The Middle Class Is Worse Off Than You Think

[Purveyor]

Apr 10, 2015 7:00 AM EDT
By Mark Whitehouse

If you worry about the declining fortunes of the U.S. middle class, take heed: It might be worse than you realized.

Tracking the middle class can be difficult, because the group is hard to define. Typically, researchers look at households with incomes or net worth in the middle of the entire population. This approach, though, might provide a falsely rosy picture. It doesn’t, for example, capture the fates of families that start out in the middle and -- due to a job loss or other setback -- end up in the bottom.

Two economists at the Federal Reserve Bank of St. Louis -- William Emmons and Bryan Noeth -- sought to address this shortcoming by focusing on households' demographic characteristics, rather than income or wealth. Specifically, they looked at families whose breadwinner was at least 40 years old and had achieved a level of education that would typically allow a middle-class standard of living. Whites and Asians needed exactly a high-school diploma to qualify. For blacks and Hispanics, it took a two-year or four-year college degree -- a stark recognition of persistent racial inequality.

The results are not pretty. As of 2013, this group's median annual income stood at about $45,000, down 16 percent in inflation-adjusted terms from 1989, with a big part of the drop occurring since 2001. Over the same period, a more commonly used measure of the middle class's fortunes -- the median income for all families -- declined just 1 percent. Here's how that looks:


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More...

http://www.bloombergview.com/articles/2015-04-10/the-u-s-middle-class-poorer-than-you-think

[merrily]

1. Sorry. If you ended up at the bottom, you are not "middle class" anymore and

no one mentions you, especially if you are not among the "working poor," who do get the occasional nod esp in discussions about WalMart and/or the minimum wage.


(For those who cannot tell, the above is the direct opposite of how I feel.)

[blkmusclmachine]

2. ,

,

[truedelphi]

3. forty nine cents out of every dollar of profit generated inside the USA goes directly

To the top financial institutions, usually banks, but you can include Big Health Insurers in that category as well.

Back in the much maligned days of Ron Reagan, that figure was eight cents out of every dollar.

Both parties are stripping the middle class of everything they have. Voters are angry, and in my county in Northern Calif., they are not going to bother to vote.

[appalachiablue]

4. Incredibly injust & awful. The stats, wow. From RR to now-

The US Middle Class, the largest the world has ever seen slipped to No. 2 last year for the first time. Canada is No. 1 now. Saw this in a brief NYT article in 2013 and not much in other media. Some people I know don't want to hear or believe it. Like the fact that half of the earth's animals disappeared in 40 years from 1970-2013, in only two news reports last year. Bill Maher mentioned it to little response.

[truedelphi]

5. In many ways, Canada is run much more sensibly than we are.

For one thing, anyone who wishes to emigrate from another nation and become a Canadian citizen must be willing to learn either English or French - none of this "The people of your country need to learn my language!"

And although many folks calling themselves "progressives" deplore what happened under Reagan, during his tenure, the fact remains that under Ron Reagan, we took only baby steps toward the total fascist-ization of the economy.

In fact, back in the late 1980's, when the Savings and Loan Scandal hit, the Federal Government followed sensible guidelines in which local banks were allowed to have a newly issued state charter, and then they could receive Federal monies, but those Federal monies had to be loaned out to the people who were involved in Main Street.

But by 1990 the hand writing was on the wall. Rich Democrats running companies paid their workers as little as those who worked at companies run by rich Republicans. People of both party affiliations would eagerly seek bankruptcy status for a company they had inherited from their parents -- and then offer themselves the lucrative Golden Parachutes' payments to "reward" themselves for their service to that now defunct company. These Golden Parachutes came at the expense of the workers' pension plans - which were raided to pay off the debts of the "failing" companies.

Among the last major activities of the Clinton Presidency was Bill Clinton signing off on the Bank and Financial Institution's Modernization Act - an act that broke down the barrier between financial insurance and financial trading. Only a single solitary Senator voted against this Act 0- that was Senator Dorgan, "D" of Nebraska who claimed that this one Act would destroy the protections of Glass Steagal, and would also soon lead to a steep implosion of the economy. Less than nine years later, this Senator was proven right!

With the 2008 economic implosion, the American people attempted to tell Congress that they did not want the major players on Wall Street to be bailed out. And they did manage to postpone the Bailouts of Wall Street for a few weeks. But at least 80% of Congressional members cared about only Wall Street. And these Congressional members responded to Wall Street firms' lobbyists with far more enthusiasm than the millions of phone calls, emails, faxes and letters that the American people utilized to try to stop this madness of rewarding the top financial firms for the collapse they caused!

And in 2008, every single major presidential candidate, including Hillary Clinton, Barack Obama and John McCain, were so deeply entrenched with Wall Street interests that the American people's sensible notions of NOT handing our economy over to the Big Financial Players went unheeded.

People voted for Obama across party lines, as he was an unknown and his final rally on his late October presidential campaign in Wisconsin included many strong remarks about regulating Wall Street. But once elected, Obama immediately decided that Geithner would be the best person for the job at Treasury - this despite the fact that Geithner's actions while he headed the NY Federal Reserve deserved a RICO conviction!

Now we have a nation in which in every industry there is room only for the top two or three companies of any type. Congress rewards the top companies such that the small businesses must pay for the ability of the top firms to have to pay little and sometimes ZERO for government services, while we pay an increased price for those services. And to top it off, the top companies then pay NOTHING in taxes. (As a person who is a small publisher, my husband and I pay a steep price for the fact that Amazon gets discounted services through the US Postal Service. And so we cannot afford to have books bought directly by us, through our website, as Amazon can offer free shipping, for our books while we would have to insist on at least a half postage price paid by the consumer. So most consumers by through Amazon. then Amazon gives us only 40% of the profits we would otherwise make. Such is the "gifts" bestowed on our economy by the Lobbyists Rule Over Corporate (Friggin' Fascist) Amerika! And this US Postal Service deal with Amazon was brought about directly through Congressional actions in Spring of 2007 - the first few months when Congress had a clear and strong Democratic majority!)

[appalachiablue]

6. What Reagan & Co. started went wild in the Roaring 90s, buy-partisan as you say. The rule by

banks, esp. Goldman alums for 25 years is criminal. There's a special place in purgatory for corps. like Amazon with their monopolistic control of so much media and strong anti-union management. Bezos the Texas libertarian recently bought the Washington Post for a song, one the many vaunted New Gilded Age Tech Barons. I'm encouraging a couple beautiful young family millennials to consider Canada, even with Harper's imitating RR over the oil boom it can't be as bad as matters seem here, sorry to say and unless and until there's change...Lol.

[Bill USA]

7. very interesting statistic. Do you have a source, or link, so we can check it out in more detail?

[truedelphi]

8. The first fact you need toa ccept is that the Bank Bailouts

Were NOT some 700 billions of dollars, but closer to 4 trillions of dollars.

http://www.nbcnews.com/id/32010841/ns/business-us_business#.VS2ZYvDW1oc

Although the Obama Administration set up HAMP as a program to offer relief and help to those whose mortgages were underwater, only 2 to 5% of all distressed homeowners were able to get help from that 50 billion dollar program.


Enriched beyond belief from the trillions offered as Bailouts, the banks usually sat on a large percentage of those trillions of dollars. And the new bubble in the economy, from mid 2009 on, was the "bank flipping' in which large financial firms bought out other banks


As far as the actual citation, I am forgetting if I read the "48 cents out of every dollar" statistic from something that Neal Barofsky said or wrote, or something that Autorank, a once very active DU member stated, or else maybe Max Keiser. (Or possibly something Octafish wrote, also a DU member.) Don't have the time today to read through so many files on my Hard drive to find it.

On edit - there is a wonderful satirical thing from The New Yorker that I gleaned from the same Max Keiser article that contained the MSNBC link. It is good wholesome fun to read about how the poor bankers at the top were so stifled in their spending after the 2008 Economic Collapse. Why the poor dears had to had to stop injecting gold into their veins!

link is here: http://www.thepeoplesvoice.org/TPV3/Voices.php/2009/07/23/goldman-sachs-is-criminal-scum-max-keise
####

[Bill USA]

9. I was not questioning your veracity. I really did want to look into it. I am aware that the bank

bailouts were costly. And they were offensive to me as well. I prefer to quote the cost of the entire Trickle Down Disaster (which was the banking industry's fault, in that they were ones who fought regulation of financial derivatives and knowingly sold CDOs composed of fraudulently rated mortgages and more (to come later)) at $22 Trillion (Financial Crisis Cost Tops $22 Trillion, GAO Says ).

[truedelphi]

10. I am still trying to find the actual citation.

When you figure, using your numbers, that the Big Banks and Big Financial firms got 22 trillion in two years, and meanwhile our economy had slowed down to thirteen trillion annually, they were getting amounts equivalent to 85% of the whole economy, that is really scarey.

Most people do not realize that the Big Banks often are lending out monies only to themselves (I am a small business person, and it is nigh impossible to get a loan for a business unless you have some "in family connection," or else go on Shark tank and get one of the Sharks to invest!)

So they loan out the money only to themselves and then do deals no normal citizen can think of doing. I mean, we have some 150,000 plus subscribers here on DU - how many of us have put together an offer to buy up another Big Bank?

I am basically making these remarks as a way to continue the conversation later this week. It is way past my bed time right now.

[Doctor_J]

11. actually it's just about like I think. And it will continue to get worse as long as Jamie dimon

and his class own the government

[midnight]

12. kick

[Purveyor]

13. Thanks for 'kicking'. It is good to know that the articles I post are read even though there is

not much discussion on the topic.

That is it what it is all about for me...