If you were laid off from your job, would you be willing to train your replacement if your company threatened to take away your severance pay if you didn’t do it? And how would you feel if your replacement came from India, and the only reason your company was replacing you was because the foreign worker was a lot less expensive? Sadly, this is happening all over America – especially in the information technology field. Huge corporations such as Disney and Southern California Edison are coldly firing existing tech workers and filling those jobs with much cheaper foreign replacements. They are doing this by blatantly abusing the H-1B temporary worker visa program. Workers that had been doing a solid job for decades are being replaced without any hesitation just because it will save those firms a little bit of money. There is very, very little loyalty left in corporate America today. Even if you have poured your heart and your soul into your company for years, that ultimately means very little. The moment that your usefulness is over, most firms will replace you in a heartbeat these days.
When I learned that Disney was doing this, I was absolutely outraged. Talk about a company that is going down the toilet. The following comes from the New York Times…
While families rode the Seven Dwarfs Mine Train and searched for Nemo on clamobiles in the theme parks, these workers monitored computers in industrial buildings nearby, making sure millions of Walt Disney World ticket sales, store purchases and hotel reservations went through without a hitch. Some were performing so well that they thought they had been called in for bonuses.
Instead, about 250 Disney employees were told in late October that they would be laid off. Many of their jobs were transferred to immigrants on temporary visas for highly skilled technical workers, who were brought in by an outsourcing firm based in India. Over the next three months, some Disney employees were required to train their replacements to do the jobs they had lost.
“I just couldn’t believe they could fly people in to sit at our desks and take over our jobs exactly,” said one former worker, an American in his 40s who remains unemployed since his last day at Disney on Jan. 30. “It was so humiliating to train somebody else to take over your job. I still can’t grasp it.”
Honestly, I don’t think that I could do it.
I don’t think that I could train my much cheaper foreign replacement.
But if you are the average American that is just barely scraping by from paycheck to paycheck, I guess complete and total humiliation is better than losing your home to foreclosure.
Out on the west coast, Southern California Edison did the exact same thing that Disney did. The following is an excerpt from a Fox News report…
Anonymous workers who were displaced by the visa holders also submitted written testimonials to lawmakers detailing their firings. Several claimed they were forced to train their replacements, and threatened with losing their severance if they did not.
“We had no choice in this,” one anonymous worker who claimed to have been one of those let go from Southern California Edison, said in a letter. The worker described how when the two vendors were picked – Infosys and TCS, both major Indian companies – SCE employees were told to “sit with, video chat or do whatever was needed to teach them our systems.”
If they did not cooperate, according to the testimonial, “we would be fired and not receive a severance package.”
That is wrong on so many levels. But this is what corporate America has become today – a cold, heartless place that has absolutely no empathy for the average worker.
These workers at Southern California Edison were even told that the firm “could replace one of us with three, four, or five Indian personnel” and still save money on the deal…
“They told us they could replace one of us with three, four, or five Indian personnel and still save money,” one laid-off Edison worker told me, recounting a group meeting with supervisors last year. “They said, ‘We can get four Indian guys for cheaper than the price of you.’ You could hear a pin drop in the room.”
The original intent of the H-1B temporary worker visa program was to allow U.S. companies to import foreign workers to do jobs that they were unable to fill with American workers.
But that is not what is happening.
Instead, the H-1B temporary worker visa program is being used to replace thousands upon thousands of well paid American workers.
It is a disgusting practice and it needs to stop. There has been so much outrage over this that it has even gotten the attention of the U.S. Senate. The following is from a letter that a bipartisan group of U.S. Senators sent to the Attorney General…
A number of U.S. employers, including some large, well-known, publicly-traded corporations, have reportedly laid off thousands of American workers and replaced them with H-1B visa holders. To add insult to injury, many of the replaced American employees report that they have been forced to train the foreign workers who are taking their jobs. This troubling practice seems to be particularly concentrated in the information technology (IT) sector, which is not surprising given that sixty five percent of H-1B petitions approved in FY 2014 were for workers in computer-related occupations. Though such reports of H-1B-driven layoffs have been circulating for years, their frequency seems to have increased dramatically in the past year alone.
So has anything been done about this?
Of course not.
Instead, Barack Obama is working on an extremely secretive global economic treaty which will reportedly allow far more foreign workers to come into this country and which will result in millions more good paying jobs being shipped overseas. It is called “The Trans-Pacific Partnership”, and it is basically NAFTA on steroids.
Why is it that Barack Obama has to be on the wrong side of every single issue?
The U.S. middle class is being systematically ripped to shreds, and most Americans are showing very little alarm about this.
How much damage has to be done before people will finally start waking up?
Barack Obama is secretly negotiating a global economic treaty which would destroy thousands of American businesses and millions of good paying American jobs. In other words, it would be the final nail in the coffin for America’s economic infrastructure. Obama knows that if the American people actually knew what was in this treaty that they would be screaming mad, so the negotiations are being done in secret. The only people that are allowed to look at the treaty are members of Congress, and even they are being banned from saying anything to the public. American workers are about to be brutally stabbed in the back, and thanks to all of this secrecy and paranoia they won’t even see it coming.
The name of this new treaty is “the Trans-Pacific Partnership”, and it is being touted as perhaps the most important trade agreement in history. But very few people in this country are talking about it, because none of us are allowed to see it. An article that was just released by Politico detailed the extreme secrecy that is surrounding this trade agreement…
If you want to hear the details of the Trans-Pacific Partnership trade deal the Obama administration is hoping to pass, you’ve got to be a member of Congress, and you’ve got to go to classified briefings and leave your staff and cellphone at the door.
If you’re a member who wants to read the text, you’ve got to go to a room in the basement of the Capitol Visitor Center and be handed it one section at a time, watched over as you read, and forced to hand over any notes you make before leaving.
And no matter what, you can’t discuss the details of what you’ve read.
This treaty is going to affect the lives of every man, woman and child living in this nation, and yet it is deemed so “important” that none of us can know what is in it?
Are you sure that we still live in a Republic?
This treaty will cover 40 percent of the global economy, and U.S. officials hope that the EU, China and India will become members eventually as well…
Right now, there are 12 countries that are part of the negotiations: the United States, Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. These nations have a combined population of 792 million people and account for an astounding 40 percent of the global economy. And it is hoped that the EU, China and India will eventually join as well. This is potentially the most dangerous economic treaty of our lifetimes, and yet there is very little political debate about it in this country.
If the EU, China and India did eventually join the treaty, that would essentially make it a trade agreement for the entire planet.
This is a really big deal, and it should be openly debated by the American people. But instead, Barack Obama has chosen to shroud the entire process with as much secrecy as possible. Not only that, he also wants Congress to give him fast track negotiating authority. If Congress does that, they would essentially be saying that they blindly trust Obama to negotiate a good treaty for us. At the end of the process, Congress would be able to vote the treaty up or down, but would not be able to amend it.
That sounds insane, right? Well, if you can believe it, Republicans in the Senate are quite eager to give Barack Obama this authority.
And this is not just an economic treaty. The following is an excerpt from one of my previous articles…
It is basically a gigantic end run around Congress. Thanks to leaks, we have learned that so many of the things that Obama has deeply wanted for years are in this treaty. If adopted, this treaty will fundamentally change our laws regarding Internet freedom, healthcare, copyright and patent protection, food safety, environmental standards, civil liberties and so much more. This treaty includes many of the rules that alarmed Internet activists so much when SOPA was being debated, it would essentially ban all “Buy American” laws, it would give Wall Street banks much more freedom to trade risky derivatives and it would force even more domestic manufacturing offshore.
We can’t consume our way to prosperity, and we can’t borrow and spend our way to prosperity. In order to be prosperous as a nation, we have got to create at least as much wealth as we consume. But instead, we are doing just the opposite. We are consuming wealth like mad even while our economic infrastructure is being absolutely gutted. We have lost thousands of businesses and millions of jobs already, and this new treaty will make things much worse.
And of course eventually even the ultra-cheap labor on the other side of the planet will be replaced. This is something that is already happening in China. Just today there was a news story about a new manufacturing facility in China that will use only robots…
Construction work has begun on the first factory in China’s manufacturing hub of Dongguan to use only robots for production, the official Xinhua news agency reported.
A total of 1,000 robots would be introduced at the factory initially, run by Shenzhen Evenwin Precision Technology Co, with the aim of reducing the current workforce of 1,800 by 90 percent to only about 200, Chen Xingqi, the chairman of the company’s board, was quoted as saying in the report.
The company did not give a figure for the investment in the factory, but said its production capacity could reach a value of 2 billion yuan (US$322 million) annually.
All of this is very bad news for American workers. Whether it is ultra-cheap labor on the other side of the globe or new technology, big corporations are constantly looking for ways to produce things less expensively.
But in order to have a middle class, we have got to have middle class jobs. The middle class in the United States is steadily disappearing, and neither political party seems very concerned about this at all.
Even without this new trade treaty, our trade deficit with the rest of the planet continues to grow even larger. We just learned that the monthly U.S. trade deficit for March rose to $51.4 billion. That was the largest monthly trade deficit since October 2008. If you will remember, in October 2008 we were experiencing the worst financial crisis since the days of the Great Depression.
And if you take oil out of the number, our trade deficit for the month of March would be the worst ever recorded.
Thank you Barack Obama. Your trade policies are really “working”.
Because the trade deficit was much worse than expected, that is going to push the GDP number for the first quarter into negative territory…
Greg Daco of Oxford Economics says he expects the wider than expected trade deficit to prompt the government to revise its estimate of 0.2% growth in U.S. gross domestic product for the first quarter to a 0.5% contraction.
That means that if we have another contraction in the second quarter, we will officially be in a recession.
In fact, we could be in a recession right now (according to the official government definition) and not even know it yet.
One of the biggest reasons why the U.S. economy has been struggling so much in recent years is due to our trade policies. If we had balanced trade with other nations, our cumulative economic growth since mid-2009 would have been nearly 20 percent higher…
Since rising trade balances subtract from economic growth, the increase in this real non-oil goods deficit has now cut cumulative U.S. economic growth after inflation by a stunning 19.49 percent since the recovery technically began in mid-2009.
Are you starting to see why I get so fired up about trade?
But instead of encouraging big corporations to do what is right for the American people, our system greatly rewards companies like Apple that proudly send jobs offshore. The following is an excerpt from an outstanding article by Andrew Zatlin…
Nine years, a trillion dollars in sales, and almost no taxes paid. That’s just the starting point for wondering about Apple’s actual contribution to the US economy.
Apple’s success drags down the US GDP. The behemoth that is Apple sold almost 200M phones last year, none of which were made in the US or used components made here. Instead of exporting $100B in iPhones, the US imported $50B. That $150B swing matters in terms of balance of trade, GDP and jobs. If you wanted to improve the US economy, there’s no better place to start than with Apple and smartphones.
Apple undermines the US manufacturing base. Assembly matters and manufacturing matters more. There was a time when Apple could have assembled phones and tablets in the US, but that would mean spending an extra $5 per phone since that’s approximately the extra labor cost to build that $700 phone here instead of in Vietnam or China. Assembly may not be a competitive, value-add step but it does employ a lot of people.
Unfortunately, it would also cut Apple’s profits by $1B, shrinking the company’s annual net income from $45B to $44B. Apple wouldn’t notice a drop in profits of $1B because it’s not putting its cash to use: Apple has $200B in cash conveniently parked outside of the US, not doing anything. On the other hand, assembling in the US would employ tens of thousands of people.
You can read the rest of that great article right here.
Our trade policies matter. Decades of incredibly foolish decisions have ripped our economic infrastructure to shreds, and we are slowly but steadily committing national economic suicide.
Now, Barack Obama is absolutely determined to deliver the finishing blow, and it is all being done in secret.
When are you going to wake up and start getting angry America?
Did you know that 40 percent of all American workers make less than $20,000 a year before taxes? And 65 percent of all American workers make less than $40,000 a year before taxes. If you work on Wall Street, or have a cushy job with the federal government, or work for a big tech firm out on the west coast, life is probably pretty good for you right now. But the truth is that most Americans are not living the high life. In fact, most Americans are just trying to figure out how to survive from month to month. For many Americans, making a choice between buying food for your family and paying the light bill is a common occurrence. But if you don’t live in that America, hearing that people actually live like that may sound very strange to you. After all, if everyone around you has expensive cars, the latest electronic gadgets and million dollar homes, the notion that America is in the midst of a very serious “economic decline” may seem very bizarre to you.
On Wednesday, the Dow hit a brand new record high, and Wall Street celebrated. Since the financial crisis of 2008, stocks have been on an unprecedented run. The top performers in the market have not just made millions of dollars – they have made billions of dollars. Luxury apartments in Manhattan and beachfront homes in the Hamptons are selling for absolutely astronomical prices, and it seems like life in the good parts of New York City is one gigantic endless party these days.
Meanwhile, life is quite good down in Washington D.C. as well. The wealth is spread more evenly, but on average the D.C. region actually has the highest standard of living of any major U.S. city. The reason for this is the obscene growth of the federal government. Over the past couple of decades, the U.S. government has ballooned in size and so have government salaries. During one recent year, the average federal employee living in the Washington D.C. area received total compensation worth more than $126,000.
Out in the San Francisco area, Internet money is flowing like wine right now. As I wrote about yesterday, top employees of companies such as Facebook and Twitter can make millions of dollars a year. And if you were lucky to get a piece of the ownership of one of those companies at a very early stage, you are essentially set for life.
And with the Twitter IPO coming up, Internet euphoria is once again reaching a fever pitch. For example, just check out what a 56-year-old administrative assistant said this week about why she is going to buy Twitter stock…
“I’m just buying because everybody’s talking about Twitter,” she said. “I’m just gonna take a chance.”
Is that how we should make our investment decisions from now on?
Just buy a stock because everybody’s talking about it?
That is the kind of insanity that is going on in “wealthy America” right now.
Unfortunately, the gap between “wealthy America” and “poor America” is greater than ever before.
If you live in “wealthy America”, what you are about to hear next will probably sound very strange.
CNN recently profiled a 44-year-old overnight prison guard named Delores Gilmore. She works really hard, but a lot of times she simply does not have enough money to pay all of her bills…
“The first of the month, I pay the rent,” she said. “The next check, I pay my light bills. Sometimes I won’t pay my rent and I pay the light bill from last month — if they cut if it off. Then I pay the rent the end of the month.”
Her life consists of going to work, taking care of her children, going to sleep, and then getting back up and repeating that same cycle once again…
“I’m not fooling anybody,” she told me. “I don’t have any friends. And that’s sad. … I go to work, come home, take them where they gotta go, if they gotta go somewhere, come back home, lay down, go to work.
“That’s what I do. All day, that’s what I do.”
Sadly, the truth is that tens of millions of Americans can identify with what she is going through on a daily basis. In millions of families, both the husband and the wife work multiple jobs and it is still not enough.
If we truly did have a free market capitalist system, the entire country would be a land of opportunity and things would be getting better for everybody. Unfortunately, that is not the case at all. The following are 21 facts about “wealthy America” and “poor America” that are hard to believe…
#1 The lowest earning 23,303,064 Americans combined make 36 percent less than the highest earning 2,915 Americans do.
#2 40 percent of all American workers (39.6 percent to be precise) make less than $20,000 a year.
#3 According to the Pew Research Center, the top 7 percent of all U.S. households own 63 percent of all the wealth in the country.
#4 On average, households in the top 7 percent have 24 times as much wealth as households in the bottom 93 percent.
#5 According to numbers that were just released this week, 49.7 million Americans are living in poverty. That is a brand new all-time record high.
#6 In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.
#7 Household incomes have actually been declining for five years in a row and total consumer credit has risen by a whopping 22 percent over the past three years.
#8 According to Forbes, the 400 wealthiest Americans have more wealth than the bottom 150 million Americans combined.
#9 The homeownership rate in the United States is at an 18 year low.
#10 The six heirs of Wal-Mart founder Sam Walton have as much wealth as the bottom one-third of all Americans combined.
#11 18 percent of all food stamp dollars are spent at Wal-Mart.
#12 According to the U.S. Census Bureau, the middle class is taking home a smaller share of the overall income pie than has ever been recorded before.
#13 It is hard to believe, but right now 1.2 million students that attend public schools in America are homeless. That number has risen by 72 percent since the start of the last recession.
#14 One recent study discovered that nearly half of all public students in the United States come from low income homes.
#15 In 1980, CEOs at S&P 500 companies made 42 times as much as their employees did on average. Today, CEOs at S&P 500 companies make 354 times as much as their employees do on average. In fact, there are many CEOs that make more than 1000 times what the average employees in their companies make.
#16 U.S. families that have a head of household that is under the age of 30 have a poverty rate of 37 percent.
#17 At this point, one out of every four American workers has a job that pays $10 an hour or less.
#18 Today, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.
#19 Approximately one out of every five households in the United States is now on food stamps.
#20 The number of Americans on food stamps has grown from 17 million in the year 2000 to more than 47 million today.
#21 At this point, the poorest 50 percent of all Americans collectively own just 2.5 percent of all the wealth in the United States.
So which America do you live in? Please feel free to tell us what is going on in your neck of the woods by posting a comment below…
Do you actually believe that the employment numbers are getting better? Do you actually believe that there is a bright future ahead for American workers? If so, then you really need to read this article. The truth is that we are in the midst of the worst employment crisis since the Great Depression, and there has been absolutely no employment recovery. In fact, the percentage of working age Americans that are employed is just about exactly where it was during the darkest days of the last recession. But the mainstream media is not telling you this. The mainstream media is instead focusing on the fact that the official “unemployment rate” declined from 7.6% in June to 7.4% in July. That sounds like great news, but when you take a deeper look at the employment numbers some very disturbing trends emerge.
Over the past several years, almost the entire decline in the unemployment rate can be accounted for by people “leaving the workforce”. The “unemployment rate” has not been going down because people are actually getting jobs. Rather, the “unemployment rate” has been going down because the government has been pretending that millions upon millions of American workers simply do not want jobs anymore. This is extremely misleading.
We are being told that 162,000 jobs were created in July. Okay, so that is just barely enough to keep up with population growth, and most of the jobs that were created last month were part-time jobs.
Meanwhile, the jobs numbers for the two previous months were both revised down…
The change in total nonfarm payroll employment for May was revised from +195,000 to +176,000, and the change for June was revised from +195,000 to +188,000. With these revisions, employment gains in May and June combined were 26,000 less than previously reported.
Will this month eventually be revised down too?
When it comes to measuring employment in the United States, I believe that a much more accurate measurement than the highly manipulated “unemployment rate” is the civilian employment-population ratio. This ratio tells us what percentage of working age Americans actually have a job.
Just prior to the last recession, about 63 percent of all working age Americans had a job. During the recession, that number plunged dramatically and ultimately fell below 59 percent, and it has stayed below 59 percent for 47 months in a row…
This is the first time in the post-World War II era that the employment-population ratio has not bounced back after a recession.
So there has not been an employment recovery. Anyone that tells you that there has been an employment recovery is lying to you.
Since the end of 2009, we have been treading water at best. But during that time, another disturbing trend has emerged. Good paying full-time jobs are rapidly being replaced by low paying part-time jobs.
And this trend has definitely accelerated this year. If you can believe it, an astounding 76.7 percent of the jobs that have been “created” in 2013 have been part-time jobs.
As I wrote about last month, the employment landscape in this country is fundamentally changing. At this point, the number one employer in this country is Wal-Mart, and the number two employer in this country is a temp agency (Kelly Services).
This is a huge reason why the middle class is dying. You simply can’t raise a family on a part-time income.
Our young adults are being hit particularly hard. According to Gallup, the percentage of working age Americans under the age of 30 with a job fell from 47.0% in June 2012 to 43.6% in June 2013…
Fewer Americans aged 18 to 29 worked full time for an employer in June 2013 (43.6%) than did so in June 2012 (47.0%), according to Gallup’s Payroll to Population employment rate. The P2P rate for young adults is also down from 45.8% in June 2011 and 46.3% in June 2010.
When our young people get out of school and enter the real world, they are finding that “good jobs” are few and far between. But unless our young people can find “breadwinner jobs”, they are not going to be able to get married, buy homes and raise families.
A lot of young people are doing their best, but things are really tough out there right now. The lack of good jobs is the primary reason why families that have a head of household under the age of 30 have a poverty rate of 37 percent.
A lot of young adults are coping with this employment crisis by moving back in with their parents. According to one recent study, 36 percent of all young adults in the 18 to 31 age bracket are currently living with their folks.
Are you starting to understand that our system is broken?
The quality of jobs in this country continues to steadily decline. Just consider the following numbers from one of my previous articles…
-The number of part-time workers in the United States has just hit a brand new all-time high, but the number of full-time workers is still nearly 6 million below the old record that was set back in 2007.
-In America today, only 47 percent of adults have a full-time job.
-At this point, one out of every four American workers has a job that pays $10 an hour or less.
-An astounding 53 percent of all American workers make less than $30,000 a year.
And as I mentioned yesterday, until we have a jobs recovery there will be no housing recovery no matter how much the Federal Reserve tries to manipulate the system.
The mainstream media continues to insist that “things are looking up” for the housing market, and yet the home ownership rate in the United States is the lowest that it has been in 18 years.
In order for the middle class to thrive, people have got to be able to get good jobs and people have got to be able to buy homes.
Instead, the percentage of good jobs in our economy continues to shrink, the level of home ownership continues to decline, and less than half of all Americans now consider themselves to be middle class.
The next wave of the economic crisis has not even hit us yet, but we continue to see poverty rates soar all over the nation. In fact, just this week there was an article about the tent cities that are starting to pop up all over New Jersey…
Tent cities have popped up across New Jersey including the state’s poorest city.
Meg Baker chased the story of Camden’s tent city. Residing off Route 38 at Wilson Boulevard under an overpass, through woods and down a path of trash lays a community of people living in tents. This particular community was relocated from Federal Street and it’s inhabited by an array of people: addicts, people who have fallen on hard times and some with mental illness.
Baker took a tour of this run down community and the pictures show just how heart-wrenching this situation really is. Among the homes are decomposing food, broken furniture, and feral cats.
This is supposed to be “the economic recovery”.
If things were going to get “better” it should have happened by now.
But things didn’t get better, and now the next wave of the economic crisis is rapidly approaching.
As I tried to explain the other day, the most important number in our economy is the yield on 10 year U.S. Treasuries. As that number goes up, interest rates all over our economic system go up. And much higher interest rates would be absolutely devastating for our economy.
Unfortunately, many analysts now believe that interest rates are going to go much, much higher than they are right now. Just check out this excerpt from a recent CNBC article…
The Federal Reserve will lose control of interest rates as the “great rotation” out of bonds into equities takes off in full force, according to one market watcher, who sees U.S. 10-year Treasury yields hitting 5-6 percent in the next 18-24 months.
“It is our opinion that interest rates have begun their assent, that the Fed will eventually lose control of interest rates. The yield curve will first steepen and then will shift, moving rates significantly higher,” said Mike Crofton, President and CEO, Philadelphia Trust Company told CNBC on Wednesday.
If interest rates do go that high, our economy simply will not be able to handle that. It would cripple the finances of state and local governments all over the nation, it would absolutely crush the housing market, and it would cause a derivatives crisis unlike anything that we have ever seen before.
The smart money knows that rising interest rates spell big trouble and they are already pulling their money out of the market as a Bloomberg article recently detailed…
Private-equity managers from Fortress Investment Group LLC (FIG) to Blackstone Group LP (BX), which made billions by buying low and selling high, say now is the time to exit investments as stocks rally and interest rates start to rise.
And Apollo Global Management LLC Chief Executive Officer Leon Black said the following back in April…
“It’s almost biblical: there is a time to reap and there’s a time to sow,” Apollo (APO)’s Black said at a conference in April. “We think it’s a fabulous environment to be selling. We’re selling everything that’s not nailed down in our portfolio.”
The smart money is getting out while the getting is good.
They know that a storm is coming.
They know what higher interest rates will do to the economy.
As bad as the employment picture is right now, this is NOTHING compared to what is coming.
This is about as good as things are going to get. It is all downhill from here.
So enjoy this false bubble of pseudo-prosperity while you still can.
When the next great wave of the economic crisis strikes, millions upon millions of Americans are going to lose their jobs and the official unemployment rate is going to soar well up into the double digits.
Can you support a family on $2,000 a month? Recently, McDonald’s and Visa teamed up to launch a website that is intended to help employees of McDonald’s manage their money. The aspect of the website that is getting a tremendous amount of national attention is the “McDonald’s Budget” which is a sample monthly budget which is designed to help workers plan their spending. You can see a copy of it for yourself right here. This budget is laughably unrealistic, but it is also deeply tragic, because there are tens of millions of American workers that are actually trying to raise families on this kind of an income.
The first thing that you will notice about the McDonald’s Budget is that it expects workers to have two jobs. It is an open admission that working at McDonald’s is not enough to survive. So this budget assumes that the worker will take on a second job which will pay nearly as much as the first one does. Assuming that both jobs pay about the minimum wage, the budget will require about 70 to 80 hours of work every week.
People can put in those kind of hours for a time, but after a while your body starts to break down. I have been there, and I have known many others that have been there.
But let’s assume that the hypothetical worker that this budget is for can work that many hours indefinitely. The budget assumes a yearly income of about $24,000 after taxes, and that would make it a fairly typical budget for a typical working class American.
In the United States today, 47 percent of all U.S. workers make less than $25,000 a year before taxes. So millions upon millions of U.S. workers are trying to make ends meet each month on very limited incomes.
Does the “McDonald’s Budget” provide any solutions for those workers?
Well, this budget allocates $0 for food, so if you plan on following this budget you might want to anticipate fasting a lot each month.
This budget also allocates $0 for gasoline. So either you will have to ride a bicycle or walk everywhere you go.
This budget does not allocate any money for clothing either. If you really need something to wear, perhaps you can take some cash from the “monthly spending money” category and go down to the local thrift store and get something.
In addition, this budget has no money for water, no money for child care and you might as well forget about saving for retirement. But if you work yourself 70 to 80 hours a week, you probably won’t even make it to retirement age anyway.
So what are some of the things that actually are in the budget?
Well, it allocates $20 a month for health insurance.
Wow – where can I sign up for that health insurance plan?
As the Washington Post noted, nobody is going to be able to get health insurance that cheaply…
Low-income individuals receive assistance from Medicaid, but an after-tax income of $24,720 would put Medicaid out of reach in most states. The same point will likely apply to the subsidies offered by Obamacare: An individual with an income of $17,000 in California will be able to get a basic health insurance plan at no cost, but an individual making $28,000 will have to pay at least $137 per month.
So even a young, healthy person will have to pay $100 or more for an individual health insurance policy in most circumstances. Perhaps McDonalds is tacitly admitting that many low-income workers, including McDonalds employees, can’t afford health insurance and simply make do without it.
The original version of the budget also assumed that the worker would spend zero dollars a month on “heating”.
Perhaps McDonald’s just expects their workers to freeze all winter.
The new version of the budget now allocates $50 a month for heating. Perhaps that may work for the state of Florida, but anyone that lives in a northern state knows that it takes a whole lot more than that just to heat up your home to a level that is barely livable during the winter.
This budget is absolutely crazy. But perhaps even more patronizing then the budget itself is the following statement that is made on the website: “You can have almost anything you want as long as you plan ahead and save for it.”
Do they expect anyone to actually fall for that line?
Don’t get me wrong. Working at McDonald’s is great for some people. I worked there myself when I was in high school. But the vast majority of adult Americans need jobs that will enable them to take care of their families. And those kinds of jobs are rapidly disappearing.
Last month, the U.S. economy lost 240,000 full-time jobs. We are about 6 million full-time jobs below the all-time record that was set back in 2007. For much more on this, please see my previous article entitled: “The Decline Of Breadwinner Jobs Has Resulted In The Longest Bread Lines In American History“.
Today, one out of every four American workers has a job that pays $10 an hour or less. A lot of very talented people are cutting hair, flipping burgers or working for temp agencies. Those people should be doing something that takes advantage of their skills and abilities, but the U.S. economy is not producing enough of those kinds of jobs anymore.
Unfortunately, this is only just the beginning. The next major wave of the economic collapse is rapidly approaching, and when it strikes unemployment in this country is going to get much worse.
So don’t put all of your faith in the system, because the system is failing. Even if you do have a good job right now, you could lose it at any moment.
Whatever you can do to become more independent of the system is a good thing. For example, starting up a side business is a wonderful thing. It takes a tremendous amount of effort, but nobody can fire you if you are the boss.
So what do you think of the “McDonald’s Budget”? Please feel free to share your opinion by posting a comment below…
Are you ready for a future where China will employ millions of American workers and dominate thousands of small communities all over the United States? Such a future would be unimaginable to many Americans, but the truth is that it is already starting to happen. Chinese acquisition of U.S. businesses set a new all-time record last year, and it is on pace to absolutely shatter that record this year. Meanwhile, China is voraciously gobbling up real estate and is establishing economic beachheads all over America. If China continues to build economic power inside the United States, it will eventually become the dominant economic force in thousands of small communities all over the nation. Just think about what the Smithfield Foods acquisition alone will mean. Smithfield Foods is the largest pork producer and processor in the world. It has facilities in 26 U.S. states and it employs tens of thousands of Americans. It directly owns 460 farms and has contracts with approximately 2,100 others. But now a Chinese company has bought it for $4.7 billion, and that means that the Chinese will now be the most important employer in dozens of rural communities all over America. If you don’t think that this is important, you haven’t been paying much attention to what has been going on in the world. Thanks in part to our massively bloated trade deficit with China, the Chinese have trillions of dollars to spend. They are only just starting to exercise their economic muscles.
And it is important to keep in mind that there is often not much of a difference between “the Chinese government” and “Chinese corporations”. In 2011, 43 percent of all profits in China were produced by companies that the Chinese government had a controlling interest in. Americans are accustomed to thinking of “government” and “business” as being separate things, but in China they are often one and the same. Even when there is a separation in ownership, the reality is that no major Chinese corporation is going to go against the authority and guidance of the Chinese government. The relationship between government and business in China is much different than it is in the United States.
Over the past several years, Chinese companies have become increasingly aggressive. Last year a Chinese company spent $2.6 billion to purchase AMC entertainment – one of the largest movie theater chains in the United States. Now that Chinese company controls more movie ticket sales than anyone else in the world. At the time, that was the largest acquisition of a U.S. firm by a Chinese company, but now the Smithfield Foods deal has greatly surpassed that.
But China is not just relying on acquisitions to expand its economic power. The truth is that “economic beachheads” are being established all over America. For example, Golden Dragon Precise Copper Tube Group, Inc. recently broke ground on a $100 million plant in Thomasville, Alabama. I am sure that many of the residents of Thomasville, Alabama will be glad to have jobs, but it will also become yet another community that will now be heavily dependent on communist China.
And guess where else Chinese companies are putting down roots?
Yes, the poster child for the deindustrialization of America is being invaded by the Chinese. The following comes from a recent CNBC article…
Dozens of companies from China are putting down roots in Detroit, part of the country’s steady push into the American auto industry.
Chinese-owned companies are investing in American businesses and new vehicle technology, selling everything from seat belts to shock absorbers in retail stores, and hiring experienced engineers and designers in an effort to soak up the talent and expertise of domestic automakers and their suppliers.
If you recently purchased an “American-made vehicle”, there is a really good chance that it has Chinese parts in it.
In fact, it is becoming harder and harder to get auto parts that are actually made in America by American companies. A lot of those companies are dying off. One example of this is a battery maker that had received $132 million from the federal government that was recently gobbled up by a huge Chinese corporation…
Industry analysts are hard-pressed to put a number on the Chinese suppliers operating in the United States. “We simply don’t know how many there are,” said David Andrea, an official with the Original Equipment Suppliers Association, a trade organization for auto parts makers.
In one of the more prominent deals, the Wanxiang Group bought most of the assets of the battery maker A123 Systems, which filed for bankruptcy last year despite receiving $132 million of $249 million in federal grants to build two factories in Michigan.
Congressional Republicans criticized the deal, saying A123’s technology could support military applications in China. Still, the buyout was approved this year by the Committee on Foreign Investment in the United States, a federal government panel.
China seems particularly interested in acquiring energy resources in the United States. For example, did you know that China is actually mining for coal in the mountains of Tennessee?
Guizhou Gouchuang Energy Holdings Group spent 616 million dollars to acquire Triple H Coal Co. in Jacksboro, Tennessee. At the time, that acquisition really didn’t make much news, but now a group of conservatives in Tennessee is trying to stop the Chinese from blowing up their mountains and taking their coal. The following is from a Wall Street Journal article back in March…
The Tennessee Conservative Union began airing an ad Tuesday that says lawmakers have failed to protect the state’s scenic mountains and are allowing the “Chinese to destroy our mountains and take our coal…the same folks who hold our debt.”
But when it comes to our energy resources, China has been most interested in our oil and natural gas. It is a complete and total mystery why the federal government would allow China to buy up our precious domestic sources of energy, but it is happening. The following is a list of some of the oil and natural gas deals that China has been involved in during the last few years that was compiled by the Wall Street Journal…
Colorado: Cnooc gained a one-third stake in 800,000 acres in northeast Colorado and southeast Wyoming in a $1.27 billion pact with Chesapeake Energy Corp.
Louisiana: Sinopec has a one-third interest in 265,000 acres in the Tuscaloosa Marine Shale after a broader $2.5-billion deal with Devon Energy.
Michigan: Sinopec gained a one-third interest in 350,000 acres in a larger $2.5 billion deal with Devon Energy.
Ohio: Sinopec acquired a one-third stake in Devon Energy’s 235,000 Utica Shale acres in a larger $2.5 billion deal.
Oklahoma: Sinopec has a one-third interest in 215,000 acres in a broader $2.5 billion deal with Devon Energy.
Texas: Cnooc acquired a one-third interest in Chesapeake Energy’s 600,000 acres in the Eagle Ford Shale in a $2.16-billion deal.
Wyoming: Cnooc has a one-third stake in 800,000 acres in northeast Colorado and southeast Wyoming after a $1.27 billion pact with Chesapeake Energy. Sinopec gained a one-third interest in Devon Energy’s 320,000 acres as part of a larger $2.5 billion deal.
Gulf of Mexico: Cnooc Ltd. separately acquired minority stakes in some of Statoil ASA’s leases as well as six of Nexen Inc.’s deep-water wells.
How could we be so stupid?
Sadly, as our politicians endlessly bicker China just continues to aggressively push ahead.
And pretty soon China may want to build entire cities in the United States just like they have been doing in other countries. According to Bloomberg, right now China is actually building a city larger than Manhattan just outside of the capital of Belarus…
China is building an entire city in the forests near the Belarusian capital Minsk to create a manufacturing springboard between the European Union and Russia.
Belarusian President Aleksandr Lukashenko allotted an area 40 percent larger than Manhattan around Minsk’s international airport for the $5 billion development, which will include enough housing to accommodate 155,000 people, according to Chinese and Belarusian officials.
And this is actually already happening on a much smaller scale in this country. For example, as I have written about previously, a Chinese company known as “Sino-Michigan Properties LLC” has purchased 200 acres of land near the little town of Milan, Michigan. Their stated goal is to construct a “China City” that has artificial lakes, a Chinese cultural center and hundreds of housing units for Chinese citizens.
In other cases, large chunks of real estate in the middle of major U.S. cities are being gobbled up by Chinese “investors”. Just check out what a Fortune article from a while back says has been happening in Toledo, Ohio…
In March 2011, Chinese investors paid $2.15 million cash for a restaurant complex on the Maumee River in Toledo, Ohio. Soon they put down another $3.8 million on 69 acres of newly decontaminated land in the city’s Marina District, promising to invest $200 million in a new residential-commercial development. That September, another Chinese firm spent $3 million for an aging hotel across a nearby bridge with a view of the minor league ballpark.
Are you starting to get the picture?
China is on the rise and America is in decline. If you doubt this, just read the following list of facts which comes from one of my previous articles entitled “40 Ways That China Is Beating America“…
#1 As I mentioned above, when you total up all imports and exports of goods, China is now the number one trading nation on the entire planet.
#2 During 2012, we sold about 110 billion dollars worth of stuff to the Chinese, but they sold about 425 billion dollars worth of stuff to us. That was the largest trade deficit that one nation has had with another nation in the history of the world.
#3 Overall, the U.S. has run a trade deficit with China over the past decade that comes to more than 2.3 trillion dollars.
#4 China now has the largest new car market in the entire world.
#5 China has more foreign currency reserves than anyone else on the planet.
#6 China is the number one gold producer in the world.
#7 China is also the number one gold importer in the world.
#8 The uniforms for the U.S. Olympic team were made in China.
#9 85 percent of all artificial Christmas trees are made in China.
#10 The new World Trade Center tower is going to include glass that has been imported from China.
#11 The new Martin Luther King memorial on the National Mall was made in China.
#12 One of the reasons it is so hard to export stuff to China is because of their tariffs. According to the New York Times, a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China thanks to all the tariffs.
#13 The Chinese economy has grown 7 times faster than the U.S. economy has over the past decade.
#14 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.
#15 The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.
#16 Overall, the United States has lost a total of more than 56,000 manufacturing facilities since 2001.
#17 According to the Economic Policy Institute, America is losing half a million jobs to China every single year.
#18 China now produces more than twice as many automobiles as the United States does.
#19 Since the auto industry bailout, approximately 70 percent of all GM vehicles have been built outside the United States.
#20 After being bailed out by U.S. taxpayers, General Motors is currently involved in 11 joint ventures with companies owned by the Chinese government. The price for entering into many of these “joint ventures” was a transfer of “state of the art technology” from General Motors to the communist Chinese.
#21 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China’s share had soared to 20 percent.
#22 The United States has lost more than a quarter of all of its high-tech manufacturing jobs over the past ten years.
#23 China’s number one export to the U.S. is computer equipment, but the number one U.S. export to China is “scrap and trash”.
#24 The U.S. trade deficit with China is now more than 30 times larger than it was back in 1990.
#25 China now consumes more energy than the United States does.
#26 China is now the leading manufacturer of goods in the entire world.
#27 China uses more cement than the rest of the world combined.
#28 China is now the number one producer of wind and solar power on the entire globe.
#29 There are more pigs in China than in the next 43 pork producing nations combined.
#30 Today, China produces nearly twice as much beer as the United States does.
#31 Right now, China is producing more than three times as much coal as the United States does.
#33 China now produces 11 times as much steel as the United States does.
#34 China produces more than 90 percent of the global supply of rare earth elements.
#35 China is now the number one supplier of components that are critical to the operation of U.S. defense systems.
#36 A recent investigation by the U.S. Senate Committee on Armed Services found more than one million counterfeit Chinese parts in the Department of Defense supply chain.
#37 15 years ago, China was 14th in the world in published scientific research articles. But now, China is expected to pass the United States and become number one very shortly.
#38 China now awards more doctoral degrees in engineering each year than the United States does.
#39 The average household debt load in the United States is 136% of average household income. In China, the average household debt load is 17% of average household income.
#40 The Chinese have begun to buy up huge amounts of U.S. real estate. In fact, Chinese citizens purchased one out of every ten homes that were sold in the state of California in 2011.
And what we have seen so far may just be the tip of the iceberg as far as Chinese “investment” in U.S. real estate is concerned. The following is a brief excerpt from a Bloomberg article that was posted just last week…
China is studying the possibility of investing a portion of its $3.4 trillion in foreign-exchange reserves in U.S. real estate, said two people with direct knowledge of the situation.
The State Administration of Foreign Exchange began the study after seeing signs of a recovery in the U.S. property market, said the people, who asked not to be identified as they weren’t authorized to speak publicly about the matter. China may acquire properties, invest in real estate funds or buy stakes in property companies, they said. The safety of the investments will be the top priority, said the people, who didn’t elaborate on a timetable or other details.
So what can we do about all of this?
Unfortunately, not a whole lot. Both major political parties seem to be fully convinced that merging our economy with the economy of communist China is a great idea. I would not expect major changes in our policies regarding China any time soon.
For now, I will just leave you with one piece of advice…
Learn to speak Chinese. You might need it someday.