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19 Signs That American Families Are Being Economically Destroyed

19 - Public DomainThe systematic destruction of the American way of life is happening all around us, and yet most people have no idea what is happening.  Once upon a time in America, if you were responsible and hard working you could get a good paying job that could support a middle class lifestyle for an entire family even if you only had a high school education.  Things weren’t perfect, but generally almost everyone in the entire country was able to take care of themselves without government assistance.  We worked hard, we played hard, and our seemingly boundless prosperity was the envy of the entire planet.  But over the past several decades things have completely changed.  We consumed far more wealth than we produced, we shipped millions of good paying jobs overseas, we piled up the biggest mountain of debt in the history of the world, and we kept electing politicians that had absolutely no concern for the long-term future of this nation whatsoever.  So now good jobs are in very short supply, we are drowning in an ocean of red ink, the middle class is rapidly shrinking and dependence on the government is at an all-time high.  Even as we stand at the precipice of the next great economic crisis, we continue to make the same mistakes.  In the end, all of us are going to pay a very great price for decades of incredibly foolish decisions.  Of course a tremendous amount of damage has already been done.  The numbers that I am about to share with you are staggering.  The following are 19 signs that American families are being economically destroyed…

#1 The poorest 40 percent of all Americans now spend more than 50 percent of their incomes just on food and housing.

#2 For those Americans that don’t own a home, 50 percent of them spend more than a third of their incomes just on rent.

#3 The price of school lunches has risen to the 3 dollar mark at many public schools across the nation.

#4 McDonald’s “Dollar Menu & More” now includes items that cost as much as 5 dollars.

#5 The price of ground beef has doubled since 2009.

#6 In 1986, child care expenses for families with employed mothers used up 6.3 percent of all income.  Today, that figure is up to 7.2 percent.

#7 Incomes fell for the bottom 80 percent of all income earners in the United States during the 12 months leading up to June 2014.

#8 At this point, more than 50 percent of all American workers bring home less than $30,000 a year in wages.

#9 After adjusting for inflation, median household income has fallen by nearly $5,000 since 2007.

#10 According to the New York Times, the “typical American household” is now worth 36 percent less than it was worth a decade ago.

#11 47 percent of all Americans do not put a single penny out of their paychecks into savings.

#12 One survey found that 62 percent of all Americans are currently living paycheck to paycheck.

#13 According to the U.S. Department of Education, 33 percent of all Americans with student loans are currently behind on their student loan debt repayments.

#14 According to one recent report, 43 million Americans currently have unpaid medical debt on their credit reports.

#15 The rate of homeownership in the U.S. has been declining for seven years in a row, and it is now the lowest that it has been in 20 years.

#16 For each of the past six years, more businesses have closed in the United States than have opened.  Prior to 2008, this had never happened before in all of U.S. history.

#17 According to the Census Bureau, 65 percent of all children in the United States are living in a home that receives some form of aid from the federal government.

#18 If you have no debt at all, and you also have 10 dollars in your wallet, that you are wealthier than 25 percent of all Americans.

#19 On top of everything else, the average American must work from January 1st to April 24th just to pay all federal, state and local taxes.

All of us know people that once were doing quite well but that are now just struggling to get by from month to month.

Perhaps this has happened to you.

If you have ever been in that position, you probably remember what it feels like to have people look down on you.  Unfortunately, in our society the value that we place on individuals has a tremendous amount to do with how much money they have.

So if you don’t have much money, there are a lot of people out there that will treat you like dirt.  The following excerpt comes from a Washington Post article entitled “The poor are treated like criminals everywhere, even at the grocery store“…

Want to see a look of pure hatred? Pull out an EBT card at the grocery store.

Now that my kids are grown and gone, my Social Security check is enough to keep me from qualifying for government food benefits. But I remember well when we did qualify for a monthly EBT deposit, a whopping $22 — and that was before Congress cut SNAP benefits in November 2013. Like 70 percent of people receiving SNAP benefits, I couldn’t feed my family on that amount. But I remember the comments from middle-class people, the assumptions about me and my disability and what the poor should and shouldn’t be spending money on.

Have you ever seen this?

Have you ever experienced this yourself?

These days, most people on food stamps are not in that situation because they want to be.  Rather, they are victims of our long-term economic collapse.

And this is just the beginning.  When the next major economic crisis strikes, the suffering in this country is going to go to unprecedented levels.

As we enter that time, we are going to need a whole lot more love and compassion than we are exhibiting right now.

As a nation, we have made decades of incredibly bad decisions.  As a result, we are experiencing bad consequences which are going to become increasingly more severe.

The numbers that I just shared with you are not good.  But over the next several years they are going to get a whole lot worse.

Everything that can be shaken will be shaken, and life in America is about to change in a major way.

 

The Price Of Ground Beef Has DOUBLED Since The Last Financial Crisis

Burger And Fries - Photo by Ewan MunroSince the depths of the last recession, the price of ground beef in the United States has doubled.  Has your paycheck doubled since then?  Even though the Federal Reserve insists that we are in a “low inflation” environment, the government’s own numbers show that the price of ground beef has been on an unprecedented run over the past six years.  In early 2009, the average price of a pound of ground beef was hovering near 2 dollars.  In February, it hit a brand new all-time record high of $4.238 per pound.  Even just 12 months ago, the price of ground beef was sitting at $3.555 per pound.  So we are talking about a huge increase.  And this hits American families where they really live.  Each year, the average American consumes approximately 270 pounds of meat.  The only nation in the world that eats more meat than we do is Luxembourg.  If the paychecks of American workers were going up fast enough to deal with this increase, it wouldn’t be that big of a deal.  But of course that is not happening.  In an article just last week, I showed that real median household income is a couple thousand dollars lower now than it was during the depths of the last recession.  The middle class is being squeezed, and we are rapidly getting to the point where burgers are going to be considered a “luxury” item.

The following chart was posted by the Economic Policy Journal on Wednesday, and it incorporates the latest data from the Bureau of Labor Statistics.  When I first saw it, I was rather stunned.  I knew that the price of ground beef had become rather outrageous in my local grocery stores, but I had no idea just how much damage had been done over the past six years…

Beef Price - Economic Policy Journal

The biggest reason why the price of ground beef has been going up is the fact that the U.S. cattle herd has been shrinking.  It shrunk seven years in a row, and on January 1st, 2014 it was the smallest that it had been since 1951.

The good news is that the decline appears to have stopped, at least for the moment.  According to the Wall Street Journal, the size of the U.S. cattle herd actually increased by 1 percent last year…

The U.S. cattle herd expanded in 2014 for the first time in eight years, offering hope to consumers that beef prices could start to subside after soaring to a series of records.

The nation’s cattle supply increased 1% in the year through Jan. 1 to 89.8 million head, according to data released Friday by the U.S. Agriculture Department, reversing a steady decline fueled by prolonged drought in the southern U.S. Great Plains and industry consolidation that encouraged many ranchers to thin herds.

But an increase of 1 percent is just barely going to keep up with the official population growth rate.  If you factor in illegal immigration, we are still losing ground.

And if we have another major drought in cattle country this summer, the cattle herd is going to start shrinking again.

In addition, the price of food overall has been steadily rising for years.  Here is a chart that I shared the other day

Presentation Food Inflation

It boggles the mind that the Federal Reserve can claim that we are in a “low inflation” environment.  Anyone that goes grocery shopping feels the pain of these rising prices every time that they go to the store.

In the list that I put together yesterday, I included the following statistic…

Almost half of all Americans (47 percent) do not put a single penny out of their paychecks into savings.

One of the primary reasons why so many Americans are not saving any money is because many families simply cannot save any money.  Their paychecks are stagnant while the cost of living just keeps going up and up.

There simply are not enough “good jobs” out there anymore.  Our economy continues to bleed middle class jobs and the competition for the jobs that remain is quite intense.

Do you know what the two most common occupations in America today are?

According to the Bureau of Labor Statistics, they are “retail sales clerk” and “cashier”.

And of course neither of those “occupations” pays even close to what is required to support a middle class family.

On average, a retail sales clerk makes $24,020 a year, and a cashier makes $20,670 a year.

Because the quality of our jobs has declined so much, there are millions of American families today in which both the mother and the father are working multiple jobs in a desperate attempt to make ends meet each month.

But don’t worry, the Federal Reserve says that we are nearly at “full employment“, and Barack Obama says that everything is going to be just fine.

Actually, the truth is that things are about to get a lot worse.  At this point, we are even getting pessimistic numbers out of the Federal Reserve.  Just this week we learned that the Fed is now projecting that economic growth for the first quarter of 2015 will be barely above zero

From almost 2.5% GDP growth expectations in February, The Atlanta Fed’s GDPNow model has now collapsed its estimates of Q1 GDP growth to just 0.2%plunging from +1.4% just 2 weeks ago. The reality of plunging capex and no decoupling is starting to rear its ugly head in the hard data and as the sun warms things up, weather will start to lose its ability to sway sentiment.

We are at a turning point.  The bubble of false stability that we have been living in is rapidly coming to an end, and when people start to realize that another great economic crisis is coming there is going to be a lot of panic.

And as far as food prices go, they are just going to keep taking a bigger chunk out of all of our wallets.

As high as prices are already, the truth is that your food dollars are never going to go farther than they do right now.

So let us hope for the best, but let us also get prepared for the worst.

12 Signs That The Economy Is Really Starting To Bleed Oil Patch Jobs

Oil Rig Texas - Public DomainThe gravy train is over for oil workers.  All over North America, people that felt very secure about their jobs just a few weeks ago are now getting pink slips.  There are even some people that I know personally that this has happened to.  The economy is really starting to bleed oil patch jobs, and as long as the price of oil stays down at this level the job losses are going to continue.  But this is what happens when a “boom” turns into a “bust”.  Since 2003, drilling and extraction jobs in the United States have doubled.  And these jobs typically pay very well.  It is not uncommon for oil patch workers to make well over $100,000 a year, and these are precisely the types of jobs that we cannot afford to be losing.  The middle class is struggling mightily as it is.  And just like we witnessed in 2008, oil industry layoffs usually come before a downturn in employment for the overall economy.  So if you think that it is tough to find a good job in America right now, you definitely will not like what comes next.

At one time, I encouraged those that were desperate for employment to check out states like North Dakota and Texas that were experiencing an oil boom.  Unfortunately, the tremendous expansion that we witnessed is now reversing

In states like North Dakota, Oklahoma and Texas, which have reaped the benefits of a domestic oil boom, the retrenchment is beginning.

“Drilling budgets are being slashed across the board,” said Ron Ness, president of the North Dakota Petroleum Council, which represents more than 500 companies working in the state’s Bakken oil patch.

Smaller budgets and less extraction activity means less jobs.

Often, the loss of a job in this industry can come without any warning whatsoever.  Just check out the following example from a recent Bloomberg article

The first thing oilfield geophysicist Emmanuel Osakwe noticed when he arrived back at work before 8 a.m. last month after a short vacation was all the darkened offices.

By that time of morning, the West Houston building of his oilfield services company was usually bustling with workers. A couple hours later, after a surprise call from Human Resources, Osakwe was adding to the emptiness: one of thousands of energy industry workers getting their pink slips as crude prices have plunged to less than $50 a barrel.

These jobs are not easy to replace.  If oil industry veterans go down to the local Wal-Mart to get jobs, they will end up making only a very small fraction of what they once did.  Every one of these jobs that gets lost is really going to hurt.

And at this point, the job losses in the oil industry are threatening to become an avalanche.  The following are 12 signs that the economy is really starting to bleed oil patch jobs…

#1 It is being projected that the U.S. oil rig count will decline by 15 percent in the first quarter of 2015 alone.  And when there are less rigs operating, less workers are needed so people get fired.

#2 Last week, 55 more oil rigs shut down.  That was the largest single week decline in the United States in 24 years.

#3 Oilfield services provider Baker Hughes has announced that it plans to lay off 7,000 workers.

#4 Schlumberger, a big player in the energy industry, has announced plans to get rid of 9,000 workers.

#5 Suncor Energy is eliminating 1,000 workers from their oil projects up in Canada.

#6 Halliburton’s energy industry operations have slowed down dramatically, so they gave pink slips to 1,000 workers last month.

#7 Diamondback Energy just slashed their capital expenditure budget 40 percent to just $450 million.

#8 Elevation Resources plans to cut their capital expenditure budget from $227 million to $100 million.

#9 Concho Resources says that it plans to reduce the number of rigs that it is operating from 35 to 25.

#10 Tullow Oil has reduced their exploration budget from approximately a billion dollars to about 200 million dollars.

#11 Henry Resources President Danny Campbell has announced that his company is reducing activity “by up to 40 percent“.

#12 The Federal Reserve Bank of Dallas is projecting that 140,000 jobs related to the energy industry will be lost in the state of Texas alone during 2015.

And of course it isn’t just workers that are going to suffer.

Some states are extremely dependent on oil revenues.  Just take the state of Alaska for instance.  According to one recent news report, 90 percent of the budget of Alaska comes from oil revenue…

But oil is also a revenue source in more than two dozen states, especially for about a third of them. In Alaska, where up to 90 percent of the budget is funded by oil, new Gov. Bill Walker has ordered agency heads to start identifying spending cuts.

Sadly, it looks like oil is not going to rebound any time soon.

China, the biggest user of oil in the world, just reported that economic growth expanded at the slowest pace in 24 years.  And concerns about oversupply drove the price of U.S. crude down another couple of dollars on Monday

Oil declined about 5 percent on Tuesday after the International Monetary Fund cut its 2015 global economic forecast on lower fuel demand and key producer Iran hinted prices could drop to $25 a barrel without supportive OPEC action.

U.S. crude, also known as West Texas Intermediate or WTI, settled 4.7 percent lower at $46.39 a barrel, near its intraday bottom of $46.23.

There is only one other time in history when we have seen an oil price crash of this magnitude.

That was in 2008, just before the greatest financial crisis since the Great Depression.

Many believe that we are now on the verge of the next great financial crisis.

I hope that you are getting ready.

27 Facts That Show How The Middle Class Has Fared Under 6 Years Of Barack Obama

27 Facts That Show How The Middle Class Has Fared Under Barack ObamaDuring his State of the Union speech on Tuesday evening, Barack Obama is going to promise to make life better for middle class families.  Of course he has also promised to do this during all of his other State of the Union addresses, but apparently he still believes that there are people out there that are buying what he is selling.  Each January, he gets up there and tells us how the economy is “turning around” and to believe that much brighter days are right around the corner.  And yet things just continue to get even worse for the middle class.  The numbers that you are about to see will not be included in Obama’s State of the Union speech.  They don’t fit the “narrative” that Obama is trying to sell to the American people.  But all of these statistics are accurate.  They paint a picture of a middle class that is dying.  Yes, the decline of the U.S. middle class is a phenomenon that has been playing out for decades.  But without a doubt, our troubles have accelerated during the Obama years.  When it comes to economics, he is completely and utterly clueless, and the policies that he has implemented are eating away at the foundations of our economy like a cancer.  The following are 27 facts that show how the middle class has fared under 6 years of Barack Obama…

#1 American families in the middle 20 percent of the income scale now earn less money than they did on the day when Barack Obama first entered the White House.

#2 American families in the middle 20 percent of the income scale have a lower net worth than they did on the day when Barack Obama first entered the White House.

#3 According to a Washington Post article published just a few days ago, more than 50 percent of the children in U.S. public schools now come from low income homes.  This is the first time that this has happened in at least 50 years.

#4 According to a Census Bureau report that was recently released, 65 percent of all children in the United States are living in a home that receives some form of aid from the federal government.

#5 In 2008, the total number of business closures exceeded the total number of businesses being created for the first time ever, and that has continued to happen every single year since then.

#6 In 2008, 53 percent of all Americans considered themselves to be “middle class”.  But by 2014, only 44 percent of all Americans still considered themselves to be “middle class”.

#7 In 2008, 25 percent of all Americans in the 18 to 29-year-old age bracket considered themselves to be “lower class”.  But in 2014, an astounding 49 percent of all Americans in that age range considered themselves to be “lower class”.

#8 Traditionally, owning a home has been one of the key indicators that you belong to the middle class.  So what does the fact that the rate of homeownership in America has been falling for seven years in a row say about the Obama years?

#9 According to a survey that was conducted last year, 52 percent of all Americans cannot even afford the house that they are living in right now.

#10 After accounting for inflation, median household income in the United States is 8 percent lower than it was when the last recession started in 2007.

#11 According to one recent survey, 62 percent of all Americans are currently living paycheck to paycheck.

#12 At this point, one out of every three adults in the United States has an unpaid debt that is “in collections“.

#13 When Barack Obama first set foot in the Oval Office, 60.6 percent of all working age Americans had a job.  Today, that number is sitting at only 59.2 percent…

Employment Population Ratio 2015

#14 While Barack Obama has been in the White House, the average duration of unemployment in the United States has risen from 19.8 weeks to 32.8 weeks.

#15 It is hard to believe, but an astounding 53 percent of all American workers make less than $30,000 a year.

#16 At the end of Barack Obama’s first year in office, our yearly trade deficit with China was 226 billion dollars.  Last year, it was more than 314 billion dollars.

#17 When Barack Obama was first elected, the U.S. debt to GDP ratio was under 70 percent.  Today, it is over 101 percent.

#18 The U.S. national debt is on pace to approximately double during the eight years of the Obama administration.  In other words, under Barack Obama the U.S. government will accumulate about as much debt as it did under all of the other presidents in U.S. history combined.

#19 According to the New York Times, the “typical American household” is now worth 36 percent less than it was worth a decade ago.

#20 The poverty rate in the United States has been at 15 percent or above for 3 consecutive years.  This is the first time that has happened since 1965.

#21 From 2009 through 2013, the U.S. government spent a whopping 3.7 trillion dollars on welfare programs.

#22 While Barack Obama has been in the White House, the number of Americans on food stamps has gone from 32 million to 46 million.

#23 Ten years ago, the number of women in the U.S. that had full-time jobs outnumbered the number of women in the U.S. on food stamps by more than a 2 to 1 margin.  But now the number of women in the U.S. on food stamps actually exceeds the number of women that have full-time jobs.

#24 One recent survey discovered that about 22 percent of all Americans have had to turn to a church food panty for assistance.

#25 An astounding 45 percent of all African-American children in the United States live in areas of “concentrated poverty”.

#26 40.9 percent of all children in the United States that are living with only one parent are living in poverty.

#27 According to a report that was released late last year by the National Center on Family Homelessness, the number of homeless children in the United States has reached a new all-time record high of 2.5 million.

Unfortunately, this is just the beginning.

The incredibly foolish decisions that have been made by Obama, Congress and the Federal Reserve have brought us right to the precipice of another major financial crisis and another crippling economic downturn.

So as bad as the numbers that I just shared with you above are, the truth is that they are nothing compared to what is coming.

We are heading into the greatest economic crisis that any of us have ever seen, and it is going to shock the world.

I hope that you are getting ready.

14 Facts That Prove That The Number Of Children Living In Poverty This Christmas Is At A Record High

Children - Public DomainDid you know that 65 percent of all children in the United States live in a home that receives aid from the federal government?  We live at a time when child poverty in America is exploding.  Yes, the U.S. economy is experiencing a temporary bubble of false stability for the moment, but even during this period of false stability the gap between the wealthy and the poor continues to rapidly expand and the middle class is being systematically destroyed.  And sadly, this is having a disproportionate impact on children.  This is happening for a couple of reasons.  First of all, poorer households tend to have more children than wealthier households.  Secondly, most people tend to have children when they are in their young adult years, and right now young adults are being absolutely hammered by this economy.  As a result, things just continue to get even worse for children living in this country.  Here are 14 facts that show that the number of children in America living in poverty this Christmas is at an all-time record high…

#1 The National Center for Children in Poverty says that 45 percent of all U.S. children belong to low income families.

#2 According to a Census Bureau report that was released just this week, 65 percent of all children in America are living in a home that receives some form of aid from the federal government…

“Almost two-thirds (65 percent) of children,” said the Census Bureau, “lived in households that participated in at least one or more of the following government aid programs: Temporary Assistance for Needy Families (TANF), the Supplemental Nutrition Assistance Program (SNAP), the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Medicaid, and the National School Lunch Program.”

#3 According to a report recently released by UNICEF, almost one-third of all children in this country “live in households with an income below 60 percent of the national median income”.

#4 When it comes to child poverty, the United States ranks 36th out of the 41 “wealthy nations” that UNICEF looked at.

#5 An astounding 45 percent of all African-American children in America live in areas of “concentrated poverty”.

#6 40.9 percent of all children in the United States that are living with only one parent are living in poverty.

#7 These days, a lot of single mothers are really, really struggling to survive.  A decade ago, the number of women in America that had jobs outnumbered the number of women in America on food stamps by more than a 2 to 1 margin.  But now the number of women in America on food stamps actually exceeds the total number of women that have jobs.

#8 It is hard to believe, but right now 49 million Americans are dealing with food insecurity.

#9 According to a report that was released last month by the National Center on Family Homelessness, the number of homeless children in the United States has reached a new all-time high of 2.5 million.

#10 There are more than half a million homeless children in the state of California alone.

#11 One recent survey found that about 22 percent of all Americans have had to turn to a church food panty for assistance.

#12 This year, almost one out of every five households in the United States will go through the holiday season on food stamps.

#13 One of the primary reasons why kids are suffering so much is because their parents are simply not making enough money.  This is especially true for parents of young children.  For example, check out the following numbers from the Atlantic

Since the Great Recession struck in 2007, the median wage for people between the ages of 25 and 34, adjusted for inflation, has fallen in every major industry except for health care.

These numbers come from an analysis of the Census Current Population Survey by Konrad Mugglestone, an economist with Young Invincibles.

In retail, wholesale, leisure, and hospitality—which together employ more than one quarter of this age group—real wages have fallen more than 10 percent since 2007. To be clear, this doesn’t mean that most of this cohort are seeing their pay slashed, year after year. Instead it suggests that wage growth is failing to keep up with inflation, and that, as twentysomethings pass into their thirties, they are earning less than their older peers did before the recession.

#14 Overall, the quality of the jobs in America continues to decline.  At this point, most Americans do not bring home enough income to support a middle class lifestyle for their families.  Below I have shared an excerpt from an article that I published a while back

The following are some statistics about wages in the U.S. from a Social Security Administration report that was recently released

-39 percent of American workers made less than $20,000 last year.

-52 percent of American workers made less than $30,000 last year.

-63 percent of American workers made less than $40,000 last year.

-72 percent of American workers made less than $50,000 last year.

In addition to all of these numbers, there is also a lot of anecdotal evidence that families with children are really struggling right now.

For example, McDonald’s has traditionally been a place where poor and middle class families have taken their children for a cheap meal.  But the restaurant chain just released the worst sales numbers that we have seen in more than a decade.

And the really bad news is that this is just the beginning of the economic pain for families with children.  The U.S. economy is in a bubble period right now, and the authorities have been trying with all of their might to keep the bubble inflated.

Just imagine a bodybuilder that is pressing with all of his might to do one more rep on the bench press.  That is essentially where we are at.  In a recent piece, Brian Pretti summarized some of the extraordinary measures that global central banks have taken to keep the economic bubble inflated…

Since early 2009, central banks globally have printed more than $13 trillion. In addition, governments across the planet have increased their borrowings at historic proportions (the US just crossed $18T – another new high!), all in an effort to stimulate economies and avoid deflationary pressures. Total US Federal debt has more than doubled in five years, an increase of $9.5 trillion and counting.

Despite all of these efforts, the best that we have achieved is economic stagnation.

And now it is becoming clear that the overwhelming deflationary forces around the globe are starting to win the battle.  The central banks have used up their ammunition and they still have not turned things around.  In fact, as Ambrose Evans-Pritchard so eloquently put it recently, what we see all around us is “evidence of a 1930s-style depression, albeit one that is still contained”…

What is clear is that the world has become addicted to central bank stimulus. Bank of America said 56pc of global GDP is currently supported by zero interest rates, and so are 83pc of the free-floating equities on global bourses. Half of all government bonds in the world yield less that 1pc. Roughly 1.4bn people are experiencing negative rates in one form or another.

These are astonishing figures, evidence of a 1930s-style depression, albeit one that is still contained. Nobody knows what will happen as the Fed tries to break out of the stimulus trap, including Fed officials themselves.

But will it still be contained once the next major financial crash strikes?

As I discussed yesterday, there has never been a time when conditions have been more ideal for a financial crisis since the last one happened in 2008.

So as bad as things are for the children of America right now, they are only going to get worse.

In the years ahead may we all have great compassion for these victims of our incredibly foolish economic mistakes.

Does This Look Like A Housing Recovery To You?

Homeownership Rate 2014We just learned that the homeownership rate in the United States has fallen to the lowest level in 19 years.  But of course this is not a new trend.  As you will see in this article, the homeownership rate in the United States has been in a continual decline for more than 7 years.  Obviously this is not a sign of a healthy economy.  Traditionally, homeownership has been one of the key indicators that you belong to the middle class.  When people define “the American Dream”, it is usually one of the first things mentioned.  So if the percentage of Americans that own a home has been steadily going down for 7 years in a row, what does that tell us about the health of the middle class in this country?

The chart that you are about to view is clear evidence that we are in the midst of a long-term economic decline.  It shows what has happened to the homeownership rate in the U.S. since the year 2000, and as you can see it has been collapsing since the peak of the housing market back in 2007.  Does this look like a housing recovery to you?…

Homeownership Rate 2014

So many people get caught up in what is happening on Wall Street, but this is the “real economy” that affects people on a day to day basis.

Most Americans just want to be able to buy a home and provide a solid middle class living for their families.

The fact that the percentage of people that are able to achieve this “American Dream” is falling rapidly is very troubling.

There are some that blame this stunning decline in the homeownership rate on the Millennials.

And without a doubt, they are a significant part of the story.  They are moving back home with their parents at record rates, and many that are striking out on their own are renting apartments in the big cities.

This is one area where the decline of marriage in America is really hitting the economy.  Back in 1968, well over 50 percent of Americans in the 18 to 31-year-old age bracket were already married and living on their own.  Today, that number is below 25 percent.

But that is not all there is to this story.

In fact, the homeownership rate for Americans in the 35 to 44-year-old age bracket has been falling even faster than it has for Millennials…

In the first quarter of 2008, nearly 67% of people aged 35-44 owned homes. Now the number is barely above 59%. The percentage of people under 35 owning homes only fell five percentage points, to 36% from 41%.

So why is this happening?

Well, it is fairly simple actually.

In order to buy homes, people need to have good jobs.  And at this point, the percentage of Americans that are employed is still about where it was during the depths of the last recession.

In addition, wages in the United States have stagnated and the quality of our jobs continues to go down.  As I wrote about the other day, half of all American workers make less than $28,031 a year.  Needless to say, if you make less than $28,031  a year, you are going to have a really hard time getting approved for a home loan or making mortgage payments.

Things have been changing for a long time in this country, and not for the better.  Our economic problems have taken decades to develop, and the underlying causes of these problems is still not being addressed.

Meanwhile, middle class families continue to suffer.  One very surprising new survey discovered that more than half of all Americans now consider themselves to be “lower-middle class or working class with low economic security”.  While Wall Street has been celebrating in recent years, economic pessimism has become deeply ingrained on Main Street…

Optimism may be harder to come by these days. More than half of Americans surveyed in a Harris poll released Tuesday identified themselves as being lower-middle class or working class with low economic security. And 75 percent said they’re being held back financially by roadblocks like the cost of housing (24 percent), health care (21 percent) and credit-card debt (20 percent).

And that’s not the kicker.

“The most disappointing aspect is that 45 percent think they’ll never get their finances back to where they were before the financial crisis,” said Ken Rees, CEO of the Elevate credit service company, which commissioned the survey. “And a third are losing sleep over it.”

The only “recovery” that we have experienced since the last recession has been a temporary recovery on Wall Street.

For the rest of the country, our long-term economic decline has continued.

When I was growing up, my father was serving in the U.S. Navy and we lived in a fairly typical middle class neighborhood.  Everyone that I went to school with lived in a nice home and I never heard of any parent struggling to find work.  Of course life was not perfect, but it seemed to me like living a middle class lifestyle was “normal” for most people.

How times have changed since then.

Today, it seems like we are all part of a giant reality show where people are constantly being removed from the middle class and everyone is wondering who will be next.

So what do you think?

Is there hope for the middle class, or are the economic problems that we are facing just beginning?

Please feel free to share your opinion by posting a comment below…

 

50 Percent Of American Workers Make Less Than 28,031 Dollars A Year

Real Median Household Income 2014The Social Security Administration has just released wage statistics for 2013, and the numbers are startling.  Last year, 50 percent of all American workers made less than $28,031, and 39 percent of all American workers made less than $20,000.  If you worked a full-time job at $10 an hour all year long with two weeks off, you would make $20,000.  So the fact that 39 percent of all workers made less than that amount is rather telling.  This is more evidence of the declining quality of the jobs in this country.  In many homes in America today, both parents are working multiple jobs in a desperate attempt to make ends meet. Our paychecks are stagnant while the cost of living just continues to soar.  And the jobs that are being added to the economy pay a lot less than the jobs lost in the last recession.  In fact, it has been estimated that the jobs that have been created since the last recession pay an average of 23 percent less than the jobs that were lost.  We are witnessing the slow-motion destruction of the middle class, and very few of our leaders seem to care.

The “average” yearly wage in America last year was just $43,041.  But after accounting for inflation, that was actually worse than the year before

American paychecks shrank last year, just-released data show, further eroding the public’s purchasing power, which is so vital to economic growth.

Average pay for 2013 was $43,041 — down $79 from the previous year when measured in 2013 dollars. Worse, average pay fell $508 below the 2007 level, my analysis of the new Social Security Administration data shows.

Flat or declining average pay is a major reason so many Americans feel that the Great Recession never ended for them. A severe job shortage compounds that misery not just for workers but also for businesses trying to profit from selling goods and services.

Average pay declined in 59 of the 60 levels of worker pay the government reports each October.

And please keep in mind that “average pay” is really skewed by the millionaires and billionaires at the top end of the spectrum.

Median pay in 2013 was just $28,031.02.  That means that 50 percent of American workers made less than that number, and 50 percent of American workers made more than that number.

Here are some more numbers from the report that the Social Security Administration just released…

-39 percent of American workers made less than $20,000 last year.

-52 percent of American workers made less than $30,000 last year.

-63 percent of American workers made less than $40,000 last year.

-72 percent of American workers made less than $50,000 last year.

I don’t know about you, but those numbers are deeply troubling to me.

It has been estimated that it takes approximately $50,000 a year to support a middle class lifestyle for a family of four, and so the fact that 72 percent of all workers make less than that amount shows how difficult it is for families that try to get by with just a single breadwinner.

The way that our economy is structured now, both parents usually have to work as hard as they can just to pay the bills.

But there was one group of Americans that did see their incomes actually increase last year.

Those making over 50 million dollars had their pay increase by an average of $12.8 million in 2013.

For everyone else, the news was not good.

And of course this is a trend that has been going on for a long time.

Posted below is a chart that comes from the Federal Reserve.  It shows how real median household income in the United States has declined since the year 2000…

Real Median Household Income 2014

Meanwhile, the cost of living has continued to rise at a steady pace.

Needless to say, this is putting a tremendous squeeze on the middle class.  With each passing day, more Americans are losing their spots in the middle class and this has pushed government dependence to an all-time high.  According to the U.S. Census Bureau, 49 percent of all Americans now live in a home that receives money from the government each month.  This is completely and totally unsustainable, but our long-term economic problems just keep getting worse.

Our politicians have stood by as millions upon millions of good paying jobs have been shipped out of the country.  Millions of other middle class jobs have been lost to technology.  This has resulted in intense competition for the middle class jobs that remain.

And at this point we are even losing lots of lower paying retail jobs.  For example, it is being reported that Sears plans to close 110 more stores and lay off more than 6,000 workers.  Sears says that the report “isn’t accurate”, but it isn’t denying that stores will be closed either…

In an email to USA Today, Sears spokesman Howard Riefs said the store count and closures “isn’t accurate,” but did not provide store closures or layoff numbers.

“As we stated in our (second quarter earnings report), we disclosed that we would be closing unprofitable stores as leases expire and in some cases will accelerate closings when it is economically prudent. And that we would consider closing additional stores during the remainder of the year,” Riefs said. “Make no mistake, we believe the store will continue to play an integral role in our transformation, however, if a store is not generating a profit, it is straightforward that the store should be considered for closure.”

No matter how many stores Sears does end up closing over the next few months, the truth is that our economy is a complete and total mess at this point.

Our politicians and the mainstream media are trying to put a happy face on everything, but the cold, hard numbers prove that we are not anywhere close to where we were prior to the last recession.

Because it is so difficult to find a good job in America today, I often recommend to people that they should consider starting their own businesses.

But thanks to the bureaucratic control freaks in the Obama administration and in our state governments, small business ownership in America today is at an all-time low.  It is almost as if they don’t want the “little guy” to win.  Every avenue of prosperity for the middle class is under assault, and there does not appear to be much hope that this will change any time soon.

And the truly frightening thing is that this is about as good as things are going to get for the middle class.  We are rapidly approaching the next major wave of our long-term economic decline, but that is a topic for a future article.

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