Saturday, October 26, 2019

The Vanishing Middle Class

We are told constantly that the U.S. economy is booming; that we are witnessing one of the most robust economies in recent memories. We're told that thousands of former U.S. jobs which had shipped overseas are finally coming back home. From the reports, Americans should be giddy from all the growth. But we're not. In fact, most Americans are barely making it.

As most of us know (or should know), the Middle Class, which has been the backbone of this country since its founding, has been under an incessant attack for almost four decades. According to a recent report from the U.S. Social Security Administration, nearly 50% of the Middle Class earns less than $33,000. That works out to be $2,750---before taxes.

To break it down further, 46% of Americans earn under $30,000. 58% make under $40,000, and 67% bring in less than $50,000. But the statistic of real importance is this--- 44% struggle to pay their bills. After taxes, many American routinely have to choose between which bill to pay now and being able to buy groceries or other essentials such as clothes, school supplies, car repairs, etc. As an aside, the poverty level for a family of four is $25,750. That means the half of America is living on the financial edge. Nearly a quarter of all Americans receive welfare benefits while 49% receive at least some form of regular monthly government assistance.

Meanwhile, senior corporate officers are seeing their salaries and benefit packages blossom. Their salaries have increased 937% since 1978, giving them an average salary of $15.6 million dollars; faster growth than the stock market according to the Economic Policy Institute. That's approximately 30 times the salary of an average employee (union or non-union). Meanwhile, adjusted for inflation, the average worker has seen their pay increase by only 11.2% over the same period. I know being a president or CEO isn't for the fainthearted, but that's outrageous.

There are those who say "get a better job" or "go back to school". Well, despite the growth in the number of jobs, the pay is often fairly low while benefits are no longer a given as they once were. As for going back to school, most individuals can't afford to either take the time off to beef up their academic credentials or afford the overinflated costs of higher education. We're heard countless stories of individuals graduating from college with a debt that will take decades to pay off. Of course, in all fairness, there are those who graduate with practically worthless degrees who may never be able to pay off the school debt.

I would be remiss not to point out that while the majority of new jobs are on the lower end of the pay scale, there is an abundance of vocational or trade vocations in desperate need of being filled. In addition, they pay very well (many over $50,000 annually) and often include those ever increasingly rare benefits. I'm talking about plumbers, electricians, carpenters, welders, HVAC mechanics, stone and brick masons, and so forth.

For some reason we've allowed ourselves to be convinced that every job should require a college degree. They don't. What they require is high school graduates being able to perform at a higher than eighth grade level; individuals who can read, write, do basic math and have critical thinking skills. Since the 1960's, we've seen the quality of public education repeatedly dumbed down so as not to "offend" anyone or make them feel "bad" about themselves. As a result, students across the board have been forced to suffer. But, nevertheless, it reinforces the point that not everyone is college material.

Meanwhile, we have created a society ever dependent on service oriented jobs, which are, again, typically low paying. Individuals in the fast food business have been clamoring for $15 an hour pay; claiming they can't support a family with their current wage. No doubt that's true, but then again, fast food jobs were intended to be "starter" jobs. Employment for those just getting starting in the job market like high school students. Aside from manager positions, they weren't intended to be jobs to supporting families.

In addition, automation has taken many of the typical production jobs which were once the domain of the well paid blue collar Middle Class. Add to this the high number of illegal immigrants who are employed in many entry level and service jobs. As a rule, these are generally low paying work with few or any benefits requiring very low skills (even fluent English isn't always a requirement). Again, that speaks to both what's available and the quality of applicants.

We also have to consider the government. We are constantly seeing politicians and bureaucrats pushing for higher taxes, not to mention more and higher fees and rates on everything from water and sewers to electricity to property tax. Of course, they rarely miss an opportunity to raise their own salaries, but that's for another time. Meanwhile, they are doing their best to regulate anything and everything for the obvious purpose of finding new income streams to sink their greedy little hands into.

Regulation has become so bad that the average "mom and pop" business, the traditional economic backbone of this country and its largest private employer, can't afford to stay in business. This is especially true when you consider that the large mega corporations are usually propped up with tax breaks and taxpayer backed incentives, plus they can afford the best accountants, lawyers, and politicians money can buy.

As readers of Another Opinion already know, America is an Oligarchy. These ultra rich corporations and individuals literally own both major political parties as well as their politicians and top level bureaucrats. They "help" write key pieces of legislation and then use their financial influence to see to it that it's passed. The average small business person can't afford to hire a lobbyist, leaving them with very little power over their own existence.

So what do we do? This is a problem which has as many potential answers as it does problems. First, we have to accept that America cannot survive with half of its population literally living from paycheck to paycheck year after year. Right now the average American family is carrying about $38,000 in personal debt (not including student loans). Millennials and Gen Z between 18 and 24 already have an average debt of $22,000. Older Millennials, those between 25 and 34, are in debt to the tune of $42,000 while Gen X and Babyboomers have a debt of between $36,000 and $39,000.

If we add to that the fact that 40% of Americans can't come up with $400 to cover an emergency, we have a pretty bleak picture. Also bear in mind that the average American family has just under $5000 in their savings account; 58% have less than $1000, with a substantial number having no savings account at all. Sooner or later "something" is going to happen economically and "someone" is going to get the Old Maid. When that happens, the whole house of cards is coming down, and with it, the whole economy.

While many argue that we need to increase (almost perpetually) the minimum wage, the problem is that usually increases prices (after all, "someone" is going to have to absorb the increase and that "someone" is almost always the consumer). Perhaps it's time to abandon the concept of a minimum wage and let the marketplace decide. Those who won't pay a livable wage will be forced to adjust or go out of business.

Secondly, we need to cut regulations on small businesses and make it easier for them operate. The biggest stumbling block, aside from government regulation, has been in the area of benefits; especially insurance, which is why I like the idea of a single payer form of insurance where everyone is provided with a basic package and then given the opportunity to purchase additional insurance as their needs change (those making under a certain minimum income could receive either an income credit or discounted rate). It would at least be a starting point. We also need to encourage personal savings by eliminating taxes on accounts under $100,000.

We also need to stop underwriting mega corporations with taxpayer dollars. They are quite capable of taking care of themselves financially thank you. I suggest that a minimum income tax be imposed. The fact that Exxon, Chase, Apple and other global corporations pay zero income tax has to stop. Along those same lines, we must overturn the colossal "Citizens United" mistake by the Supreme Court.

This fiasco declared that corporations were "people" with the same rights as you and I, especially "free speech" which the court equated with money with the exception that corporations can give unlimited amounts while us mere mortals are still capped as to what we can donate. Corporations should be unable to donate money or provide support to any political party or candidate.

Equally, any contact between a government official and a corporate lobbyist should be public. No lobbyist should have input on any piece of legislation other than from an official request in the form of a public hearing open to all. Former public employees should also be required to wait seven years before accepting any position which brings them in contact with a government agency.

All tax, fee, and rate proposals must obtain public approval before being implemented. No more "nickel and dime" increases. This includes salaries for elected officials. Along with this is the need for term limits. This would go a long way to ending corruption and bringing fresh ideas to government. I propose a 12 year term---six 2 year terms for representatives, two 6 terms for senators, three 4 year terms for the executive branch as well as federal judges and the Supreme Court. We also must end partisan gerrymandering of districts. This does nothing more than keep incumbents in power. Districts must be balanced in order to reflect the residents, not the party.

Lastly, we must instill discipline back into the schools. School is about education, not babysitting and surely not tolerating violent students attacking or bullying other students or teachers. Expelling them only gives them what they want. Instead, they should be sent to "bootcamp" schools where discipline is enforced. Emphasis should remain focused on academics, not sports or other extracurricular activities.

Students must be taught history as well as civics. They need to know their collective roots and responsibilities as Americans. Students should be periodically tested to see where their interests and potential abilities might lead them, and then encouraged in that direction. Sex education should be focused on basic biology, not on being gay or transgendered or whatever.

America is more divided as a country right than at any time since the decade preceding the Civil War. Not only are politics more divisive than ever, but the divisiveness is even fanned by the corporate controlled media. The same goes with how we treat one another. We've become all about what we want when we want it without regard for others. A act of compassion or kindness is almost so rare as to make the news it seems. Where has our sense of respect and civility gone?

If we fail to save the Middle Class (or what's left of it), America will truly become a two tier society; a nation of haves and have not (we're pretty close to that already). There are parts of this nation which are now almost indistinguishable from third world countries. We fall in the lower half of most official rankings in health, happiness, freedom, education while ranking at or near the top in incarceration, crime, poverty, and violence.

We've already lost our Republic to the Oligarchy, leaving us with an illusion of control. We must retake our country, and in doing so restore not just our Middle Class. We must not ask for permission to reclaim our country and its way of life. We must demand it.

Goodbye Middle Class: 50% Of American Workers Make Less Than $33,000 A Year

CEOs make $15.6 million on average---here's how much their pay has increased compared to yours over the year

Good paying blue collar jobs go unfilled in tight labor market

Here's how much debt American have at every age

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