Posts tagged wages
The State Causes the Poverty It Later Claims to Solve
If one looks at the current paper money system and its negative social and social-political effects, the question must arise: where are the protests by the supporters and protectors of social justice? Why don’t we hear calls to protest from politicians and social commentators, from the heads of social welfare agencies and leading religious leaders, who all promote the general welfare as their mission?
Presumably, the answer is that many have only a weak understanding of the role of money in an economy with a division of labor, and for that reason, the consequences of today’s paper money system are being widely overlooked.
The current system of fractional reserve banking and central banking stands in stark opposition to a market economy monetary regime in which the market participants could decide themselves, without state pressure or coercion, what money they want to use, and in which it would not be possible for anyone to expand the money supply because they simply choose to do so.
The expansion of the money supply, made possible through central banks and fractional reserve banking, is in reality what allows inflation, and thus, declining income in real terms. In The Theory of Money and Credit Ludwig von Mises wrote:
The most important of the causes of a diminution in the value of money of which we have to take account is an increase in the stock of money while the demand for it remains the same, or falls off, or, if it increases, at least increases less than the stock. … A lower subjective valuation of money is then passed on from person to person because those who come into possession of an additional quantity of money are inclined to consent to pay higher prices than before.
When there are price increases caused by an expansion of the money supply, the prices of various goods and services do not rise to the same degree, and do not rise at the same time. Mises explains the effects:
While the process is under way, some people enjoy the benefit of higher prices for the goods or services they sell, while the prices of the things they buy have not yet risen or have not risen to the same extent. On the other hand, there are people who are in the unhappy situation of selling commodities and services whose prices have not yet risen or not in the same degree as the prices of the goods they must buy for their daily consumption.
Indeed, in the case of the price of a worker’s labor (i.e., his or her wages) increasing at a slower rate than the price of bread or rent, we see how this shift in the relationship between income and assets can impoverish many workers and consumers.
An inflationary money supply can cause impoverishment and income inequality in a variety of ways:
1. The Cantillon Effect
The uneven distribution of price inflation is known as the Cantillon effect. Those who receive the newly created money first (primarily the state and the banks, but also some large companies) are the beneficiaries of easy money. They can make purchases with the new money at goods prices that are still unchanged. Those who obtain the newly created money only later, or do not receive any of it, are harmed (wage-earners and salaried employees, retirees). They can only buy goods at prices which have, in the meantime, risen.
2. Asset Price Inflation
Investors with greater assets can better spread their investments and assets and are thus in a position to invest in tangible assets such as stocks, real estate, and precious metals. When the prices of those assets rise due to an expansion of the money supply, the holders of those assets may benefit as their assets gain in value. Those holding assets become more wealthy while people with fewer assets or no assets either profit little or cannot profit at all from the price increases.
3. The Credit Market Amplifies the Effects
The effects of asset price inflation can be amplified by the credit market. Those who have a higher income can carry higher credit in contrast to those with lower income, by acquiring real estate, for example, or other assets. If real estate prices rise due to an expansion of the money supply, they may profit from those price increases and the gap between rich and poor grows even faster.
4. Boom and Bust Cycles Create Unemployment
The direct cause of unemployment is the inflexibility of the labor market, caused by state interference and labor union pressures. An indirect cause of unemployment is the expansion of the paper money supply, which can lead to illusory economic booms that in turn lead to malinvestment. Especially in inflexible labor markets, when these malinvestments become evident in a down economy, it ultimately leads to higher and more lasting unemployment that is often most severely felt among the lowest-income households.
The State Continues to Expand
Once the gap in income distribution and asset distribution has been opened, the supporters and protectors of social justice will more and more speak out, not knowing (or not saying) that it is the state itself with its monopolistic monetary system that is responsible for the conditions described.
It’s a perfidious “business model” in which the state creates social inequality through its monopolistic monetary system, splits society into poor and rich, and makes people dependent on welfare. It then intervenes in a regulatory and distributive manner, in order to justify its existence. The economist Roland Baader observed:
The political caste must prove its right to exist, by doing something. However, because everything it does, it does much worse, it has to constantly carry out reforms, i.e., it has to do something, because it did something already. It would not have to do something, had it not already done something. If only one knew what one could do to stop it from doing things.
The state even exploits the uncertainty in the population about the true reasons for the growing gap in income and asset distribution. For example, The Fourth Poverty and Wealth Report of the German Federal Government states that since 2002, there has been a clear majority among the German people in favor of carrying out measures to reduce differences in income.
The reigning paper money system is at the center of the growing income inequality and expanding poverty rates we find in many countries today. Nevertheless, states continue to grow in power in the name of taming the market system that has supposedly caused the impoverishment actually caused by the state and its allies.
If those who claim to speak for social justice do nothing to protest this, their silence can only have two possible reasons. They either don’t understand how our monetary system functions, in which case, they should do their research and learn about it; or they do understand it and are cynically ignoring a major source of poverty because they may in fact be benefiting from the paper money system themselves.
About the Author
Andreas Marquart is executive director of the Ludwig von Mises Institute Germany. He has been an independent financial consultant for more than 15 years and is a proponent of the Austrian School of economics. See Andreas Marquart’s article archives.
Image credit: https://mises.org
37 Reasons Why “The Economic Recovery Of 2013″ Is A Giant Lie
“If you repeat a lie often enough, people will believe it.” Sadly, that appears to be the approach that the Obama administration and the mainstream media are taking with the U.S. economy. They seem to believe that if they just keep telling the American people over and over that things are getting better, eventually the American people will believe that it is actually true. On Friday, it was announced that the unemployment rate had fallen to “7 percent”, and the mainstream media responded with a mix of euphoria and jubilation. For example, one USA Today article declared that “with today’s jobs report, one really can say that our long national post-financial crisis nightmare is over.” But is that actually the truth? As you will see below, if you assume that the labor force participation rate in the U.S. is at the long-term average, the unemployment rate in the United States would actually be 11.5 percent instead of 7 percent. There has been absolutely no employment recovery. The percentage of Americans that are actually working has stayed between 58 and 59 percent for 51 months in a row. But most Americans don’t understand these things and they just take whatever the mainstream media tells them as the truth.
And of course the reality of the matter is that we should have seen some sort of an economic recovery by now. Those running our system have literally been mortgaging the future in a desperate attempt to try to pump up our economic numbers. The federal government has been on the greatest debt binge in U.S. history and the Federal Reserve has been printing money like crazed lunatics. All of that “stimulus” should have had some positive short-term effects on the economy.
Sadly, all of those “emergency measures” do not appear to have done much at all. The percentage of Americans that have a job has stayed remarkably flat since the end of 2009, median household income has fallen for five years in a row, and the rate of homeownership in the United States has fallen for eight years in a row. Anyone that claims that the U.S. economy is experiencing a “recovery” is simply not telling the truth. The following are 37 reasons why “the economic recovery of 2013″ is a giant lie…
#1 The only reason that the official unemployment rate has been declining over the past couple of years is that the federal government has been pretending that millions upon millions of unemployed Americans no longer want a job and have “left the labor force”. As Zero Hedge recently demonstrated, if the labor force participation rate returned to the long-term average of 65.8 percent, the official unemployment rate in the United States would actually be 11.5 percent instead of 7 percent.
#2 The percentage of Americans that are actually working is much lower than it used to be. In November 2000, 64.3 percent of all working age Americans had a job. When Barack Obama first entered the White House, 60.6 percent of all working age Americans had a job. Today, only 58.6 percent of all working age Americans have a job. In fact, as you can see from the chart posted below, there has been absolutely no “employment recovery” since the depths of the last recession…
#3 The employment-population ratio has now been under 59 percent for 51 months in a row.
#4 There are 1,148,000 fewer Americans working today than there was in November 2006. Meanwhile, our population has grown by more than 16 million people during that time frame.
#5 The “inactivity rate” for men in their prime working years (25 to 54) has just hit a brand new all-time record high. Does this look like an “economic recovery” to you?…
#6 The number of working age Americans without a job has increased by a total of 27 million since the year 2000.
#9 Only about 47 percent of all adults in America have a full-time job at this point.
#10 The ratio of wages to corporate profits in the United States just hit a brand new all-time low.
#11 It is hard to believe, but in America today one out of every ten jobs is now filled by a temp agency.
#12 Approximately one out of every four part-time workers in America is living below the poverty line.
#13 In this economic environment, there is intense competition even for the lowest paying jobs. Wal-Mart recently opened up two new stores in Washington D.C., and more than 23,000 people applied for just 600 positions. That means that only about 2.6 percent of the applicants were ultimately hired. In comparison, Harvard offers admission to 6.1 percent of their applicants.
#14 According to the Social Security Administration, 40 percent of all U.S. workers make less than $20,000 a year.
#15 When Barack Obama took office, the average duration of unemployment in this country was 19.8 weeks. Today, it is 37.2 weeks.
#16 According to the New York Times, long-term unemployment in America is up by 213 percent since 2007.
#17 Thanks to Obama administration policies which are systematically killing off small businesses in the United States, the percentage of self-employed Americans is at an all-time low today.
Bush Sr.: 11.3
Bush Jr.: 10.8
#19 According to the U.S. Census Bureau, median household income in the United States has fallen for five years in a row.
#20 The rate of homeownership in the United States has fallen for eight years in a row.
#21 Back in 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 54.9 percent of all Americans are covered by employment-based health insurance, and thanks to Obamacare millions more Americans are now losing their health insurance plans.
#23 Total consumer credit has risen by a whopping 22 percent over the past three years.
#24 In 2008, the total amount of student loan debt in this country was sitting at about 440 billion dollars. Today, it has shot up to approximately a trillion dollars.
#25 Under Barack Obama, the velocity of money (a very important indicator of economic health) has plunged to a post-World War II low.
#26 Back in the year 2000, our trade deficit with China was 83 billion dollars. In 2008, our trade deficit with China was 268 billion dollars. Last year, it was 315 billion dollars. That was the largest trade deficit that one nation has had with another nation in world history.
#27 The gap between the rich and the poor in the United States is at an all-time record high.
#28 Right now, 1.2 million students that attend public schools in the United States are homeless. That is a brand new all-time record high, and that number has risen by 72 percent since the start of the last recession.
#29 When Barack Obama first entered the White House, there were about 32 million Americans on food stamps. Today, there are more than 47 million Americans on food stamps.
#30 Right now, approximately one out of every five households in the United States is on food stamps.
#31 According to the Survey of Income and Program Participation conducted by the U.S. Census, well over 100 million Americans are enrolled in at least one welfare program run by the federal government.
#32 In 2000, the U.S. government spent 199 billion dollars on Medicaid. In 2008, the U.S. government spent 338 billion dollars on Medicaid. In 2012, the U.S. government spent 417 billion dollars on Medicaid, and now Obamacare is going to add tens of millions more Americans to the Medicaid rolls.
#33 In 2000, the U.S. government spent 219 billion dollars on Medicare. In 2008, the U.S. government spent 462 billion dollars on Medicare. In 2012, the U.S. government spent 560 billion dollars on Medicare, and that number is expected to absolutely skyrocket in the years ahead as the Baby Boomers retire.
#34 According to the most recent numbers from the U.S. Census Bureau, an all-time record high 49.2 percent of all Americans are receiving benefits from at least one government program.
#35 The U.S. government has spent an astounding 3.7 trillion dollars on welfare programs over the past five years.
#37 The U.S. national debt is on pace to more than double during the eight years of the Obama administration. In other words, under Barack Obama the U.S. government will accumulate more debt than it did under all of the other presidents in U.S. history combined.
Fortunately, it appears that most Americans are not buying into the propaganda. According to a new CNN survey, the percentage of Americans that believe that the economy is getting worse far exceeds the percentage of Americans that believe that the economy is improving…
Americans views on the state of the nation are turning increasingly sour, according to a new national poll.
And a CNN/ORC International survey released Friday also indicates that less than a quarter of the public says that economic conditions are improving, while nearly four in ten say the nation’s economy is getting worse.
Forty-one percent of those questioned in the poll say things are going well in the country today, down nine percentage points from April, and the lowest that number has been in CNN polling since February 2012. Fifty-nine percent say things are going badly, up nine points from April.
So what do you think?
Do you believe that the U.S. economy is getting better or getting worse?
This article first appeared here at the Economic Collapse Blog. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.
Image credit: http://theeconomiccollapseblog.com
Wow – The Holiday Shopping Season Is Off To A Horrible Start
According to the National Retail Federation, Americans spent an average of 4 percent less over the four day Thanksgiving weekend than they did last year. Overall, that means that approximately $1.7 billion less was spent at U.S. retailers compared to last year. It had already been projected that this holiday shopping season would be the worst for retailers since 2009, but if these numbers are any indication it may be even worse than expected. So why is this happening? Well, basically the American consumer is tapped out. The unemployment crisis in this country is actually getting worse, poverty is absolutely exploding and the middle class is being systematically eviscerated. In other words, you can’t get blood out of a stone. Many retailers are offering extreme discounts in a desperate attempt to lure more shoppers, but the money simply isn’t there.
According to Yahoo News, the decline in shopping over the four day Thanksgiving weekend was the first decline that we have seen since the last recession…
Shoppers, on average, were expected to spend $407.02 during the four days, down 3.9 percent from last year. That would be the first decline since the 2009 holiday shopping season when the economy was just coming out of the recession.
The survey underscores the challenges stores have faced since the recession began in late 2007. Retailers had to offer deeper discounts to get people to shop during the downturn, but Americans still expect those “70 percent off” signs now during the recovery.
And according to the New York Times, Americans spent a total of 1.7 billion dollars less than they did last year…
Over the course of the weekend, consumers spent about $1.7 billion less on holiday shopping than they did the year before, according to the National Retail Federation, a retail trade organization.
“There are some economic challenges that many Americans still face,” said Matthew Shay, the chief executive of the retail federation. “So in general terms, many are intending to be a little bit more conservative with their budgets.”
But this downturn for retailers did not just begin this past weekend. There have been signs of trouble for quite a while now.
For example, posted below is a photo that one of my readers sent to me. This is a photo of the Beverly Center Mall in Beverly Hills, California that was taken in the middle of the day on Tuesday, November 19th. She said that there “wasn’t a soul in that mall and the employees were all standing, staring into space with nothing to do”…
So where are all of the shoppers?
Why aren’t people out buying stuff?
Sadly, this is just the continuation of a trend that has been developing for more than a decade. The truth is that Americans are simply not spending money as rapidly as they used to.
Posted below is a chart that shows that the velocity of M2 in the United States is at an all-time low. In other words, the rate at which money circulates through our economy is frighteningly low and it continues to drop…
As you can see from the chart above, this decline in the velocity of money has been going on since the late 1990s. This is a sign of a very unhealthy economy.
Most Americans know that the U.S. economy is very heavily dependent on consumer spending. But consumers have to make money first in order to spend it. And right now we have a major employment crisis in this country.
Meanwhile, the quality of our jobs continues to decline as well. According to the U.S. Census Bureau, median household income in the United States has fallen for five years in a row, and right now the middle class is taking home a smaller share of the overall income pie than has ever been recorded before.
So should it really be such a surprise that consumers are totally tapped out?
The money simply is not there.
After accounting for inflation, 40 percent of all U.S. workers are currently making less than what a full-time minimum wage worker made back in 1968.
A recent CNN article profiled one of these workers. Carman Iverson is a 28-year-old mother of four that makes minimum wage at McDonald’s. If it was not for government assistance, her and her four children would not be able to survive…
Iverson said she started working in 2012 at $7.25 an hour, and makes $7.35 an hour now after Missouri adjusted the minimum wage. She makes between $400 and $600 a month. Her rent is $650 a month.
When asked how she could pay her rent on those wages, she said she had a landlord who works with her. “I’m kind of on my last little leg, because I’ve been late on rent. I’m actually behind three months in rent.
“Sometimes I can pay it, sometimes I can’t. I get paid twice a month, and both checks go to rent and the rest of it goes to utilities to the point where I don’t have any money left to buy anything for my kids — to buy them clothes, shoes or anything they need.”
She said she manages to feed her four children on $543 worth of food stamps a month.
But instead of fixing things, Barack Obama continues to pursue policies that will kill millions more good jobs. It is absolutely amazing that there are any Americans that still support this guy. For a long list of statistics that show how badly the economy has tanked since Obama entered the White House, please see this article.
You know that things are bad when increasing the number of Americans on food stamps by 15 million is regarded as an “economic accomplishment”. In fact, a message recently posted on the official White House website says that “SNAP is boosting the economy right now” and that high food stamp enrollment is creating lots of jobs…
“SNAP’s effect extends beyond the food on a family’s table–to the grocery stores, truck drivers, warehouses, processing plants and farmers that helped get it there.”
So why don’t we just enroll all Americans in every welfare program?
Wouldn’t that produce an extreme economic boom?
And actually under Obama we are already well on our way. According to the U.S. Census Bureau, 49.2 percent of all Americans are currently receiving benefits from at least one government program, and the federal government has spent an astounding 3.7 trillion dollars on welfare programs over the past five years.
Yes, there will always be poor people that cannot help themselves that will need our assistance.
But most Americans are capable of working if they could just find jobs.
Unfortunately, our jobs are being killed off and wages are going down. The middle class is being systematically destroyed and U.S. consumer spending is drying up.
The horrible start to this holiday shopping season is just the beginning.
Things are going to get much worse than this.
This article first appeared here at the Economic Collapse Blog. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.
Image credit: http://theeconomiccollapseblog.com
40 Percent Of U.S. Workers Make Less Than What A Full-Time Minimum Wage Worker Made In 1968
Are American workers paid enough? That is a topic that is endlessly debated all across this great land of ours. Unfortunately, what pretty much everyone can agree on is that American workers are not making as much as they used to after you account for inflation. Back in 1968, the minimum wage in the United States was $1.60 an hour. That sounds very small, but after you account for inflation a very different picture emerges. Using the inflation calculator that the Bureau of Labor Statistics provides, $1.60 in 1968 is equivalent to $10.74 today. And of course the official government inflation numbers have been heavily manipulated to make inflation look much lower than it actually is, so the number for today should actually be substantially higher than $10.74, but for purposes of this article we will use $10.74. If you were to work a full-time job at $10.74 an hour for a full year (with two weeks off for vacation), you would make about $21,480 for the year. That isn’t a lot of money, but according to the Social Security Administration, 40.28% of all workers make less than $20,000 a year in America today. So that means that more than 40 percent of all U.S. workers actually make less than what a full-time minimum wage worker made back in 1968. That is how far we have fallen.
The other day I wrote an article which discussed the transition that we are witnessing in our economy right now. Good paying full-time jobs are disappearing, and they are being replaced by low paying part-time jobs. So far this year, 76.7 percent of the jobs that have been “created” in the U.S. economy have been part-time jobs.
That would be depressing enough, but what makes it worse is that wages for many of these low paying jobs have actually been declining over the past decade even as the cost of living keeps going up. The following is from a recent USA Today article…
In the years between 2002 and 2012, real median wages dropped by at least 5% in five of the top 10 low-wage jobs, including food preparers and housekeepers.
So where have the good jobs gone?
Well, there are three long-term trends that are absolutely crushing American workers right now.
First of all, thanks to our very foolish politicians American workers have been merged into a global labor pool where they must directly compete for jobs with workers on the other side of the planet that live in countries where it is legal to pay slave labor wages. This has resulted in millions upon millions of good jobs leaving this country. Big corporations can pad their profits by taking a job from an American worker making $15 an hour with benefits and giving it to a worker on the other side of the globe that is willing to work for less than a dollar an hour with no benefits. Our politicians could do something about this, but they refuse to do so. Most of them are absolutely married to the idea of a one world economic system that will unite the globe. Unfortunately, the U.S. economy is going to continue to lose tens of thousands of businesses and millions upon millions of jobs to this one world economic system.
Secondly, big corporations are replacing as many expensive workers with machines, computers and robots as they possibly can. As technology continues to advance at a blistering pace, the need for workers (especially low-skilled workers) will continue to decrease. Unfortunately, the jobs that are being lost to technology are not coming back any time soon.
Thirdly, the overall U.S. economy has been steadily declining for more than a decade. If you doubt this, just read this article. As our economy continues to get weaker, the lack of jobs is going to become a bigger and bigger problem.
And as our economy systematically loses good jobs, more Americans are forced to become dependent on the government.
Back in 1979, there was about one American on food stamps for every manufacturing job. Today, there are about four Americans on food stamps for every manufacturing job.
When I first found that statistic I was absolutely stunned. How in the world can anyone out there deny that the U.S. economy is collapsing?
But as I mentioned above, it isn’t just that the number of jobs is not what it should be. The quality of our jobs is declining as well. For example, one study found that between 1969 and 2009 the wages earned by American men between the ages of 30 and 50 declined by 27 percent after you account for inflation.
That is a pretty stunning decline. And it has only accelerated in recent years. Median household income (adjusted for inflation) has fallen by 7.8 percent since the year 2000, and the ratio of wages and salaries to GDP in the United States is near an all-time record low.
Most Americans are finding that their bills just keep going up but their paychecks are not. This is causing the middle class to wither away, and most families are just trying to survive from month to month at this point. In fact, according to one recent survey 76 percent of all Americans are living paycheck to paycheck.
So where do we go from here?
Image credit: http://theeconomiccollapseblog.com
Posted by Robert Wenzel
The BIG Squeeze of the American Wage Earner
(Charts via ZeroHedge)
Posted by Judy Morris
Meet the Big Banks’ Latest Slave Product: “Payroll Debit Cards”
I firmly believe that the biggest domestic policy error over the past generation has been the no-strings-attached bail out of the mega banks in these United States, and their subsequent designation as “too big to fail” and “too big to jail.” This has given the sociopaths that run these crony organizations a license to steal, and they are doing a great job of it.
So in the latest bank theft product, employers of low income workers are being persuaded to pay their employees via “prepaid payroll cards.” Not only are these cards typically associated with high fees, but they also discourage employees from using credit unions for their banking needs.
While companies try to defend themselves by saying they are providing a cheaper method for employees that do not have bank accounts to gain access to their funds, in many cases using these “prepaid cards” isn’t simply an option, but a requirement. Oh, and take a guess why the mega banks are pushing into this line of business? Prepaid cards are essentially exempt from financial regulation. Serfs up boy and girls. From the New York Times:
A growing number of American workers are confronting a frustrating predicament on payday: to get their wages, they must first pay a fee.
For these largely hourly workers, paper paychecks and even direct deposit have been replaced by prepaid cards issued by their employers.
These fees can take such a big bite out of paychecks that some employees end up making less than the minimum wage once the charges are taken into account, according to interviews with consumer lawyers, employees, and state and federal regulators.
Devonte Yates, 21, who earns $7.25 an hour working a drive-through station at a McDonald’s in Milwaukee, says he spends $40 to $50 a month on fees associated with his JPMorgan Chase payroll card.
Anyone surprised that “the morgue” is at the center of this?
Read the rest at A Lightning War for Liberty, here.
10 Amazing Charts That Demonstrate The Slow, Agonizing Death Of The American Worker
The middle class American worker is in danger of becoming an endangered species. The politicians are not telling you the truth, and the mainstream media is certainly not telling you the truth, but the reality is that there is nothing but bad news on the horizon for workers in the United States. In the old days, when the big corporations that dominate our society did well, that also meant good things for American workers since those corporations would need more of us to work for them. But in the emerging one world economic system that our economy is being merged into, those corporations have other choices now. For instance, the big corporations can now choose to limit the number of “expensive” American workers that they employ by shipping millions of jobs to the other side of the world. And from their perspective, it makes perfect sense. They can make much bigger profits by hiring people on the other side of the planet to work for them for less than a dollar an hour. If they can get good production out of those people, then why should they hire Americans for ten to twenty times as much, plus have to give those Americans health insurance and other benefits?
Another major factor in the slow, agonizing death of the American worker is technology. We live during a period when technology is advancing at a pace that is almost unimaginable at the same time that it is steadily becoming cheaper and cheaper. That means that it is going to become easier and easier for companies to replace workers with robots and computers. As I have written about previously, it is being projected that our economy will lose millions of jobs to technology in the coming years. Yes, some of us will still be needed to help build the robots and the computers, but not all of us will. And of course the overall general weakness of the economy is not helping matters either. The American people inherited the greatest economic machine in the history of the world, and we have wrecked it. Decades of very foolish decisions have resulted in the period of steady economic decline that we are experiencing now.
America is simply not the economic powerhouse that it once was. Back in 2001, the U.S. economy accounted for 31.8 percent of global GDP. By 2011, the U.S. economy only accounted for 21.6 percent of global GDP. That is a collapse any way that you want to look at it.
Today, American workers are living in an economy that is rapidly declining, and their jobs are steadily being stolen by robots, computers and foreign workers that live in countries where it is legal to pay slave labor wages. Politicians from both political parties refuse to do anything to stop the bleeding because they think that the status quo is working just great.
So don’t expect things to get better any time soon.
The following are 10 amazing charts that demonstrate the slow, agonizing death of the American worker…
#1 Wages And Salaries As A Percentage Of GDP
As you can see, wages as a percentage of GDP are hovering near an all-time record low. That means that American workers are bringing home a smaller share of the economic pie than ever before.
#2 Average Annual Hours Worked Per Employed Person In The United States
We are an economy that is rapidly trading good paying full-time jobs for low paying part-time jobs. The decline in average annual hours worked that we have witnessed represents the equivalent of losing millions of jobs. There has been an explosion of “the working poor” in the United States, and this trend is probably only going to accelerate in the years to come.
#3 Manufacturing Employment
As you can see, there are less Americans working in manufacturing today than there was in 1950 even though the population of the country has more than doubled since then. The United States has lost more than 56,000 manufacturing facilities since 2001, and yet our politicians stand around and do nothing about it.
#4 Employment-Population Ratio
This is one of my favorite charts. It shows that there has been absolutely no employment recovery at all since the end of the last recession. The percentage of working age Americans that have a job has stayed under 59 percent for 44 months in a row. How much worse will things get when the next major economic downturn strikes?
#5 Labor Force Participation Rate
This is how the Obama administration is getting the “unemployment rate” to magically go down. They are pretending that millions upon millions of Americans simply do not want to work anymore. As you will notice, the decline of the labor force participation rate has accelerated greatly since Barack Obama entered the White House.
#6 Duration Of Unemployment
The average amount of time that it takes an unemployed worker to find a new job has declined slightly, but it is still far above normal historical levels. It is a crying shame that it takes the average unemployed worker two-thirds of a year to find a new job, but this is the new economic reality that we are all living in.
Here is a great talk given at The 21 Convention in 2012, by Doug McGuff, MD, a prominent member of the ancestral health (paleo-primal) community: “Fitness, Health, and Liberty.” Doug, an emergency room physician, is well known for his ‘Body By Science‘ program, a high-intensity interval training program.
This is an important presentation because Doug presents the historical picture on how the physician-patient relationship went from a fiduciary relationship between provider and consumer to a 3rd party morass of collectivized medicine that sacrificed individual services to the needs of the masses in general in order to conform to the rules outlined by the medical establishment-insurance industry alliance.
While it is easy to blame the Democrats or blame Obama for the nationalization of medical care, this system began to form many years ago under the auspices of self-serving medical practitioners who built alliances with the government-medical establishment in the pursuit of rent-seeking arrangements. Dr. McGuff notes that doctors, who had short-term gains in mind, ultimately sacrificed their profession to these pursuits and thus “set into motion the long-term unintended consequences that resulted in their ultimate enslavement.”
His discussion of the formation of the “Blues” plans to guarantee payment for services while receiving tax-exempt status in exchange for community ratings is spot on. Community ratings, that did not allow for discrimination based on individual health status, were the beginnings of socialized medicine and thus opened the door to moral hazard and the current system of pre-paid medical care that defies all the principles of personal accountability and the free market.
This presentation is 72 minutes, but it is worth every minute of your time. I work in this industry and can tell you that Dr. McGuff has presented the best short timeline I have seen on the topic of how 3rd-party insurance and government-business alliances came to destroy the U.S. health care system. Dr. McGuff is also a libertarian, as if you can’t tell by the presentation.
Once upon a time, anyone that was relatively competent and willing to work hard could go out and easily get a job that would enable that person to financially support a family. Unfortunately, that is simply no longer true anymore. Well paying “middle income jobs” are being rapidly replaced with “low income jobs” and part-time jobs. As the economy crumbles, it is becoming increasingly difficult for the typical American worker to survive from month to month. The number of companies that provide benefits such as health insurance has fallen steadily over the past ten years, and paychecks have not been keeping up with the rising prices of food and gas. Average American families are seeing their budgets squeezed like never before, and many of them are going into huge amounts of debt in order to make up the difference. Sadly, this is a problem that has developed over an extended period of time and that is not going to be reversed overnight. Over the past four decades, the ratio of wages and salaries to GDP in America has fallen dramatically. The typical American worker is not as valued as much as he or she used to be, and if current trends continue even more of us will be working part-time jobs or “low income jobs” in the years ahead.
In America today there is a great deal of focus on the unemployed, but there are also millions upon millions of Americans that are working part-time jobs because that is all that they can find.
It can be absolutely soul crushing to go all the way through school getting good grades, spend a ton of money on an education, and then work for 8 bucks an hour doing meaningless work for some predator corporation that simply does not care about how talented you are.
Today, an astounding 48 percent of all Americans are considered to be either “low income” or are living in poverty.
According to the New York Times, approximately 100 million Americans are either living in poverty or in “the fretful zone just above it”.
A lot of those people actually do have jobs. Unfortunately, a part-time job that pays 8 or 9 dollars an hour just will not get you anywhere close to getting over the poverty line.
This is not the way that the U.S. economy used to work. Back in the old days, good paying jobs that would allow you to live “the American Dream” were plentiful.
But now millions upon millions of Americans are scrambling for anything that they can get. According to a recent survey conducted by Gallup, the percentage of Americans that are working part-time jobs but that would like full-time jobs is now higher than it has been at any other time in the last two years.
In this economy, a good paying full-time job is incredibly precious. If you still have one, you should consider yourself to be very fortunate.
Check out the following chart. It is a chart that shows the level of wages and salaries as a percentage of GDP in the United States since the late 1940s. As you can see, the slice of the pie being taken home by American workers has been dropping like a rock since about 1970….
Is that a clear trend or what?
And it is going to continue year after year as long as we continue to pursue the same foolish economic policies.
As our politicians continue to allow millions of American jobs to be shipped overseas, competition for the jobs that remain inside this country is becoming extremely intense.
As you read this, there are hordes of hard working American workers sitting at home staring at their televisions as they wonder why nobody will hire them.
Right now, if you gathered together all of the unemployed people in the United States, they would constitute the 68th largest country in the world.
That is absolutely insane.
But even if you do have a job that does not mean that you are in good shape. The percentage of “low income jobs” just continues to climb. 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.
Many Americans work as hard as they can and still find that they must turn to the government for financial assistance. According to author Paul Osterman, about 20 percent of all U.S. adults are currently working jobs that pay poverty-level wages.
And that number is just going to keep climbing unless we change what we are doing as a nation.