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Why is the American Middle Class So Poor?

  1. My Esoteric profile image89
    My Esotericposted 3 years ago

    To cement the fact that since the 1980s, the rich have been getting richer because the middle class is shrinking and the poor are getting poorer was the recent announcement that the American Middle Class, the bulwark of this Nation, is no longer the richest middle class in the world and has fallen way behind Europe; so has our poor.  Why has more than their fair share of the growth gone to the wealthiest people in America?  Is it because 38% of Americans who pay income taxes (that is 95% of the poorest people minus the famous 47% (most of who work or are retired or disabled) that don't pay income taxes) sit on their arses and contribute nothing to this nations productivity?  Based on the popular rhetoric, the 47% obviously deserve nothing since they contribute nothing toward growth.  (For those who missed, that is satire.)

    1. wilderness profile image96
      wildernessposted 3 years ago in reply to this

      Define "fair share", please, without interjecting personal opinions into it?

      1. My Esoteric profile image89
        My Esotericposted 3 years ago in reply to this

        I am glad you asked, it needed defining.

        If economic growth (GDP) increases 3% plus inflation, then the median income of each quintile except the bottom ought to increase by about 3% plus inflation as well.  I say except the bottom 20% because that is the stratification that contains the largest number of minimum wage workers, retirees, disabled, unemployed, and yes, the welfare cheats as well.  The first of the bottom 20% are caught politically and depend on Congress for raises as no company will give them one, and the next two (and similar) of those groups in the bottom quintile should grow by at least inflation but not necessarily at GDP (again determined by the vagaries of the stock market, Congress, union contracts, or other such entities that controls their retirement income) since they weren't productive in the growth itself other than creating demand.

        It is demonstrable (in other hubs of mine) that this has not been the case since the 1980s and between 2007 and 2010, the middle class median income fell dramatically in the Great Recession and its aftermath while the long-term rich (meaning they were rich prior to 2004) only took a one year hit in 2009, I believe.  (Just to be clear, I exclude those who got rich flipping, selling, brokering, mortgaging houses or got rich on paper because of the housing bubble who went bust when the bubble did.)

        1. wilderness profile image96
          wildernessposted 3 years ago in reply to this

          Would you accept value, in terms of, say, 1950, of goods that can be bought rather than income?

          If GDP has doubled since 1950 should we be able to have a car priced at double what we could have had in 1950?  A home priced at double the cost of the 1950 one?  Or should it be based on value, where the home doubles in size, regardless of cost?  (Potential problem with value as people assign different values to things).

          And at the very upper end, the very rich, how do you justify that as competition doubles and triples their salary doesn't (by your method)?  (Population doubles, but the number of top CEO's remains fairly static).

          1. My Esoteric profile image89
            My Esotericposted 3 years ago in reply to this

            I think you are talking apples and oranges, @Wilderness.  I am not sure how "value" or population plays into the question you asked me.  Are you suggesting alternatives GDP to measure what is "fair"?

            1. wilderness profile image96
              wildernessposted 3 years ago in reply to this

              Yes.  I look at the middle (or bottom) class that they have far, far more in the way of luxuries than they did when I grew up.  Are they poor? 

              And the rich probably "deserve" more than a simple increase of GDP would indicate.  When top salaries are tied directly to profits/stock price (whichever seems more important to the BOD) then the top earners would seem to earn their astronomical pay, regardless of what you think is "fair".

    2. GA Anderson profile image82
      GA Andersonposted 3 years ago in reply to this

      I read your post to be a condemnation of the rich, and our current capitalistic structure that seems rigged to make them richer - at the expense of everyone else. Did I get it right?

      With that perspective I will jump in. Although Wilderness posed the most pertinent question for you first... what do you think is their "fair share?"

      But I will follow by asking if you really meant to say what you said...

      Removing the parenthesis that explain how you came up with the 38% figure, you sentence then reads:
      " Is it because 38% of Americans who pay income taxes.......... sit on their arses and contribute nothing to this nations productivity?

      That's not what you really meant is it? I know, I know, it's picky, but if you are going to slam someone, at least get the someone right.

      Yes, the system is rigged. Success is rewarded. Risk taking is rewarded.

      Yes, the system is rigged as I take your inference to be. There are too many tax breaks that benefit only the rich. What's so wrong with a luxury tax on those multimillion dollar yachts and super cars? Why shouldn't capital gains be taxed just like a wage earners paycheck, why do the rich get a lower rate just because their money doesn't come from an hourly wage?  Why is it fair if a rich man's $5 million dollar tax payment was only 15% of the money he made that year, when  Joe the Plumber's $3300 tax payment was  21% of his adjusted gross income? It is the percentages that matter, and not the actual dollars into the treasury - right?[satire?]

      That was fun. To offer a second realistic comment on what I perceived to be your point... yes, monied interests, (rich people, rich companies, rich organizations), have bought favorable tax and business rulings - but that isn't the whole picture.

      Is it fair to blame them, or should you be blaming the politicians they bought?

      GA

      1. My Esoteric profile image89
        My Esotericposted 3 years ago in reply to this

        Have to head up to Virginia in a moment, @GA, but no, you didn't get it right.  Between 1950 and 1980, when we had the same capitalistic structure, the benefits of growth were much more evenly distributed among the income groups.  While the rich still got richer, just at a much slower rate.  The rate was low enough to allow the middle class, in terms of numbers of them, to keep on expanding; such is not the case today. 

        I have nothing against the rich, I am one, barely; what I do condemn is having the game rigged against everybody else from attaining that goal and that is the way it is today.  We need to go back to the way it was (a nice conservative idea) in the 1960s and 1970s; covering both Democratic and Republican administrations.

        1. rhamson profile image77
          rhamsonposted 3 years ago in reply to this

          A funny thing with going back is that it never quite looks the same. When the growth of the 50's and 60' was taking place there was a housing boom. We are decreasing the birth rate so the engine that created many of these jobs has subsided as well. Manufacturing was booming as well but much of that has been shipped offshore. Some manufacturing is returning but that is stymied by mechanization which cuts back on jobs as well. So what are we to do to increase income of the poor and middle class? Just take what we need from those who foresaw and directed their efforts accordingly? The disconnect between those that invest and risk against those that physically produce is what at the heart of the issue. Should there be such a disparity because capitalism makes it possible or is it capitalism lends itself to this divide because it wants to? Who could regulate or mediate such a thing. Since unions seem to be the dirty word to many in this situation who is to effect a change to get it back on track more equally? An interesting dilemma if ever there was one.

          1. My Esoteric profile image89
            My Esotericposted 3 years ago in reply to this

            Correct me if I am wrong, @Rhamson, but seem to be saying with your birth rate comment that the population growth in the U..S. has gone negative, for you are absolutely right population growth is the engine for economic growth.  Or, are you saying the decline in manufacturing jobs has led to a decline of overall job availability?

            1. rhamson profile image77
              rhamsonposted 3 years ago in reply to this

              It is a combination of both but not in conjunction with each other. That is a startling thing as you would expect the decline in population growth to affect job availability. But the massive exodus of jobs due to NAFTA and now the TPP have steadily eroded the job market.

              1. My Esoteric profile image89
                My Esotericposted 3 years ago in reply to this

                The problem is @Rhamson, the labor force has increased from 104.9 (64% of those eligible to work; like housewifes and housedads who choose not to work outside the home) million in 1979 to 155.5 (63%) million in 2013.  Are these the numbers you are thinking of or have I missed the mark?

                Those eligible to work, which is a proportion of population growth, has grown from 164.9 million to 245.7 million over the same period.

                1. rhamson profile image77
                  rhamsonposted 3 years ago in reply to this

                  Eligibility is a funny benchmark on which to base your numbers. One being that "eligibility" is a subjective term. To mix eligibility requires that all households who have two working spouses should be working while childcare and the types of jobs that would merely pay for the childcare is a wash. So if one chooses to have the other spouse work who can bring more income and save on the childcare is that computed into your calculations? How about those that are disabled but require government assistance to pay for their disability and having a job would greatly impact their benefits or losing their entire check to pay for the healthcare and also be a wash? The other thing to consider is what types of jobs are being considered available? Are they fast food as I know several people employed at two or three of these jobs to make at least a livable income? So many variables are not taken into an "eligible" label to determine how much of an increase of jobs there have been.

                  1. My Esoteric profile image89
                    My Esotericposted 3 years ago in reply to this

                    "Eligible" is my term for the Bureau of Labor Statistics "Civilian noninstitutional population: Persons 16 years of age and older residing in the 50 states and the District of Columbia, who are not inmates of institutions (e.g., penal and mental facilities, homes for the aged), and who are not on active duty in the Armed Forces."; it is shorter to write, in my opinion.

                    From that population comes the "Civilian Labor Force" (which I called "labor force") is defined as "All persons in the civilian noninstitutional population classified as either employed or unemployed."

                    The calculations are simple and straight-forward and do not involve any of the complexities you brought up.  Your point was that population and the workforce has declined over time (unless I misunderstood you), my point is that population and workforce has increased over time.

        2. GA Anderson profile image82
          GA Andersonposted 3 years ago in reply to this

          Yes, I knew I did not get the intent of your statement about the 38% right - it was satire and I was playing.

          But I do think I got it right that your inference was a condemnation of our current capitalistic system.

          And since I have not put in the research that you have, (ie. your hubs on the topic), I am just "shooting from the hip" with reaction based on perceptions formed by past observations and discussions.

          I think rhamson's response is leading in the right direction. I think the "old" middle class was composed of a majority of folks that produced something - either via physical labor, (factory and production workers), or management of physical labor and business activities, (managers, supervisors, foremen). The world is changing, The workforce needs have changed, (and continue to change), and our economy has changed.

          This is not a new thing. History shows us it is a cycle seen many times before. Grunt labor to mechanically assisted labor to mechanically achieved labor. Each step reduces the needed number of workers. So the workforce changes directions, finds new needs, or shrinks - or all the above.

          History also shows us corruption and money buying privilege has also been with us from the beginning. In human activity it is a constant - not cyclic.

          What I think has changed is that this time the mechanical and technological changes of the cycle are more acute than any past changes.

          Our economy has and is continuing to move away from a manufacturing and producing economy to a service economy. Less physical work and physical bodies are needed. Both reductions hit the middle class more than any other segment.

          What to do, what to do....

          GA

      2. My Esoteric profile image89
        My Esotericposted 3 years ago in reply to this

        Of course I was being sarcastic again with the 38% comment.  The point of that comment is that it isn't only the wealthy who create growth in this country, it is everybody who works and is productive.  As such, anybody who contributes to growth ought to share in that growth roughly equally for if any one part fails to be productive, then there is no growth.

        As to the value of the work that is performed, the theory is that wages and bonuses an employee receives is equal to the contribution they make to a firms success and the profit the firm makes is the reward for the owners investment.  Now you know and I know that is only theory.  The only employees who get paid their worth are generally those who fall to those who are mobile and can switch jobs if needed.  For those who are locked into their jobs, they are often paid less than what they are worth while those the run the company use that money (at least in the last few decades) to pay themselves "rent" wages, which are wages over and above the wages that represent value they actually add to the company's bottom-line.

        That is one example of how the game is rigged; being rewarded for success is not considered rigging the game by anyone I know, nor is being fairly rewarded for the risk you take.  But discrimination, race or gender, is.  Unfair labor practices are.  Anti-competition practices are.  I hope you really don't believe these and a myriad of other methods don't go on in this country in a very big way, especially as the regulations designed to prevent them are gutted or repealed.

        As to who to blame, you blame both for their total lack of morals. 

        And about your satire, it all depends on what kind of country you want to live in.  One that was somewhat equitable although highly racist in the 50's, 60s, and 70s or one more like the 1870s when there were no taxes, people lived in company towns, you had a small wealthy class, a small middle class and a huge lower class.  The 1870s model is the logical end result of the tax system you seem to favor because mathematically, it can end up no other way under unregulated capitalism.  You have, to a large degree the kind of flat tax system where the effective tax rate of everybody, except those near the poverty line, is around 17% when all is said and done; so what is happening, we are moving quickly to the 1870s scenario of a small upper class and a very large lower class with not much in the middle.

        1. GA Anderson profile image82
          GA Andersonposted 3 years ago in reply to this

          Your response shows that we have different perspectives that probably preclude either of us agreeing with the other. Or else maybe we are in semi-agreement and just talking past each other because we see different culprits *shrug*

          "...As such, anybody who contributes to growth ought to share in that growth roughly equally for if any one part fails to be productive, then there is no growth."

          Roughly equal to whom? Their co-worker peers? The company owners?

          For simplicity, let's use a company as an example; Owner risks life savings to start the venture. A key-employee in sales risks health and family harmony working a grueling schedule -18 hour days, to make the sales that make the company successful. A diligent salaried shipping dept. mgr. keeps the product flowing to the customers. Several packers earning above minimum wage do a good job preparing the product for shipping. And a minimum wage janitor keeps the trash cans empty and the floors swept.

          Here's what I see as an equitable sharing of the rewards of contributing to the increased productivity, (financial success), of the company.

          The janitor continues to earn his minimum wage - because that is all the job is worth, regardless of the success of the company.

          The packers continue to earn their above minimum wage rate - because they are doing the job they were hired for and paid to do. They are paid above minimum wage because the owner sees the value of their job as being worth more than minimum wage. Although, a nice Christmas, or "I appreciate your good work" bonus would be beneficial to both the owner and the packers. This is not an unheard of practice.

          The shipping mgr. would probably get a raise or a bonus. His job is the most crucial to the success of the company - of those discussed so far.

          The sales guy would have earned a rewarding amount of commissions, and probably some new company perks - new office, car, trip, etc. etc. - but his commissions are his real reward because that is the way his productivity compensation was established between he and his employer.

          The owner reaps the rest as his reward for the initial risk.

          I would also include the caveat that a smart owner would "spread the wealth" a little to key employees because he is successful because of them.

          That example seems like a fair, if simplistic,  description of the components of a company/economy. Yet there is no "roughly equal" benefits of success.

          How do you see that crew sharing equally the success of the company, the benefits of their productivity?

          If an employee is "locked" into a position, wouldn't the reason for being locked in have a bearing on their compensation? And why do you state they automatically get paid less than what they are worth?

          Of course my "rigged" was a tongue-in-cheek inference to geared-for.

          "... But discrimination, race or gender, is.  Unfair labor practices are.  Anti-competition practices are."

          Now where the hell did that enter the conversation as being part of the rigged system you spoke of? Are we to consider illegalities as "unfair rigging" now, or as the law-breaking acts they are?

          "I hope you really don't believe these and a myriad of other methods don't go on in this country in a very big way, especially as the regulations designed to prevent them are gutted or repealed.

          OK, just one soup per bowl please. You initially spoke of our system as being rigged for the rich, and now you are lumping illegal acts in with ones that you think are "just unfair."

          As for the "gutted regulations".... ahem... wasn't that my point about bought politicians and purchased special favors?

          "As to who to blame, you blame both for their total lack of morals. "

          Was that a generic "you" or a me specifically "you?" And who is the both that I/we are blaming? If it is the monied interests and the bought politicians - I blame the bought politicians more.

          "...or one more like the 1870s when there were no taxes,

          Geez Louise! Now you want to bring the 1870s into the conversation? And how do you know what tax system I prefer? I also hope your "flat" reference was to flat as in one-size-fits-all, because if you are referring the the frequently proposed "Flat Tax" system, then you either misspoke, or are ill-informed.

          Do you really consider our current capitalistic system as unregulated - as you stated, or just under regulated - in your view?

          It is good talking with you again, but you really should be less jumpy with the assumptions about what I think or prefer. sometimes you get the bull, sometimes you get the horns.

          GA

          1. My Esoteric profile image89
            My Esotericposted 3 years ago in reply to this

            Equal as in back to my original 3% growth translates into roughly 3% increase in median/mean income for the top four quintiles.

            All of those other things you mention are theoretically taken care of by paying people a wage equal to their contribution to the company's success, no more, no less.  Those who risk their life savings get a return on investment equal to the degree of risk assumed.

            That is the way it is supposed to work in the perfect world.  In the real world, those at the top get paid more than there contribution, those at the bottom get paid less than their contribution.  Large corporations often receive a larger ROI than the risk assumed while small firms, like mine, receive smaller ROI's (at least for my partner's) than the risk they assumed.

            1. wilderness profile image96
              wildernessposted 3 years ago in reply to this

              Twice as many cars are made, raising GDP by 3%.

              Why are the janitors entitled to more pay for doing the same job they were doing?  Because more cars are made? 

              Doesn't make sense to me.

            2. GA Anderson profile image82
              GA Andersonposted 3 years ago in reply to this

              OK, so it is a difference in perspectives. My world does not see the logic of percentage of growth as having any bearing on "fairness" - relative to this topic.

              But just for kicks... how do you determine the relative payoffs of those you mentioned?  How do you peg their contribution? Their compensation? Surely you are not advocating an ROI pegged to GDP increase percentages? Risk your life savings or a company's future, or your reputation for 3%, (or whatever the percentage)?

              If GDP is a negative, do wage earners, (those that don't lose their jobs), lose a percentage of their hourly wage? The owners will probably lose a portion of the value of their risked investment. Is it "fair" that they alone should suffer a loss?

              A corp. will probably lose sales which in most cases will mean reduced profits, which also in most cases will mean a drop in stock price, which will also probably mean a loss of income to shareholders - so is it "only fair" that the wage earners of that corp. also lose a proportionate share of their hourly wage?

              Bottom line, for "fairness," do wage earners take the same reduction hit that the risk takers suffer?

              And why do you feel there should be ROI parity between large and small companies/corps?

              GA

              1. My Esoteric profile image89
                My Esotericposted 3 years ago in reply to this

                To your Bottom Line question, just a quick glance at the results of the Great Recession of 2008 should answer that question; wage earners took orders of magnitude greater reductions than the risk takers suffered.  A few hundred non-financial businesses went BK, yet over nine million Americans lost their jobs.  The long-term wealthy took a one-year decline in their income while everybody else was stuck with a five-year decline.

                When things go south in a business, the managers and owners take a hit in their income at worst, or see the growth slow down for awhile, but the general labor force sees a total loss of their income as they are laid off; yeah, I would say they lose more than a proportionate share of their hourly wage, assuming you consider 100% a lot.

                If GDP goes negative, you betcha wage earners take a big hit, median income declines as they get laid off.  Wage earners get a 100% loss while owners and managers may only get 50%.

                Nope, ROI and GDP are disconnected.  But tell me why this example should be the case.  Assume the following:

                GDP = $1 trillion

                Total Payroll = GDI = $1 trillion broken out as follows:
                - Top 20% = $700 billion
                - 2nd 20% = $125 billion
                - 3rd 20% = $75 billion
                - 4th 20% = $60 billion
                - Bottom 20% = $40 billion

                Now if GDP grew at 3% or $30 billion, then payroll probably grew around 3% as well since GDP = GDI (Gross Domestic Income).  That means payroll grew $30 billion as well.

                What I am suggesting is that total payroll, at the end of the day and assuming the bottom 20% gets a 3% growth as well (to keep the math simple) should look like this:

                Total Payroll = GDI = $1 trillion + $.03 trillion = $1.03 trillion broken out as follows:
                - Top 20% = $700 billion + $21 billion = $721 billion
                - 2nd 20% = $125 billion + $3.75 billion = $128.8 billion
                - 3rd 20% = $75 billion + $2.25 billion = $77.25 billion
                - 4th 20% = $60 billion + $1.8 billion = $61.8 billion
                - Bottom 20% = $40 billion + $1.2 billion = $41.2 billion

                What you suggest would be just fine and perfectly fair is as follows:

                Total Payroll = GDI = $1 trillion + $.03 trillion = $1.03 trillion broken out as follows:
                - Top 20% = $700 billion + $30 billion = $730 billion
                - 2nd 20% = $125 billion
                - 3rd 20% = $75 billion
                - 4th 20% = $60 billion
                - Bottom 20% = $40 billion

                Somehow, that doesn't seem "fair" to me; it may to you, but it doesn't to me.

                1. GA Anderson profile image82
                  GA Andersonposted 3 years ago in reply to this

                  You certainly provide a lot to chew on... and I hope you won't think my editing is to obscure your context.

                  These were relative to my response about a negative GDP... (I think)

                  ".....results of the Great Recession of 2008 should answer that question; wage earners took orders of magnitude greater reductions than the risk takers suffered.

                  .........the long-term wealthy took a one-year decline in their income while everybody else was stuck with a five-year decline.

                  ......the managers and owners take a hit in their income at worst, or see the growth slow down for awhile, but the general labor force sees a total loss of their income as they are laid off;

                  .....you betcha wage earners take a big hit, median income declines as they get laid off.  Wage earners get a 100% loss while owners and managers may only get 50%.


                  Of course it may just be me, but it does appear you have a bias against folks with money or businesses.

                  Is it the long term wealthy's fault that their financial situation allows them to rebound quicker? Obviously I don't think so.

                  An owner provides multiple jobs, pick a number 1o 1000. If he loses the business, all the jobs are lost too. If he takes a "hit" to income, (profit), is it hard to understand he cannot afford to pay for all those same jobs now? Are the lay-offs his fault?

                  It sounds like you think if a janitor, or a manager lose their jobs - then the job providers should lose theirs too. What is that, an eye for an eye? Justice?

                  "If GDP goes negative, you betcha wage earners take a big hit, median income declines as they get laid off.  Wage earners get a 100% loss while owners and managers may only get 50%"

                  Damn, life just isn't fair is it. Without applying any tint of malfeasance in your explanation, it sounds like you are lamenting that a manager that has worked for years to improve their job skills and lot in life, (or the owner that risks their life's investment - yes, I know that is simplistic) doesn't suffer the same financial effects on their life as your fifth quintile, (the janitors and minimum wagers)

                  To your example, and I think the folks in my first example will fit your quintiles nicely for this illustration;:

                  "What you suggest would be just fine and perfectly fair is as follows: "*that means me

                  "Total Payroll = GDI = $1 trillion + $.03 trillion = $1.03 trillion broken out as follows:
                  - Top 20% = $700 billion + $30 billion = $730 billion
                  - 2nd 20% = $125 billion
                  - 3rd 20% = $75 billion
                  - 4th 20% = $60 billion
                  - Bottom 20% = $40 billion"


                  From the bottom 20%; The janitor in my example
                  These would be entry-level, or minimum wage earners - people without valuable or improved job skills - generally, (of course there will be exceptions), doing jobs that only provide minimum wage-type value. Without an improvement that makes their labor more valuable, worth more, why should it be considered unfair if they do not receive an income increase comparable to the coming examples that do offer more value?

                  The 4th level 20% - the product packers
                  These folks are above the bottom 20%, they have more valuable job skills, and they earn more. Although they may, (and frequently do), receive something more - even if it is a token amount or perk, if they have provided no additional value, or have not improved their job skills, (if they do they will migrate up to the next higher quintile potential - to manager or supervisor), why do you think them to be entitled to an increase in income? They are being paid for what they hired to do. If they do nothing to improve their value, (yes, their work is valuable, and they are hired, agreed to, and are being paid that value), is "just because it's only fair" a valid reason to insist on parity?

                  3rd, 2nd, and top, again generally speaking, are where the job skills or personal abilities are more valuable, where their efforts have more of an impact on the company's success or failure, and where the people in them are more financially stable. I think they would see a piece of that 3% increase. So - you can see where I am going with this. While I agree there are inequities - some through corrupt influence, (I am back to the purchased politicians), but most are just because, "that's life." It's not unfair. It just is.

                  And that is where our perspectives differ - you appear to think share and share alike is the only fair way to look at things, the only fair method of compensation. Obviously I don't. I think value is the fair way to determine compensation. So if GDP increase 3%, yet an earner's value has stayed the same, their contribution has stayed the same - it appears you think it is only fair they get the same 3% increase just because they are still there.

                  Of course I realize you are speaking to the macro level, and my example and explanations are of a micro level - but I think that realistically both should be a reflection of the other - so I am talking about the same apples you are.

                  On the other hand... if you wanted to direct your observations and evaluations and sense of "fairness" at specific guilty parties, (plenty of targets in the financial markets and rich-people circles), and not at the general groupings of "The Rich" or "Big Business" - then you will hear quite a different tune from me.

                  But as for an equal distribution of a percentage "Just because it is fair" - that is not something I think is "fair."

                  GA

  2. Average American profile image59
    Average Americanposted 3 years ago

    I have read this stream and have enjoyed the give and take very much. I would offer one concern that I did not see addressed...I have heard from several places that 10,000 baby boomers are retiring every day for the next 10-15 years. My first thought on this was the utter colapse of the SSI system. There were 64 Americans working for every 1 who got a check when SSI started, this number is closer to 3/1 now. My other thought was that 300,000 jobs should be opening up each month for the conceivable future and that alone should cause an incredible decline in both the unemployment rate and the long term, no longer reported, unemployment rate. Seems to me any President in office should in the very near future, appear to be a genious when it comes to job growth. It can't be that all these open jobs are being eliminated through attrition can it?

    As these are retirees that are leaving the work force, retirees who historically are not in a buying mode of their life (they often times have their homes paid for or their finances structured to where a mortgage is about all they have, not a lot of lavish buying going on) it is young people taking those jobs (the same jobs that don't seem to show up on any new job reports mind you) who are buying first homes, better cars, financing everything they get. This should be showing up in economic growth reports but it is not...

    My point is that this will not be job creation but job replacement but either way it should reduce these numbers in unemployment and increase economic growth regardless of who is in the White House. It should also start a new migration of economic mobility as people start careers.

    Could this ebb and flow of life cycles now produce a new 1950's style movement of both income and mobility?10,000 a day is a huge number and a heck of a lot of financial change...

    I believe we will continue to see the top money makers increase the gap but I also believe that comparatively, we will see a second 1950's style economic boom and I hope we do as 1/5th of the nation will be of SSI age by 2050. The size og the gap isn't as important so long as those in the middle are gaining ground as well in my mind.

    1. GA Anderson profile image82
      GA Andersonposted 3 years ago in reply to this

      That seems a logical progression, but my first thoughts are that I don't think the logic works in this case.

      Following your premise that the baby boomers are leaving the workforce; think of the point from which they are leaving - probably from the middle to upper rungs of the career ladder. And these jobs are probably much more likely to be filled by their juniors moving up, if they are filled at all. Think of why companies have early retirement plans...

      Leaving whatever new jobs available being those at the bottom - entry level, or even minimum wage level. Not the impact to the shrinking middle class My Esoteric spoke of.

      Plus, the baby boomer retirement wave would have started around 2001 - 2005, and the jobs picture is what it is, Sooooo....

      GA

    2. My Esoteric profile image89
      My Esotericposted 3 years ago in reply to this

      @Average American.  I am guessing you saw that headline from Newsmax.  The problem is, that is the only place they mention it.  If you read the article, they contradict it as does the Pew Research study it was based on; http://www.pewresearch.org/daily-number … rs-retire/

      What is true is 10,000 BBs will reach retirement age a day, but only about 40% of those may actually retire; the rest either don't want to (like me) or can't afford to.

      As to economic mobility, that depends on opportunity, and in your scenario, that is certainly possible but it all depends if the benefits of economic growth are distributed to those who created it or kept by those who control the power and wealth.

  3. JohnfrmCleveland profile image82
    JohnfrmClevelandposted 3 years ago

    GA wrote:  "This is not a new thing. History shows us it is a cycle seen many times before. Grunt labor to mechanically assisted labor to mechanically achieved labor. Each step reduces the needed number of workers. So the workforce changes directions, finds new needs, or shrinks - or all the above."

    I don't think there is a historical precedent for what we are (beginning) to see today.  In the past, there has always been a shortage of labor, even as the industrial revolution changed the makeup of that labor.  That is no longer true today, at least in advanced economies.

    Once that demand for labor is gone, it renders our current method of distributing wealth unfair.  And that method is capitalism, the give and take between ownership and labor.  The bottom is falling out, and it's bringing the wages of the middle class down with it.  Without a sufficient demand for labor, capitalism devolves into a system of "sultans and fanners." 

    Europe's middle class is overtaking ours because Europeans are not so caught up in the mentality that considers every interference by government to be creeping socialism, and hence a bad thing.  It's going to take some government interference, probably a lot of it, to keep any semblance of a middle class intact, because there isn't much of a mechanism built into capitalism that will do it anymore.

    1. GA Anderson profile image82
      GA Andersonposted 3 years ago in reply to this

      Today must be my "shooting from the hip" day, since I don't think the above quote is correct, but without knowing how you mean it it to apply, I can't be sure.

      Always a shortage of labor... During wartime yes, the labor was occupied elsewhere. During economic boom times, yes, plenty of jobs to go around...

      But what about the times of; depression, recession, "normal" gradual economic growth - where is the labor shortage there?

      Wasn't  the Industrial Revolution an economic boom time for jobs, (putting aside the discussion of the "Robber Baron" inequities)? so of course there would have been a labor shortage. And yes I certainly agree that time frame changed the makeup of labor.

      Or are you saying there was always a shortage of qualified labor?

      How does advanced economics change the labor discussion?

      As for the historical precedent part - well, as proof of the cyclic nature of the problem I still think if you look at America's economic history - the proof is in the pudding - labor shortages during boom times, labor surplus during the busts.

      But if you are speaking of the severity of the challenge to the labor situation, I agree. I don't think the American worker has ever been faced with a future jobs prospect that we have agreed looks to be likely. Just less need for labor... period.

      GA

      1. My Esoteric profile image89
        My Esotericposted 3 years ago in reply to this

        @GA, I would offer that during the bust period, the reason there is a labor surplus is because there was a job deficit caused by the bust..

        On the other hand, I might argue that during the Industrial Revolution there was a surplus of labor.  I say that for two reasons.  1) that was the period of urbanization, when everyone was leaving the farm and moving to the city and 2) firms weren't competing for labor, they were able to name their own subsistence wages.

        1. GA Anderson profile image82
          GA Andersonposted 3 years ago in reply to this

          Ok, so "shortage" means different things?

          And to your latter... there was no shortage because folks were flocking to the jobs? Well, normally it is rude, but I really don't mean it to be... it's just the simplest response... Duh!

          I hope you noticed that I did offer the caveat that the "Robber Baron" practices were a different topic from the "shortage" discussion. Even though you seem to want to combine them to add to the negativity of the situation as you stated it originally.

          GA

          1. My Esoteric profile image89
            My Esotericposted 3 years ago in reply to this

            No, I caught the Robber Baron exception, but they weren't the only ones who were guilty of the abuse of labor in those days.  Having said that, even though few in number, they monopolized various major industries and therefore controlled a sizable portion of the labor force.  But even without them, manufacturing was having its heyday making money hand-over-fist because they could and did pay labor next to nothing.

  4. junko profile image63
    junkoposted 3 years ago

    The middleclass has raised the underclass percentage to 47% more or less from 37% more or less before Globle Capitalism. Before  Unregulated Capitalism was allowed to go globle there was a middle class in America. That was when most anything worth having, was made in America not China

    1. junko profile image63
      junkoposted 3 years ago in reply to this

      The lack of jobs makes the middle class poor. Job creation and higher wages will raise the poverty level of the middle class.

 
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