The Middle Class is Going to Hell in a Handbasket

The consumer economy of the early 20th century was propelled by Henry Ford’s novel notion that workers should have high enough wages to buy his cars. High wage-high productivity defined the early century, but as regulations increased to control the power of corporations, their profits began to dwindle. Then came a switch to an economy marked by low wages-high debt. Real wages have been falling since 1979. The Federal Reserve’s survey of Consume Finances notes in each report since 1983 that the median amount of debt for each family has been rising.

Michael Snyder of the Business Insider has also found 22 statistics that indicate the middle class is eroding in America:

83 percent of all U.S. stocks are in the hands of 1 percent of the people.

61 percent of Americans “always or usually” live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.

66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.

36 percent of Americans say that they don’t contribute anything to retirement savings.

A staggering 43 percent of Americans have less than $10,000 saved up for retirement.

24% of American workers say that they have postponed their planned retirement age in the past year.

Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.

Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.

For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.

In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.

As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.

The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.

Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.

In the United States, the average federal worker now earns 60% as much as the average worker in the private sector.

The top 1% of U.S. households own nearly twice as much of America’s corporate wealth as they did just 15 years ago.

In America today, the average time needed to find a job has risen to a record 35.2 weeks.

More than 40% of Americans who actually are employed are now working in service jobs, which are often very low paying.

For the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.

This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.

Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.

Approximately 21 percent of all children in the United States are living below the poverty line in 2010 – the highest rate in 20 years.

The top 10% of Americans now earn around 50% of our national income

If the middle class is disappearing, where will the rich get their money? All that debt has a lot of interest to tag along with it that trickles right up to them, while the rest of America is stuck in indentured servitude to this low wage-high debt model.

[youtube]http://www.youtube.com/watch?v=Joo90ZWrUkU[/youtube]

Saad

Enrolled at the University of California, San Diego, Saad is pursuing a degree in Political Science. He has written multiple articles for the College Democrats' newspaper on campus, The Left Coast Post. Recently, he circulated petitions for the California Democracy Act initiative. His interests include national and international politics along with economic issues. 

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  5 comments for “The Middle Class is Going to Hell in a Handbasket

  1. July 16, 2010 at 12:16 pm

    Therefore:
    The plan for economic recovery:
    http://www.larouchepac.com/laroucheplan

    The 10 minute introduction video
    http://www.larouchepac.com/node/12891

    If not this then what is your plan?

  2. lefty
    July 17, 2010 at 11:04 am

    Saad,

    Exactly right & well said!

    Thank you.

  3. Cynthia Ward
    July 19, 2010 at 7:29 am

    So is this truly a problem of the greedy profiteers not paying adequate wages? Or is it a lack of personal responsibility from the middle class? I say this while including myself, while my family earns like the middle class, we like the spiff of the upper middle class, and therefore we do not save as much as we should. I see it all around me, peoplewho complain about not having enough savings, while leasing a car rather than driving the used one a few more years. We are the generation that sucked our equity to go on vacation, and that is not the responsibility of big business, that was our own mistake. Yes, there are situations, primarily in service industries, where lower wages create the need for affordable housing that we all underwrite, but in large part the issues you list here are not related so much to the workers being bled dry by the greedy business community, but in the workers themselves (again, myself included) failing to recognize a need to live within our means and budget accordingly. It is time for us to give up the vaulted ceiling and great room, and live in that mid-century tract house that needs a little work, in an effort to save for our own retirements, rather than waiting for Big Brother to take care of us in a time of need.

  4. Dan Chmielewski
    July 19, 2010 at 8:54 am

    Thomas Hartman’s book “Screwed” is a must read on this subject

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