12 Signs You Might Not Be Middle Class

SIGNS YOU ARE NOT (OR NEVER WERE) MIDDLE CLASS

A Bear Market Economics Feature Article

A Bear Market Economics Feature Article

 

Unfortunately, fewer people now consider themselves middle class, studies show. Only 44 percent of Americans described themselves as middle class last year, down from 53 percent in 2008. And that's not because a chunk of the country is suddenly more wealthy. More people were describing themselves as lower-middle class or poor.

If most of the following signs occur for you, you are probably not middle class

1. You “Earn” Less Than $40,000 a year

Median household income was $54,510 in February, according to the latest estimates from Sentier Research. That's up from just above the $51,000 mark in 2012.

Pew Research defines a middle-class household income as two-thirds to double the national median, or between about $36,000 and $109,000 a year.

Of course, a middle-class income can vary depending on where you live. In San Jose, California, it ranges between $51,000 and $182,000 a year, according to a recent analysis by NPR. But in Milwaukee, Wisconsin, the range drops to between $18,000 and $67,000 a year.

2. You Do Not Have a Secure Job or Career

Americans may be changing their views on what it means to be middle class. In 1991, some 70 percent of people said that homeownership was essential to being in the middle class, according to Pew Research. Only a third said that having a "white-collar job" was key.

Fast-forward to 2012, when nearly nine out of 10 Americans said a secure job is essential to being in the middle class. Only 45 percent said owning a home was important.

3. You Do Not Have a College Education

To be sure, many households are able to reach middle-class income levels without a college education. But generally, when Americans think of middle-class families, surveys show they think of parents who went to college and are saving for a college education for their children.

Americans used to think that a college education was more essential for the middle-class label. In 1991, nearly half of those surveyed said a college education was important to the middle class. That number dropped to 37 percent in 2012, according to Pew.

4. You Do Not Own a Home or Probably Never Will (or You Will Never Pay Off Your Mortgage)

Homeownership has long been a hallmark of the middle class. In a 2013 speech, President Obama called it "the most tangible cornerstone that lies at the heart of the American Dream, at the heart of middle-class life."

But owning a home became much harder after the financial crisis walloped the housing market. The homeownership rate fell to 64 percent in 2014, according to the U.S. Census Bureau, down from 69 percent a decade earlier.

"Perhaps the main new reality is that homeownership isn't as easy to attain as it has been during most of the decades after World War II," trade publication Commercial Property Executive reports. "For a lot of people, the money isn't there, because the American economy simply doesn't offer as many well-paying jobs as it used to."

5. You Do Not Take Vacations

A vacation is an extra expense that many middle-earners cannot afford without sacrificing something else. A Statista survey found that this year 54% of people gave up purchasing big ticket items like TVs or electronics so they can go on a vacation. Others made sacrifices like reducing or eliminating their trips to the movies (47%), reducing or eliminating trips out to restaurants (43%), or avoiding purchasing small ticket items like new clothing (43%).

The family vacation "is a middle-class staple," writes James McWhinney at Investopedia. "Vacations demonstrate that a family has disposable income and has been successful enough to take time away from work to focus on leisure."

You'll need plenty of disposable income for some family vacations. The average American family spent nearly $4,600 on a summer vacation in 2013, according to American Express. As the economy has improved, consumers have begun planning more vacations and spending more on them as well.

6. You Do Not Own or Purchase A New Vehicle

Very few people who earn the median income can afford to buy a new car or truck. Interest.com recently analyzed the prices of new cars and trucks, as well as the median incomes across more than two dozen major cities, and found that new cars and trucks were simply not affordable to most middle-earners.

"Median-income families in only one major city [Washington DC] can afford the average price Americans are paying for new cars and trucks nowadays." As of 2013, new cars are priced at $32,086, according to the study. Mike Sante, Interest.com's managing editor reminds us, "just because you can manage the monthly payment doesn't mean you should let a $30,000 or $40,000 ride gobble up all such a huge share of your paycheck."

7. Your Debt Exceeds Your Net Worth

"More than 160 million Americans have credit cards.""The average credit card holder has at least three cards.""On average, each household with a credit card carries more than $15,000 in credit card debt."

Not only do we have large amounts of credit card debt, we also have student loans, mortgages, cars, and medical debts. Our debt is growing faster than our income, and many middle class workers have trouble staying afloat. Money-Zine evaluated debt growth and income growth over the past few decades and found that "back in 1980, the consumer credit per person was $1,540, which was 7.3% of the average household income of $21,100. In 2013, consumer debt was $9,800 per person, which was 13.4% of the average household income of $72,600. This means debt increased 70% faster than income from 1980 through 2013."

These debt statistics come from Debt.org.

8. You Have No Significant Emergency Savings

To provide ourselves with a degree of financial security, we are supposed to have emergency savings to protect ourselves in the event of job loss, illness, or some other catastrophe. Most members of the middle class don't have at least six months of emergency savings, however, and some working people have no such savings.

A Bankrate survey found that only around one out of four households have six months of emergency money saved, and many of them are in the higher income groups. Another one-fourth have no emergency savings at all, and the remaining household have a small to moderate amount of savings, but not enough to cover six months of expenses.

9. You Have No Significant Retirement Savings


Investing for the golden years is important to America's middle class, but that doesn't mean they do a very good job of it.

It has become more difficult for most Americans, including the middle class, to set enough money aside for the retirement years. Researchers with the Employee Benefit Research Institute ran some scenarios last year that looked at what would happen for Americans who spent a maximum 35 years in retirement.

Would people in the second- and third-income quartile -- the middle income quartiles -- run out of money? In the second-income quartile, 47 percent would fall short. In the third-income quartile, 28 percent would run out.

If you reach the retirement age with little or no money saved, Social Security is probably not going to be enough to cover your basic needs. Even if you want to work for your entire life, you have no way of knowing whether or not you will be physically capable of doing so.

Although having a lack of a retirement savings is a risky move, so many people bet on double zero, just hoping that things will work out in their favor. While some members of the middle class neglect this aspect of financial planning because they are procrastinating, there are also some workers who cannot afford to set this money aside. Nearly half of those who don't save for retirement say it's because they simply don't have the money.

As of late, around 20% of people near 65 have not saved anything for retirement at all, and the majority of people — 59% — worry that they don't have enough money saved for retirement, according to a Gallup Poll.

10. You Cannot Meet A Medical Emergency Requiring Out of Pocket Cost Over $400

Medical care is a basic necessity and something we'd think would be affordable for someone earning a middle income. A Forbes article published data indicating that workers in large companies — many of whom are members of the middle class — "face nearly $5,000 in premiums, co-payments, deductibles and other forms of co-insurance."

During the past few years, these costs have had a large impact on working Americans. A report by Feeding America found that a shocking 66% of households say they've had to choose between paying for food and paying for medical care — 31% say they have to make that choice each and every month.

This was another hot topic in Pew's survey of middle-class characteristics. Two-thirds of adults said health insurance was necessary to be considered middle class.

Many Americans get health insurance through their work, so it goes hand-in-hand with a secure job that comes with the middle-class lifestyle.

The Affordable Care Act is making health coverage available to more lower-income Americans who previously couldn't afford it. As health insurance becomes more pervasive, it may become less of a signifier of middle-class culture.
       

11. You Need But Cannot Afford Dental Work

According to the U.S. Department of Health and Human Services, "the U.S. spends about $64 billion each year on oral health care — just 4% is paid by Government programs." About 108 million people in the U.S. have no dental coverage and even those who are covered may have trouble getting the care they need, the department reports.

Oftentimes, people will purchase medical coverage and forgo dental because it's so expensive. Plus, dental insurance may cover only 50% of the more expensive procedures, like crowns and bridges. This leaves those who have insurance with large co-payments.

In many cases, middle-earners will delay or even forego some of these procedures in efforts to save on costs. According to the CDC, nearly one in four adults between the ages of 20 and 64 have untreated dental caries (like cavities or infections).

12. You Do Not Think of Yourself as Middle Class


This may be the most important distinction of all: For many, being middle class is simply a state of mind.

It implies a commonality with the rest of the country, an implicit understanding that you're pursuing the American dream by working hard, saving money, being responsible and providing for your children.

It's also an acknowledgement that you're being rewarded for your efforts. You aren't filthy rich, but you're comfortable enough. "It's a feeling, a touchstone. It defies numbers," Xavier University political scientist Gene Beaupre told The Cincinnati Enquirer in 2013. "It's a mindset that says, 'I'm part of the working fabric of American culture.'"

84 Statistics That Prove That The Decline Of The Middle Class Is Real And That It Is Getting Worse

The Truth

Exposing The Truth One Story At A Time…

Economy 

84 Statistics That Prove That The Decline Of The Middle Class Is Real And That It Is Getting Worse

August 23, 2012 Michael Snyder Better Future, Budgets, Buy A House, Cost Of Living, Economic Problems, Government Dependence, Jobs, Problems, Raise A Family, The American Dream, The Middle Class, Wages

The middle class in America is being systematically destroyed. 

Once upon a time the United States had the largest and most vibrant middle class in the history of the world.  The rest of the globe looked at us in envy and wondered what we were doing right.  But now everything seems to be going wrong for the middle class.  Millions of our jobs have been shipped out of the country and competition for the remaining jobs is keeping wages at depressed levels.  Meanwhile, the cost of living just keeps going up and up and middle class budgets are being stretched and strained like never before.  Millions more Americans fall out of the middle class and into poverty every single year, and government dependence is at an all-time high.  Finding a solution to the decline of the middle class is absolutely central to fixing the economic problems in this country.  Without a large, thriving middle class this would not be America.  The truth is that people from all over the world want to come here because they want to work hard, buy a house, raise a family and provide a better future for their children.  This has traditionally been “the land of opportunity”, but now the middle class is rapidly declining and none of our politicians seem to have any solutions.  With each passing day, the American Dream is slipping through the fingers of millions of hard working American families.  We owe it to them to get this thing fixed.

The following are 84 statistics that prove that the decline of the middle class is real and that it is getting worse….

1. According to the Pew Research Center, 61 percent of all Americans were “middle income” back in 1971.  Today, only 51 percent of all Americans are.
2. The Pew Research Center has also found that 85 percent of middle class Americans say that it is harder to maintain a middle class standard of living today compared with 10 years ago.
3. 62 percent of middle class Americans say that they have had to reduce household spending over the past year.
4. The average net worth of a middle class family in America was $129,582 in 2001.  By 2010 that figure had dropped to $93,150.
5. According to the Federal Reserve, the median net worth of all families in the United States declined “from $126,400 in 2007 to $77,300 in 2010“.
6. Back in 1970, middle income Americans brought home 62 percent of all income in the United States.  In 2010, middle income Americans only brought home 45 percent of all income.
7. After you adjust for inflation, median family income in the United States has fallen by about 6 percent since the year 2000.
8. Real median household income has decreased by more than 4000 dollars since Barack Obama entered the White House.
9. Amazingly, more than half of all Americans are now at least partially financially dependent on the government.
10. In 1970, 65 percent of all Americans lived in “middle class neighborhoods”.  By 2007, only 44 percent of all Americans lived in “middle class neighborhoods”.
11. If you can believe it, one recent survey found that 28 percent of all Americans do not have a single penny saved for emergencies.
12. The United States was once ranked #1 in the world in GDP per capita.  Today we have slipped to #12.
13. The total value of household real estate in the U.S. has declined from $22.7 trillion in 2006 to $16.2 trillion today.  Most of that wealth has been lost by the middle class.
14. Back in 2007, 19.2 percent of all American families had a net worth of zero or less.  By 2010, that figure had risen to 32.5 percent.
15. Since the year 2000, incomes for U.S. households led by someone between the ages of 25 and 34 have fallen by about 12 percent after you adjust for inflation.
16. In 1984, the median net worth of households led by someone 65 or older was 10 times larger than the median net worth of households led by someone 35 or younger.  Today, the median net worth of households led by someone 65 or older is 47 times larger than the median net worth of households led by someone 35 or younger.
17. Corporate profits as a percentage of GDP are at an all-time high.  Meanwhile, wages as a percentage of GDP are near an all-time low.
18. There are now 20.2 million Americans that spend more than half of their incomes on housing.  That represents a 46 percent increase from 2001.
19. The average American household spent approximately $4,155 on gasoline during 2011, and electricity bills in the U.S. have risen faster than the overall rate of inflation for five years in a row.
20. Over the past decade, health insurance premiums have risen three times faster than wages have in the United States.
21. Health insurance costs have risen by 23 percent since Barack Obama became president. According to the Bureau of Economic Analysis, health care costs accounted for just 9.5% of all personal consumption back in 1980.  Today they account for approximately 16.3%.
22. Back in 1983, the bottom 95 percent of all income earners had 62 cents of debt for every dollar that they earned.  By 2007, that figure had soared to $1.48.
23. Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.
24. Total consumer debt in the United States has risen by 1700 percent since 1971.
25. Recently it was announced that total student loan debt in the United States has passed the one trillion dollar mark.
26. One study found that approximately 41 percent of all working age Americans either have medical bill problems or are currently paying off medical debt.
27. According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States.  Of those bankruptcies that were caused by medical bills, approximately 75 percent of them involved individuals that actually did have health insurance.
28. According to a report released in 2010, Americans spend approximately twice as much as residents of other developed countries do on health care.
29. According to one recent survey, approximately 10 percent of all employers in the United States plan to drop health coverage when key provisions of the new health care law kick in less than two years from now.
30. According to one recent survey, approximately one-third of all Americans are not paying their bills on time at this point.
31. The wealthiest 20 percent of all Americans now control 84 percent of all the wealth in America.
32. Right now, over 50 percent of all stocks and bonds are owned by just 1 percent of the U.S. population.
33. Back in the 1970s, the top 1 percent of all income earners brought in about 8 percent of all income.  Today, they bring in about 21 percent of all income.
34. 40 years ago, the top 1/10,000th of all U.S. households brought in about 1 percent of all income.  Today, they bring in about 5 percent of all income.
35. Today, the wealthiest 1 percent of all Americans own more wealth than the bottom 95 percent combined.
36. The wealthiest 400 families in the United States have about as much wealth as the bottom 50 percent of all Americans do combined.
37. The six heirs of Wal-Mart founder Sam Walton have a net worth that is roughly equal to the bottom 30 percent of all Americans combined.
38. At this point, the poorest 50 percent of all Americans collectively own just 2.5% of all the wealth in the United States.
39. The following is how income gains in the United States were distributed during 2010….
-37 percent of all income gains went to the top 0.01 percent of all income earners
-56 percent of all income gains went to the rest of the top 1 percent
-7 percent of all income gains went to the bottom 99 percent
40. The U.S. economy lost more than 220,000 small businesses during the recent recession.
41. The percentage of Americans that are self-employed fell by more than 20 percent between 1991 and 2010.
42. Overall, the number of “new entrepreneurs and business owners” dropped by a staggering 53 percent between 1977 and 2010.
43. In 2010, the number of jobs created at new businesses in the United States was less than half of what it was back in the year 2000.
44. The average pay for self-employed Americans fell by $3,721 between 2006 and 2010.
45. In the United States today, there are 240 million working age people.  Only about 140 million of them are working.
46. Since the year 2000, the United States has lost 10% of its middle class jobs.  In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.
47. Back in 1950, more than 80 percent of all men in the United States had jobs.  Today, less than 65 percent of all men in the United States have jobs.
48. Right now, approximately 25 million American adults are living with their parents.
49. According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 dropped by 27 percent after you account for inflation.
50. According to U.S. Representative Betty Sutton, America has lost an average of 15 manufacturing facilities a day over the last 10 years.  During 2010 it got even worse.  That year, an average of 23 manufacturing facilities a day shut down in the United States.
51. At this point, one out of every four American workers has a job that pays $10 an hour or less.
52. Today, about one out of every four workers in the United States brings home wages that are at or below the poverty level.
53. If you can believe it, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.
54. Back in 1980, less than 30% of all jobs in the United States were low income jobs.  Today, more than 40% of all jobs in the United States are low income jobs.
55. At this point, only 24.6 percent of all jobs in the United States are considered to be good jobs.
56. Right now, approximately 48 percent of all Americans are either considered to be “low income” or are living in poverty.
57. Approximately 57 percent of all children in the United States are living in homes that are either considered to be either “low income” or impoverished.
58. In the United States today, somewhere around 100 million Americans are considered to be either “poor” or “near poor”.
59. In 2010, 2.6 million more Americans descended into poverty.  That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.
60. It is being projected that when the final numbers come out later this year that the U.S. poverty rate will be the highest that it has been in almost 50 years.
61. It is also being projected that about half of all American adults will spend at least some time living below the poverty line before they turn 65.
62. Today, one out of every six elderly Americans lives below the federal poverty line.
63. It was recently reported that 1.5 million American families live on less than two dollars a day (before counting government benefits).
64. According to the U.S. Census Bureau, the percentage of “very poor” rose in 300 out of the 360 largest metropolitan areas during 2010.
65. According to one recent poll, 18.2 percent of all Americans have not been able to buy enough food to eat at some point during this past year.
66. Households that are led by a single mother have a 31.6% poverty rate.
67. In 2010, 42 percent of all single mothers in the United States were on food stamps.
68. At this point, approximately 22 percent of all American children are living in poverty.
69. According to the National Center for Children in Poverty, 36.4 percent of all children that live in Philadelphia are living in poverty, 40.1 percent of all children that live in Atlanta are living in poverty, 52.6 percent of all children that live in Cleveland are living in poverty and 53.6 percent of all children that live in Detroit are living in poverty.
70. Since 2007, the number of children living in poverty in the state of California has increased by 30 percent.
71. Child homelessness in the United States has risen by 33 percent since 2007.
72. There are 314 counties in the United States where at least 30% of the children are facing food insecurity.
73. Approximately one-fourth of all American children are enrolled in the food stamp program.
74. It is projected that half of all American children will be on food stamps at least once before they turn 18 years of age.
75. Since Barack Obama became president, the number of Americans living in poverty has risen by 6 million and the number of Americans on food stamps has risen by 14 million.
76. According to the U.S. Census Bureau, 49 percent of all Americans live in a home where at least one person receives benefits from the federal government.  Back in 1983, that number was below 30 percent.
77. Federal housing assistance outlays increased by a whopping 42 percent between 2006 and 2010.
78. Approximately 50 million Americans do not have any health insurance at all right now.
79. Back in 1965, only one out of every 50 Americans was on Medicaid.  Today, approximately one out of every 6 Americans is on Medicaid.
80. It is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.
81. Overall, the amount of money that the federal government gives directly to the American people has risen by 32 percent since Barack Obama entered the White House.
82. According to a recent report produced by Pew Charitable Trusts, approximately one out of every three Americans that grew up in a middle class household has slipped down the income ladder.
83. If you can believe it, more than 100 million Americans are enrolled in at least one welfare program run by the federal government at this point.
84. In the United States today, 77 percent of all Americans are living to paycheck to paycheck at least some of the time.
In compiling the information above, I relied heavily on research that I had previously done for The Economic Collapse Blog and The American Dream Blog.
So what do all of you think about the decline of the middle class?

Paul Krugman: Why Jeb-onomics Is Just Voodoo Economics All Over Again

Economy

Paul Krugman: Why Jeb-onomics Is Just Voodoo Economics All Over Again

 

Here comes some more plutocrat wishful thinking.

 

 

By Janet Allon / AlterNet

June 19, 2015

Photo Credit: Prolineserver / Wikimedia Commons

Make no mistake, Paul Krugman writes in Friday's column, no matter how much "Jeb!" tries to distance himself from his last name, what he is offering up economically speaking is the same failed conservative ideology that his own father even recognized as "voodoo economics."

In his announcement speech for the presidency this week, Bush made the absurd promise that he would double the country's economic growth to 4 percent. First off, as Krugman points out, no one knows how to do that.

I’ll get to Jeb-onomics in a minute, but first let me tell you about a dirty little secret of economics — namely, that we don’t know very much about how to raise the long-run rate of economic growth. Economists do know how to promote recovery from temporary slumps, even if politicians usually refuse to take their advice. But once the economy is near full employment, further growth depends on raising output per worker. And while there are things that might help make that happen, the truth is that nobody knows how to conjure up rapid productivity gains.

Why, then, would Mr. Bush imagine that he is privy to secrets that have evaded everyone else?

One answer, which is actually kind of funny, is that he believes that the growth in Florida’s economy during his time as governor offers a role model for the nation as a whole. Why is that funny? Because everyone except Mr. Bush knows that, during those years, Florida was booming thanks to the mother of all housing bubbles. When the bubble burst, the state plunged into a deep slump, much worse than that in the nation as a whole. Taking the boom and the slump together, Florida’s longer-term economic performance has, if anything, been slightly worse than the national average.

The key to Mr. Bush’s record of success, then, was good political timing: He managed to leave office before the unsustainable nature of the boom he now invokes became obvious.

Apart from this tiresome tendency to take credit for merely having somewhat good timing, Bush is just promising the radical plutocrat tax-cutting plan for the country that has already been demonstrated to be an utter failure in places like Kansas. And he is selling that notion by promising growth. Same old dangerous wishful thinking as always. "Way back in 1980, George H.W. Bush, running against Reagan for the presidential nomination, famously called it 'voodoo economic policy,'" Krugman points out. "And while Reaganolatry is now obligatory in the G.O.P., the truth is that he was right."

So, there was this one time when a Bush was right.

How the Shenanigans in Congress Over the TPP Trade Deal Threatens the Fundamentals of Our Democracy

Economy

How the Shenanigans in Congress Over the TPP Trade Deal Threatens the Fundamentals of Our Democracy

Progressives scored a victory but it's only round one.

By Bill Moyers, Bernard Weisberger / BillMoyers.com

June 15, 2015

WASHINGTON D.C., USA - Sep 18, 2014: United States President Barack Obama during an official meeting with the President of Ukraine Petro Poroshenko in Washington, DC (USA)

Photo Credit: Drop of Light / Shutterstock.com

Pro-democracy forces won a big victory Friday when they stalled the top-secret Trans-Pacific Partnership trade agreement backed by the White House and the Republican leadership in Congress.

But it’s only Round One. The unholy trio of Republican Senate Majority Leader Mitch McConnell (who has vowed to keep any of Obama’s nominees from being confirmed), Speaker of the House John Boehner (who has thwarted just about every Democratic legislative proposal of the past several years), and President Obama (a Democrat, in case you are having trouble remembering) are as one in a desperate effort to rescue their Frankenstein-like creation.

Their only hope is to bribe, browbeat, or brainwash enough House members to change their minds. It could happen. The journalist John R. MacArthur, writing late last week in the Providence Journal, tells how New York Democrat Kathleen Rice flip-flopped. Not long ago, she opposed fast-tracking the Trans-Pacific Partnership because she worried it would not “protect her district’s working families.” As well she might; this agreement is everything the giant corporations want; it decidedly wasn’t written with working people in mind.

But last week, Rep. Rice suddenly stopped worrying about those workers and went over to the other side, voting in favor of fast-tracking one of the most massive giveaways to multinational companies ever -- including corporations that have been shipping jobs overseas and pocketing their swollen off-shore profits to avoid taxes.

How in the world could Rice betray her working-class constituents, the people who trusted her to look after their interests? What changed her mind? For one thing, the president assured turncoats like Rice that he would “have their back” if he had their votes. We can’t know what that means, writes John MacArthur, “since the political deals that grease the way for unpopular legislation aren’t ordinarily announced in press releases or high-minded op-eds. The nasty facts tend to come out later, after the damage has been done.”

For now, we can only rub our eyes at the spectacle. Look at this headline in The Washington Post after Democrats defeated the Obama-McConnell-Boehner-Republican cabal on Friday: “New questions arise about House Democratic caucus’s loyalty to Obama.”

Say what? Shouldn’t that headline read: “New questions arise about president’s loyalty to House Democratic caucus?” Obama often has treated Democrats in Congress as if they’ve been quarantined for Ebola; they’re more likely to get into the White House if they dress up on Halloween as Republicans and go trick-or-treating at 1600 Pennsylvania Avenue.

But now the president demands they play on his side, with McConnell and Boehner as co-captains. The evening before the big vote he showed up at the congressional baseball game, hoping his presence would inspire some last-inning runs during Friday’s showdown. Republicans at the game reportedly cheered when the president arrived, while Democrats looked on in surprise at the unexpected appearance of their often furtive “leader.”

So now the president and his sworn enemies are allied in a bizarre mutual embrace of voodoo economics, assuring us that what’s good for multinational giants is good for struggling Americans trying to pay their bills while waiting below for the benefits of “free trade” to trickle down.

As The New York Times reported, corporate America has been nearly unanimous in its support of the trade agreement. No surprise: their lobbyists and lawyers practically wrote it. And on Friday their CEOs were loud and clear in voicing their displeasure over the impudence of the House in defying them. The National Association of Manufacturers, among others, declared that manufacturers “will not back down in this fight for expanded trade, for the future of our industry and our country.”

Ah, yes, that’s the argument: what’s good for global giants is good for workers. Yet we’re left to wonder at Rep. Rice’s motive for her turnaround when it betrays the working folk that only a bit earlier she was defending.

The promise of these trade agreements is at best an illusion, at worst, a lie – as we learned after the passage of the North American Free Trade Agreement (NAFTA) more than 20 years ago.

The treaty and the devastation of jobs that followed would not have happened without House Democratic Majority Leader Richard Gephardt. For 28 years, he represented a working-class district in St. Louis. Then he flipped. He supported fast-track for NAFTA and helped clear the way for the passage of fast-track by negotiating with the first President Bush, John R. MacArthur writes, “to insert labor and environmental standards into future negotiations with Mexico and Canada.” But nothing enforceable for workers or the environment ever emerged from those negotiations. It was a hollow promise.

Gephardt wound up voting against the final treaty, but the damage was done and he left Congress to become one of the top corporate lobbyists in Washington. Among his clients has been that great friend of the working class, Goldman Sachs. How many votes cast for the trade deal last Friday came from politicians aware of the prospective job opportunities waiting on the other side of that infamous revolving door?

Or are we just getting too cynical? The issue before us is not “free trade,” which, like any policy, has its pluses and minuses. The issue is that a multilateral trade agreement should not be negotiated in secret, but in the open by our State and Commerce departments, with input from all organizations concerned, including those representing workers and environmentalists.

Then there should come a draft document for all to see, to be laid before the people’s representatives in Congress assembled. If and when a majority of them ratifies the agreement, it can go to the president for signature. This is how democracy should work.

Yet it’s the precise opposite of how this agreement has come to be. We are being asked to believe that the administration can argue with a straight face for a deal conceived in secrecy, drafted largely by corporate mercenaries, kept from public and Congressional view except with burdensome restrictions, then presented to Congress for a vote up or down, neither debate nor amendment allowed. It’s an absolute parody of the process described in the Constitution.

And where, oh where, are the “strict constructionists” on the Republican side? What happened to their proclaimed reverence for every syllable of the Constitution, their insistence that each must be interpreted precisely as understood in 1789?

Instead we are told that we must put aside principle and common sense on the pretended grounds that in the changing world of global economics, it is a necessary procedure. That’s bull — the same nonsense used to repeal the Glass-Steagall Act during the Clinton administration: the word went forth that in a modern economy, controls and regulations were obsolete remnants of a different era, standing in the way of universal prosperity.

As we learned, that fallacious and duplicitous argument led to a windfall for Wall Street bankers who subsequently had to be bailed out by taxpayers, only to survive and return to their predatory habits in this “modern economy.”

This whole affair is outrageous. After 226 years of constitutional government, is this where we’ve finally arrived?

So what can we do against so monstrous a lie? First, call this deal out for what it is — an abomination. Then let the tsunami of popular outrage roll. Tell Congress and the White House what you think. But hurry! Time’s running out, and Obama, McConnell, Boehner and the lobbyists are working overtime to get the locomotive back on the fast-track.

Bill Moyers is the host of the weekly public television series Moyers & Company. Moyers has received 35 Emmy awards, nine Peabody Awards, the National Academy of Television’s Lifetime Achievement Award, and an honorary doctor of fine arts from the American Film Institute over his 40 years in broadcast journalism.

SALON

Monday, May 4, 2015 02:58 PM EDT

Republican presidents flunk the economy: 11 reasons why America does worse under the GOP

The data is unequivocal: The economy performs far better under Democrats than Republicans. Here's why

Sean McElwee

Topics: Hillary Clinton, 2016 Elections, Economics, Ronald Reagan, Barack Obama, The Republican Party, The Democratic Party, economic policy, News, Politics News

George W. Bush (Credit: AP/Susan Walsh)

 

Consider the following fact: The last time a Republican president created an average of 1 million jobs a year over the course of his presidency was nearly three decades ago, under Ronald Reagan. When the the 2016 election comes around, a full 44 percent of voters will have entered the workforceafter that period of time. Then consider that Barack Obama has created 7.35 million jobs since taking office, and will almost certainly cross the million-per-year threshold. And that, for many Americans, the last time the economy was working for them was under Bill Clinton.

As the chart below (using data from the Economic Policy Institute) shows, the last time Americans at the bottom of the income distribution had a raise was during the sustained employment growth under Bill Clinton.



The conclusion? If Democrats want to win the White House, they need to promote a progressive, pro-jobs agenda.

I’ve previously discussed the rather large body of research suggesting that not only does the economy perform better under Democrats, it tends toperform better for everyone under Democrats. People of color do far better in terms of employment, incarceration and income growth when a Democrat is in office. The incomes of the poorest tend to increase more rapidly as well. Both effects are likely tied to two major policies: First, Democrats tend to preside over lower unemployment rates; and, second, they are far more likely to raise the minimum wage. There are other factors at work, of course: I’ve noted how market conditioning (things like regulatory policy) can change outcomes as well. But another major factor is that the key to increasing the bargaining power of workers and creating a more racially just society is jobs. And progressive policy creates jobs.

There are several specific factors that explain this.

(1) Liberal governments tend to invest more money in infrastructure and education, both of which bolster growth.

(2) While conservative governments try to maximize growth for the rich by reining in inflation, progressives benefit everyone by reducing unemployment.

(3) Conservatives spend a large amount of their political capital reducing labor force participation among gays, people of color and women. Conservatives oppose policies that would help women balance work and family responsibilities, openly sabotage their economies to discriminate against gays, and pursue policies that overwhelmingly harm people of color. By doing this, conservative governments shut out talent and competition, in all probability harming economic growth: One study finds that about one-fifth of the increase in productivity growth between 1960 and 2008 can be explained by the increase in talent from women and people of color getting jobs they were previously excluded from.

(4) Conservatives pursue policies that increase inequality, which studies suggest can also slow growth.

(5) Conservatives are less queasy about the influence of money on politics, fostering cronyism that can undermine growth.

(6) A weak safety net means that fewer Americans can take entrepreneurial risk, when entrepreneurship is a key factor in bolstering growth.

(7) By creating a winner-take-all economy, conservative governance reduces social trust necessary for growth.

(8) By promoting war and violence abroad, and a bloated military at home, conservative governments reduce the money available for clean energy, healthcare, education and tax cuts for the middle class, which create more jobs. Matt Yglesias also argues it could increase oil shocks, thereby harming growth.

(9) By promoting an oversized and unregulated financial system, conservative governments make crisis more likely. Studies also suggest that when the financial sector gets too large it starts to reduce growth.

(10) By reducing upward mobility, conservative governments reduce growth by leaving millions of opportunity-less youth mired in poverty.
(11) Conservatives are less amenable to more open immigration policies, when immigration boosts growth.

Whichever of these factors cause conservative governments to be less effective, the differences are stark. The chart below shows the average job growth under each president over the last 75 years.





Bloomberg examined private sector job growth between January 1961 and April 2012. Over that period, Republicans have held the Presidency for 28 years and Democrats for 23. Republican presidents created 71,000 jobs per month, while Democratic presidents created 150,000. In total, Democrats created 42 million jobs, compared to Republicans 24 million.

All of this means that Hillary Clinton should embrace jobs and argue that progressive policies can unleash economic growth. She should argue that the country needs a proactive government working with the free market to best promote the interests of all Americans, not just the rich. As Bob Moser notes in the American Prospect, the most successful Democratic candidates have been those who embraced economic populism rather than a fuzzy centrism. He points to Gary Peters, the only freshman Democratic Senator, who ran a populist campaign that targeted the Kochs for their plutocratic policies. Moser notes that three of unabashed populist progressives — Jeanne Shaheen, Jeff Merkley and Al Franken — not only won their elections but also won white working class voters at a time when Democrats nationally lost them by 30 percentage points.
(Peters lost the white working class, but only 47 percent to 48 percent.)
Dorian Warren is an associate professor at Columbia and a Fellow at the Roosevelt Institute who is leading “Putting Families First: Good Jobs for All,” ​which seeks to put jobs at the center of the political agenda. He tells Salon via e-mail that a jobs-centered Presidential campaign could be a political winner: “It is time to embrace a simple but achievable idea: that government should take action to create millions of good, new jobs in emerging sectors and ensure these jobs are open and accessible to all, guarantee decent wages and benefits for all who want to work, and ensure equity in the labor market for women and people of color.”

Warren cites research by Celinda Lake showing that three core messages resonate with Americans across the political spectrum: infrastructure spending, government investment in green energy and government creating jobs in high unemployment communities, particularly communities of color. As the chart below shows, progressive policies are popular with the Rising American Electorate (African Americans, Hispanics, millennials, and unmarried women) who veteran pollster Stanley Greenberg notes will be more than half of the electorate in 2016.




The Lake memo also notes that turnout is key to a progressive victory. In 2014, 34.5 percent of the Rising American Electorate who voted Obama for Obama’s re-election in 2012 stayed home. Mobilizing these voters will be key.

If Clinton is the nominee, she should emphasize the track record of Democrats creating and sustaining jobs. Instead of running away from Obama’s achievements should build on them. She should focus her message on a strong public sector being necessary for a strong private sector. By setting the rules for fair play, the government ensures that those who get ahead do so by creating value, rather than extracting it. By investing in the next generation, government gives private companies an educated and highly trained workforce. By ensuring paid sick leave, childcare and universal pre-k, the government allows women to bring their skills to creating prosperity. The difference between conservative and progressive governance is simple: one benefits a small elite while the other promotes widespread prosperity.

Sean McElwee's writing may be viewed at seanamcelwee.com. Follow him on Twitter at @seanmcelwee.
 

Robert Reich: The Nightmarish Future for American Jobs and Incomes Is Here

Economy

Robert Reich: The Nightmarish Future for American Jobs and Incomes Is Here

Even knowledge-based jobs will disappear as wealth gets more concentrated at the top in the next 10 years.

 

 

By Robert Reich / RobertReich.org

 

May 7, 2015

 

 

Photo Credit: via YouTube

What will happen to American jobs, incomes, and wealth a decade from now?
Predictions are hazardous but survivable. In 1991, in my book The Work of Nations, I separated almost all work into three categories, and then predicted what would happen to each of them.

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The first category I called "routine production services," which entailed the kind of repetitive tasks performed by the old foot soldiers of American capitalism through most of the twentieth century -- done over and over, on an assembly line or in an office.

I estimated that such work then constituted about one-quarter of all jobs in the United States, but would decline steadily as such jobs were replaced by new labor-saving technologies and by workers in developing nations eager to do them for far lower wages. I also assumed the pay of remaining routine production workers in America would drop, for similar reasons.

I was not far wrong.

The second category I called "in-person services." This work had to be provided personally because the "human touch" was essential to it. It included retail sales workers, hotel and restaurant workers, nursing-home aides, realtors, childcare workers, home health-care aides, flight attendants, physical therapists, and security guards, among many others.

In 1990, by my estimate, such workers accounted for about 30 percent of all jobs in America, and I predicted their numbers would grow because -- given that their services were delivered in person -- neither advancing technologies nor foreign-based workers would be able to replace them.

I also predicted their pay would drop. They would be competing with a large number of former routine production workers, who could only find jobs in the "in-person" sector. They would also be competing with labor-saving machinery such as automated tellers, computerized cashiers, automatic car washes, robotized vending machines, and self-service gas pumps -- as well as "personal computers linked to television screens" through which "tomorrow's consumers will be able to buy furniture, appliances, and all sorts of electronic toys from their living rooms -- examining the merchandise from all angles, selecting whatever color, size, special features, and price seem most appealing, and then transmitting the order instantly to warehouses from which the selections will be shipped directly to their homes. So, too, with financial transactions, airline and hotel reservations, rental car agreements, and similar contracts, which will be executed between consumers in their homes and computer banks somewhere else on the globe."

Here again, my predictions were not far off. But I didn't foresee how quickly advanced technologies would begin to make inroads even on in-person services. Ten years from now I expect Amazon will have wiped out many of today's retail jobs, and Google's self-driving car will eliminate many bus drivers, truck drivers, sanitation workers, and even Uber drivers.

The third job category I named "symbolic-analytic services." Here I included all the problem-solving, problem-identifying, and strategic thinking that go into the manipulation of symbols—data, words, oral and visual representations.
I estimated in 1990 that symbolic analysts accounted for 20 percent of all American jobs, and expected their share to continue to grow, as would their incomes, because the demand for people to do these jobs would continue to outrun the supply of people capable of doing them. This widening disconnect between symbolic-analytic jobs and the other two major categories of work would, I predicted, be the major force driving widening inequality.

Again, I wasn't far off. But I didn't anticipate how quickly or how wide the divide would become, or how great a toll inequality and economic insecurity would take. I would never have expected, for example, that the life expectancy of an American white woman without a high school degree would decrease by five years between 1990 and 2008.

We are now faced not just with labor-replacing technologies but with knowledge-replacing technologies. The combination of advanced sensors, voice recognition, artificial intelligence, big data, text-mining, and pattern-recognition algorithms, is generating smart robots capable of quickly learning human actions, and even learning from one another. A revolution in life sciences is also underway, allowing drugs to be tailored to a patient's particular condition and genome.
If the current trend continues, many more symbolic analysts will be replaced in coming years. The two largest professionally intensive sectors of the United States -- health care and education -- will be particularly affected because of increasing pressures to hold down costs and, at the same time, the increasing accessibility of expert machines.

We are on the verge of a wave of mobile health applications, for example, measuring everything from calories to blood pressure, along with software programs capable of performing the same functions as costly medical devices and diagnostic software that can tell you what it all means and what to do about it.

Schools and universities will likewise be reorganized around smart machines (although faculties will scream all the way). Many teachers and university professors are already on the way to being replaced by software -- so-called "MOOCs" (Massive Open Online Courses) and interactive online textbooks -- along with adjuncts that guide student learning.

As a result, income and wealth will become even more concentrated than they are today. Those who create or invest in blockbuster ideas will earn unprecedented sums and returns. The corollary is they will have enormous political power. But most people will not share in the monetary gains, and their political power will disappear. The middle class's share of the total economic pie will continue to shrink, while the share going to the very top will continue to grow.

But the current trend is not preordained to last, and only the most rigid technological determinist would assume this to be our inevitable fate. We can -- indeed, I believe we must -- ignite a political movement to reorganize the economy for the benefit of the many, rather than for the lavish lifestyles of a precious few and their heirs. (I have more to say on this in my upcoming book, Saving Capitalism: For the Many, Not the Few, out at the end of September.)

Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President Obama's transition advisory board. His latest book is "Aftershock: The Next Economy and America's Future." His homepage is www.robertreich.org.

7 Things the Middle Class Can’t Afford Anymore

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Personal Finance

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7 Things the Middle Class Can’t Afford Anymore

• Erika Rawes  

 

 

April 17, 2015 

 

Source: Thinkstock

During debates and speeches, politicians often bring up the financial burden that’s placed on the middle class. We talk about the middle class as though they are this singular entity, who used to thrive until they underwent persecution by the evil 1%. But, realistically speaking, the middle class and the 99% are not really synonymous. So, who are the middle class?

In its discussion of historical middle class societies, The Economist reports, “Their members are neither rich nor poor but somewhere in-between…’Middle-class’ describes an income category but also a set of attitudes…An essential characteristic is the possession of a reasonable amount of discretionary income. Middle-class people do not live from hand to mouth, job to job, season to season, as the poor do.”

Some argue that the most sensible income amount to attach to the middle class would be the median household income, of around $54,000. Perhaps, anyone who earns between the 25th percentile and 75th percentile is a member of the middle class.

Diana Farrell, once Deputy Director of America’s National Economic Council, told The Economist she thinks a middle class income begins at the point where a person (or family) has one-third of their income left over for discretionary purposes after they’ve provided themselves with food and shelter. In other words, someone who earns $3,000 per month would have $1,000 left after they’ve paid their mortgage or rent, utilities, and grocery bills.

Though there is some debate over the exact income a middle class household brings in, we do have an idea of who the middle class are — most working class people. Today’s bourgeoisie is composed of laborers and skilled workers, white collar and blue collar workers, many of whom face financial challenges. Bill Maher reminded us a few months back that 50 years ago, the largest employer was General Motors, where workers earned an equivalent of $50 per hour (in today’s money). Today, the largest employer — Walmart — pays around $8 per hour.

The middle class has certainly changed. We’ve ranked a list of things the middle class can no longer really afford. We’re not talking about lavish luxuries, like private jets and yachts. The items on this list are a bit more basic, and some of them are even necessities. The ranking of this list is based on affordability and necessity. Therefore, items that are necessity ranked higher, as did items that a larger percentage of people have trouble paying for.

Source: Thinkstock

1. Vacations

A vacation is an extra expense that many middle-earners cannot afford without sacrificing something else. A Statista survey found that this year 54% of people gave up purchasing big ticket items like TVs or electronics so they can go on a vacation. Others made sacrifices like reducing or eliminating their trips to the movies (47%), reducing or eliminating trips out to restaurants (43%), or avoiding purchasing small ticket items like new clothing (43%).

Source: Thinkstock

2. New vehicles

Very few people who earn the median income can afford to buy a new car or truck. Interest.com recently analyzed the prices of new cars and trucks, as well as the median incomes across more than two dozen major cities, and found that new cars and trucks were simply not affordable to most middle-earners.
“Median-income families in only one major city [Washington DC] can afford the average price Americans are paying for new cars and trucks nowadays.” As of 2013, new cars are priced at $32,086, according to the study. Mike Sante, Interest.com’s managing editor reminds us, “just because you can manage the monthly payment doesn’t mean you should let a $30,000 or $40,000 ride gobble up all such a huge share of your paycheck.”

 

Source: Thinkstock

3. To pay off debt

These debt statistics come from Debt.org:

• “More than 160 million Americans have credit cards.”
• “The average credit card holder has at least three cards.”
• “On average, each household with a credit card carries more than $15,000 in credit card debt.”

Not only do we have large amounts of credit card debt, we also have student loans, mortgages, cars, and medical debts. Our debt is growing faster than our income, and many middle class workers have trouble staying afloat. Money-Zine evaluated debt growth and income growth over the past few decades and found that “back in 1980, the consumer credit per person was $1,540, which was 7.3% of the average household income of $21,100. In 2013, consumer debt was $9,800 per person, which was 13.4% of the average household income of $72,600. This means debt increased 70% faster than income from 1980 through 2013.”

 

Source: Thinkstock

4. Emergency savings

To provide ourselves with a degree of financial security, we are supposed to have emergency savings to protect ourselves in the event of job loss, illness, or some other catastrophe. Most members of the middle class don’t have at least six months of emergency savings, however, and some working people have no such savings.

A Bankrate survey found that only around one out of four households have six months of emergency money saved, and many of them are in the higher income groups. Another one-fourth have no emergency savings at all, and the remaining household have a small to moderate amount of savings, but not enough to cover six months of expenses.

 

Source: Thinkstock

5. Retirement savings

If you reach the retirement age with little or no money saved, Social Security is probably not going to be enough to cover your basic needs. Even if you want to work for your entire life, you have no way of knowing whether or not you will be physically capable of doing so.

Although having a lack of a retirement savings is a risky move, so many people bet on double zero, just hoping that things will work out in their favor. While some members of the middle class neglect this aspect of financial planning because they are procrastinating, there are also some workers who cannot afford to set this money aside. Nearly half of those who don’t save for retirement say it’s because they simply don’t have the money.

As of late, around 20% of people near 65 have not saved anything for retirement at all, and the majority of people — 59% — worry that they don’t have enough money saved for retirement, according to a Gallup Poll.

 

Source: Thinkstock

6. Medical care

Medical care is a basic necessity and something we’d think would be affordable for someone earning a middle income. A Forbes article published data indicating that workers in large companies — many of whom are members of the middle class — “face nearly $5,000 in premiums, co-payments, deductibles and other forms of co-insurance.”

During the past few years, these costs have had a large impact on working Americans. A report by Feeding America found that a shocking 66% of households say they’ve had to choose between paying for food and paying for medical care — 31% say they have to make that choice each and every month.

 

Source: Thinkstock

7. Dental work

According to the U.S. Department of Health and Human Services, “the U.S. spends about $64 billion each year on oral health care — just 4 percent is paid by Government programs.” About 108 million people in the U.S. have no dental coverage and even those who are covered may have trouble getting the care they need, the department reports.

Oftentimes, people will purchase medical coverage and forgo dental because it’s so expensive. Plus, dental insurance may cover only 50% of the more expensive procedures, like crowns and bridges. This leaves those who have insurance with large co-payments.

In many cases, middle-earners will delay or even forego some of these procedures in efforts to save on costs. According to the CDC, nearly one in four adults between the ages of 20 and 64 have untreated dental caries (like cavities or infections).