplying our middle class jobs, but they are not. After they are shipped here to the U.S. a contractor (another "company owner" of sorts) goes down to Lowe's or Home Depot to round up a bunch of illegals and pays them $2 an hour to install them, there buy driving down everyone else's wage.

The rich get richer, the poor get poorer, and the CEO's buy the politicians that pass shit like NAFTA and refuse to secure the borders to control these factors.

Meanwhile, with the tax rate being what it is, they can escape most of it by shipping manufacturing over seas (once again, thanks to NAFTA and low tariffs).

People want to tax the rich more, but they don't understand that to offset the costs, they will just outsource more further killing the economy.

If you want to bring back the middle class, you got to bring back manufacturing. You have to make it economically feasible. End rant.

"There is an art, it says, or, rather, a knack to flying. The knack lies in learning how to throw yourself at the ground and miss."
Life, the Universe, and Everything

[jclalor 12]

Quote

***Until the tax code is fixed and they are brought back, this trend will continue. As long as we keep taxing the holey living hell out of corporations that stay here in the U.S., the trend will continue. It's not worth it to hang around.

You do realize that the corporate, personal, and capital gains tax rate is the lowest it's been in 60 years? you do know that right?

http://www.ritholtz.com/blog/2011/04/us-tax-rates-1916-2010/

[Gravitymaster 0]

Taxes on business should be eliminated entirely. The government simply uses the tax on business as a way to hide the true tax rate consumers are paying. Do you actually think businesses don't just raise their prices?

[DrewEckhardt 0]

Quote

As long as we keep taxing the holey living hell out of corporations that stay here in the U.S., the trend will continue. It's not worth it to hang around.

What?

Fixing the taxes would just be a foot note. Labor costs dominate and you won't fix anything until you fix those.

As of 2009, it cost $150/month to hire a Chinese autoworker versus $28/hour to hire a UAW worker (before overtime). It cost $10K/year to hire a software engineer in China and $7500 in India versus $ 80K/year in America.

Getting rid of corporate taxes which allow corporations in tax-free countries to do business at 26% less cost won't help when our labor is over 4300% more expensive (assuming the Chinese only need to work 20 hours of overtime a week).

Being competitive requires total costs (productivity divided into the sum of wages + transportation + taxes) for a given output to line up.

That can happen because our wages drop to match theirs (in real dollars) or theirs increase to match ours.

It can happen when our costs of sustaining an "American middle class lifestyle" drop to match theirs or because American workers start living in corporate dormitories or cage apartments.

[jclalor 12]

Quote

Quote

Quote

As long as we keep taxing the holey living hell out of corporations that stay here in the U.S., the trend will continue. It's not worth it to hang around.

What?

Fixing the taxes would just be a foot note. Labor costs dominate and you won't fix anything until you fix those.

As of 2009, it cost $150/month to hire a Chinese autoworker versus $28/hour to hire a UAW worker (before overtime). It cost $10K/year to hire a software engineer in China and $7500 in India versus $ 80K/year in America.

Getting rid of corporate taxes which allow corporations in tax-free countries to do business at 26% less cost won't help when our labor is over 4300% more expensive (assuming the Chinese only need to work 20 hours of overtime a week).

Being competitive requires total costs (productivity divided into the sum of wages + transportation + taxes) for a given output to line up.

That can happen because our wages drop to match theirs (in real dollars) or theirs increase to match ours.

It can happen when our costs of sustaining an "American middle class lifestyle" drop to match theirs or because American workers start living in corporate dormitories or cage apartments.

I agree with what your saying, the problem is we will never work for a tenth of what they pay the Chinese and Indian labor force.

It also doesn't help when the the Chinese under value their currency.

At the rate things are going, i'll end up having to change my name to appu, learn to speak Hindi, and work in a call center servicing Indian consumers.