If you had to make a sudden visit to the emergency room, would you have enough money to pay for it without selling something or borrowing the funds from somewhere? Most Americans may not realize this, but this is something that the Federal Reserve has actually been tracking for several years now. And according to the Fed, an astounding 47 percent of all Americans could not come up with $400 to pay for an emergency room visit without borrowing it or selling something. Various surveys that I have talked about in the past have found that more than 60 percent of all Americans are living to paycheck to paycheck, but I didn’t realize that things were quite this bad for about half the country. If you can’t even come up with $400 for an unexpected emergency room visit, then you are just surviving from month to month by the skin of your teeth. Unfortunately, about half of us are currently in that situation.
Earlier today someone pointed me toward an excellent article in The Atlantic that discussed this, and I have to admit that The Atlantic is one of the last remaining bastions of old school excellence in journalism that you will find in the mainstream media. Of course I don’t see eye to eye with them on a lot of things philosophically, but there are some really hard working journalists over there.
The article where I found the 47 percent figure comes from The Atlantic, and it is entitled “The Secret Shame of Middle-Class Americans“. It was authored by Neal Gabler, and he says that he can identify with the 47 percent of Americans that don’t have $400 for an unexpected emergency room visit because he is one of them…
I know what it is like to have to juggle creditors to make it through a week. I know what it is like to have to swallow my pride and constantly dun people to pay me so that I can pay others. I know what it is like to have liens slapped on me and to have my bank account levied by creditors. I know what it is like to be down to my last $5—literally—while I wait for a paycheck to arrive, and I know what it is like to subsist for days on a diet of eggs. I know what it is like to dread going to the mailbox, because there will always be new bills to pay but seldom a check with which to pay them. I know what it is like to have to tell my daughter that I didn’t know if I would be able to pay for her wedding; it all depended on whether something good happened. And I know what it is like to have to borrow money from my adult daughters because my wife and I ran out of heating oil.
To me, this is yet more evidence that the middle class in America is dying.
Last year, it was reported that middle class Americans make up a minority of the population for the very first time in our history.
But back in 1971, 61 percent of all Americans lived in middle class households.
So what happened?
Well, the big corporations started shipping millions of good paying manufacturing jobs overseas. Millions of other good paying jobs were replaced by technology, and the competition for the good jobs that remained became extremely intense.
During the good times, the U.S. economy still created new jobs, but most of those jobs were low paying service jobs.
At this point, a majority of American workers have jobs that would be considered low paying. In fact, 51 percent of all American workers make less than $30,000 a year according to the Social Security Administration.
And once you account for inflation, the truth is that our incomes have been going down for years. According to a study that was released by Pew Charitable Trusts, median household income in the United States decreased by 13 percent between 2004 and 2014.
That isn’t “progress” any way that you slice it.
If you go all the way back to 1970, the middle class took home approximately 62 percent of all income in the United States.
Today, that number has fallen to just 43 percent.
So the fact that 47 percent of Americans can’t even pay for an unexpected emergency room visit is not exactly a surprise. To be honest, a whole host of other surveys have come up with similar numbers. Here is more from Neal Gabler…
A 2014 Bankrate survey, echoing the Fed’s data, found that only 38 percent of Americans would cover a $1,000 emergency-room visit or $500 car repair with money they’d saved. Two reports published last year by the Pew Charitable Trusts found, respectively, that 55 percent of households didn’t have enough liquid savings to replace a month’s worth of lost income, and that of the 56 percent of people who said they’d worried about their finances in the previous year, 71 percent were concerned about having enough money to cover everyday expenses.
What all of these numbers tell us is that the middle class is disappearing. I tend to compare it to a game of really bizarre musical chairs. With each passing month more chairs are being pulled out of the circle, and those members of the middle class that haven’t fallen into poverty yet are just hoping that a chair will still be there for them when the music stops.
Even during the “Obama recovery”, we have seen poverty in America absolutely explode. In fact, some brand new numbers just came out that are quite startling. The following comes from another author for The Atlantic named Gillian B. White…
Recently, the Brookings Institution published a report looking at the same idea but giving it a different name. The paper, builds on research from the British economist William Beveridge, who in 1942 proposed five types of poverty: squalor, ignorance, want, idleness, and disease. In modern terms, these could be defined as poverty related to housing, education, income, employment, and healthcare, respectively. Analyzing the 2014 American Community Survey, the paper’s co-authors, Richard Reeves, Edward Rodrigue, and Elizabeth Kneebone, found that half of Americans experience at least one of these types of poverty, and around 25 percent suffer from at least two.
To underscore this point, let me just run five quick facts about the growth of poverty in this country by you…
–The number of Americans that are living in concentrated areas of high poverty has doubled since the year 2000.
–In 2007, about one out of every eight children in America was on food stamps. Today, that number is one out of every five.
–46 million Americans use food banks each year, and lines start forming at some U.S. food banks as early as 6:30 in the morning because people want to get something before the food supplies run out.
–The number of homeless children in the U.S. has increased by 60 percent over the past six years.
–According to Poverty USA, 1.6 million American children slept in a homeless shelter or some other form of emergency housing last year.
That last number really gets me every time.
How can “the wealthiest and most powerful nation on the planet” have more than a million homeless children?
This is one of the reasons why I hammer on our ongoing economic collapse over and over and over. It is affecting real families with real children that have real hopes and real dreams.
This is not the way our country is supposed to work.
It is supposed to be “the land of opportunity”.
It is supposed to be a place where anyone can live “the American Dream”.
But instead it has become an economic wasteland where the largest and most prosperous middle class in the history of the world is being systematically eviscerated.
So no, the U.S. economy is not doing “just fine” – anyone that tries to tell you that lie is simply peddling fiction.
*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*
Barack Obama recently stated that anyone that is claiming that America’s economy is in decline is “peddling fiction“. Well, if the economy is in such great shape, why are major retailers shutting down hundreds of stores all over the country? Last month, I wrote about the “retail apocalypse” that is sweeping the nation, but since then it has gotten even worse. Closing stores has become the “hot new trend” in the retail world, and “space available” signs are going up in mall windows all over the United States. Barack Obama can continue huffing and puffing about how well the middle class is doing all he wants, but the truth is that the cold, hard numbers that retailers are reporting tell an entirely different story.
Earlier today, Sears Chairman Eddie Lampert released a letter to shareholders that was filled with all kinds of bad news. In this letter, he blamed the horrible results that Sears has been experiencing lately on “tectonic shifts” in consumer spending…
In a letter to shareholders on Thursday, Lampert said the impact of “tectonic shifts” in consumer spending has spread more broadly in the last year to retailers “that had previously proven to be relatively immune to such shifts.”
“Walmart, Nordstrom, Macy’s, Staples, Whole Foods and many others have felt the impact of disruptive changes from online competition and new business models,” Lampert wrote.
And it is very true – Sears is doing horribly, but they are far from alone. The following are 13 major retailers that are closing down stores…
#1 Sears lost 580 million dollars in the fourth quarter of 2015 alone, and they are scheduled to close at least 50 more “unprofitable stores” by the end of this year.
#2 It is being reported that Sports Authority will file for bankruptcy in March. Some news reports have indicated that around 200 stores may close, but at this point it is not known how many of their 450 stores will be able to stay open.
#3 For decades, Kohl’s has been growing aggressively, but now it plans to shutter 18 stores in 2016.
#4 Target has just finished closing 13 stores in the United States.
#5 Best Buy closed 30 stores last year, and it says that more store closings are likely in the months to come.
#6 Office Depot plans to close a total of 400 stores by the end of 2016.
The next seven examples come from one of my previous articles…
#7 Wal-Mart is closing 269 stores, including 154 inside the United States.
#8 K-Mart is closing down more than two dozen stores over the next several months.
#9 J.C. Penney will be permanently shutting down 47 more stores after closing a total of 40 stores in 2015.
#10 Macy’s has decided that it needs to shutter 36 stores and lay off approximately 2,500 employees.
#11 The Gap is in the process of closing 175 stores in North America.
#12 Aeropostale is in the process of closing 84 stores all across America.
#13 Finish Line has announced that 150 stores will be shutting down over the next few years.
These store closings can be particularly cruel for small towns. Just consider the impact that Wal-Mart has had on the little town of Oriental, North Carolina…
The Town’n Country grocery in Oriental, North Carolina, a local fixture for 44 years, closed its doors in October after a Wal-Mart store opened for business. Now, three months later — and less than two years after Wal-Mart arrived — the retail giant is pulling up stakes, leaving the community with no grocery store and no pharmacy.
Though mom-and-pop stores have steadily disappeared across the American landscape over the past three decades as the mega chain methodically expanded, there was at least always a Wal-Mart left behind to replace them. Now the Wal-Marts are disappearing, too.
Of course there are many factors involved in this ongoing retail apocalypse. Competition from online retailers is becoming more intense, and consumer spending patterns are rapidly changing.
But in the end, the truth is that you can’t get blood out of a rock. The middle class in America is shrinking, and there just isn’t as much discretionary spending going on as there used to be.
And now that we have entered a new economic downturn, many retailers are finding that there are some local communities that can no longer support their stores. The following comes from CNBC…
Though the shift to online shopping is no doubt playing a role in lighter foot traffic at malls, there’s more to their changing economics than the rise of Amazon. Changing demographics in a town are another reason a shopping center could struggle or fail — for example, if massive layoffs in a particular industry cause people to move away to find employment.
“A lot of people want to try and tie it to the Internet or ‘that’s not cool,’ or teens don’t like it,” Jesse Tron, a spokesman for industry trade group International Council of Shopping Centers, told CNBC last year. “It’s hard to support large-format retail in those suburban areas when people are trying to just pay their mortgage.”
In order to have a thriving middle class, we need good paying middle class jobs. Unfortunately, our economy has been bleeding those kinds of jobs quite rapidly. For example, Halliburton just announced that it is eliminating 5,000 more jobs after getting rid of 4,000 workers at the end of last year.
During the Obama years, good paying middle class jobs have been getting replaced by low paying service jobs. At this point, 51 percent of all American workers make less than $30,000 a year.
And there is no way that you can support a middle class family with children on $30,000 a year.
We have an economy that is in the process of failing. We can see it in the explosion of subprime auto loans that are going bad, we can see it in the hundreds of retail stores that are shutting down, and we can see it in the tens of thousands of good paying energy jobs that are being lost.
During the Obama years, interest rates have been pushed to the floor, the Federal Reserve has created trillions of dollars out of thin air, and the size of our national debt is getting close to doubling. Despite all of those desperate measures, our economy continues to crumble.
We stole from the future to try to paper over our failures and it didn’t work. Now an economic downturn that will ultimately turn out to be even worse than the “Great Recession” of 2008 and 2009 has begun, and our leaders have absolutely no idea how to fix things.
I wish I had better news to report, but I don’t. Get prepared now, because very rough times are ahead.
The world didn’t completely fall apart in 2015, but it is undeniable that an immense amount of damage was done to the U.S. economy. This year the middle class continued to deteriorate, more Americans than ever found themselves living in poverty, and the debt bubble that we are living in expanded to absolutely ridiculous proportions. Toward the end of the year, a new global financial crisis erupted, and it threatens to completely spiral out of control as we enter 2016. Over the past six months, I have been repeatedly stressing to my readers that so many of the exact same patterns that immediately preceded the financial crisis of 2008 are happening once again, and trillions of dollars of stock market wealth has already been wiped out globally. Some of the largest economies on the entire planet such as Brazil and Canada have already plunged into deep recessions, and just about every leading indicator that you can think of is screaming that the U.S. is heading into one. So don’t be fooled by all the happy talk coming from Barack Obama and the mainstream media. When you look at the cold, hard numbers, they tell a completely different story. The following are 58 facts about the U.S. economy from 2015 that are almost too crazy to believe…
#1 These days, most Americans are living paycheck to paycheck. At this point 62 percent of all Americans have less than 1,000 dollars in their savings accounts, and 21 percent of all Americans do not have a savings account at all.
#2 The lack of saving is especially dramatic when you look at Americans under the age of 55. Incredibly, fewer than 10 percent of all Millennials and only about 16 percent of those that belong to Generation X have 10,000 dollars or more saved up.
#3 It has been estimated that 43 percent of all American households spend more money than they make each month.
#4 For the first time ever, middle class Americans now make up a minority of the population. But back in 1971, 61 percent of all Americans lived in middle class households.
#5 According to the Pew Research Center, the median income of middle class households declined by 4 percent from 2000 to 2014.
#6 The Pew Research Center has also found that median wealth for middle class households dropped by an astounding 28 percent between 2001 and 2013.
#7 In 1970, the middle class took home approximately 62 percent of all income. Today, that number has plummeted to just 43 percent.
#8 There are still 900,000 fewer middle class jobs in America than there were when the last recession began, but our population has gotten significantly larger since that time.
#9 According to the Social Security Administration, 51 percent of all American workers make less than $30,000 a year.
#10 For the poorest 20 percent of all Americans, median household wealth declined from negative 905 dollars in 2000 to negative 6,029 dollars in 2011.
#11 A recent nationwide survey discovered that 48 percent of all U.S. adults under the age of 30 believe that “the American Dream is dead”.
#12 Since hitting a peak of 69.2 percent in 2004, the rate of homeownership in the United States has been steadily declining every single year.
#13 At this point, the U.S. only ranks 19th in the world when it comes to median wealth per adult.
#14 Traditionally, entrepreneurship has been one of the primary engines that has fueled the growth of the middle class in the United States, but today the level of entrepreneurship in this country is sitting at an all-time low.
#15 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.
#16 If you can believe it, the 20 wealthiest people in this country now have more money than the poorest 152 million Americans combined.
#17 The top 0.1 percent of all American families have about as much wealth as the bottom 90 percent of all American families combined.
#18 If you have no debt and you also have ten dollars in your pocket, that gives you a greater net worth than about 25 percent of all Americans.
#19 The number of Americans that are living in concentrated areas of high poverty has doubled since the year 2000.
#20 An astounding 48.8 percent of all 25-year-old Americans still live at home with their parents.
#21 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, and nearly 47 million Americans are living in poverty right now.
#22 In 2007, about one out of every eight children in America was on food stamps. Today, that number is one out of every five.
#23 According to Kathryn J. Edin and H. Luke Shaefer, the authors of a new book entitled “$2.00 a Day: Living on Almost Nothing in America“, there are 1.5 million “ultrapoor” households in the United States that live on less than two dollars a day. That number has doubled since 1996.
#24 46 million Americans use food banks each year, and lines start forming at some U.S. food banks as early as 6:30 in the morning because people want to get something before the food supplies run out.
#25 The number of homeless children in the U.S. has increased by 60 percent over the past six years.
#26 According to Poverty USA, 1.6 million American children slept in a homeless shelter or some other form of emergency housing last year.
#27 Police in New York City have identified 80 separate homeless encampments in the city, and the homeless crisis there has gotten so bad that it is being described as an “epidemic”.
#28 If you can believe it, more than half of all students in our public schools are poor enough to qualify for school lunch subsidies.
#29 According to a Census Bureau report that was released a while back, 65 percent of all children in the U.S. are living in a home that receives some form of aid from the federal government.
#30 According to a report that was published 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”.
#31 When it comes to child poverty, the United States ranks 36th out of the 41 “wealthy nations” that UNICEF looked at.
#32 An astounding 45 percent of all African-American children in the United States live in areas of “concentrated poverty”.
#33 40.9 percent of all children in the United States that are being raised by a single parent are living in poverty.
#34 There are 7.9 million working age Americans that are “officially unemployed” right now and another 94.4 million working age Americans that are considered to be “not in the labor force”. When you add those two numbers together, you get a grand total of 102.3 million working age Americans that do not have a job right now.
#35 According to a recent Pew survey, approximately 70 percent of all Americans believe that “debt is a necessity in their lives”.
#36 53 percent of all Americans do not even have a minimum three-day supply of nonperishable food and water at home.
#37 According to John Williams of shadowstats.com, if the U.S. government was actually using honest numbers the unemployment rate in this nation would be 22.9 percent.
#38 Back in 1950, more than 80 percent of all men in the United States had jobs. Today, only about 65 percent of all men in the United States have jobs.
#39 The labor force participation rate for men has plunged to the lowest level ever recorded.
#40 Wholesale sales in the U.S. have fallen to the lowest level since the last recession.
#41 The inventory to sales ratio has risen to the highest level since the last recession. This means that there is a whole lot of unsold inventory that is just sitting around out there and not selling.
#42 The ISM manufacturing index has fallen for five months in a row.
#43 Orders for “core” durable goods have fallen for ten months in a row.
#44 Since March, the amount of stuff being shipped by truck, rail and air inside the United States has been falling every single month on a year over year basis.
#45 Wal-Mart is projecting that its earnings may fall by as much as 12 percent during the next fiscal year.
#46 The Business Roundtable’s forecast for business investment in 2016 has dropped to the lowest level that we have seen since the last recession.
#47 Corporate debt defaults have risen to the highest level that we have seen since the last recession. This is a huge problem because corporate debt in the U.S. has approximately doubled since just before the last financial crisis.
#48 Holiday sales have gone negative for the first time since the last recession.
#49 The velocity of money in the United States has dropped to the lowest level ever recorded. Not even during the depths of the last recession was it ever this low.
#50 Barack Obama promised that his program would result in a decline in health insurance premiums by as much as $2,500 per family, but in reality average family premiums have increased by a total of $4,865 since 2008.
#51 Today, the average U.S. household that has at least one credit card has approximately $15,950 in credit card debt.
#52 The number of auto loans that exceed 72 months has hit at an all-time high of 29.5 percent.
#53 According to Dr. Housing Bubble, there have been “nearly 8 million homes lost to foreclosure since the homeownership rate peaked in 2004″.
#54 One very disturbing study found that approximately 41 percent of all working age Americans either currently have medical bill problems or are paying off medical debt. And collection agencies seek to collect unpaid medical bills from about 30 million of us each and every year.
#55 The total amount of student loan debt in the United States has risen to a whopping 1.2 trillion dollars. If you can believe it, that total has more than doubled over the past decade.
#56 Right now, there are approximately 40 million Americans that are paying off student loan debt. For many of them, they will keep making payments on this debt until they are senior citizens.
#57 When you do the math, the federal government is stealing more than 100 million dollars from future generations of Americans every single hour of every single day.
#58 An astounding 8.16 trillion dollars has already been added to the U.S. national debt while Barack Obama has been in the White House. That means that it is already guaranteed that we will add an average of more than a trillion dollars a year to the debt during his presidency, and we still have more than a year left to go.
What we have seen so far is just the very small tip of a very large iceberg. About six months ago, I stated that “our problems will only be just beginning as we enter 2016″, and I stand by that prediction.
We are in the midst of a long-term economic collapse that is beginning to accelerate once again. Our economic infrastructure has been gutted, our middle class is being destroyed, Wall Street has been transformed into the biggest casino in the history of the planet, and our reckless politicians have piled up the biggest mountain of debt the world has ever seen.
Anyone that believes that everything is “perfectly fine” and that we are going to come out of this “stronger than ever” is just being delusional. This generation was handed the keys to the finest economic machine of all time, and we wrecked it. Decades of incredibly foolish decisions have culminated in a crisis that is now reaching a crescendo, and this nation is in for a shaking unlike anything that it has ever seen before.
So enjoy the rest of 2015 while you still can.
2016 is almost here, and it is going to be quite a year…
What you are about to see is more evidence that the growth of poverty in the United States is wildly out of control. It turns out that there is a tremendous amount of suffering in “the wealthiest nation on the planet”, and it is getting worse with each passing year. During this election season, politicians of all stripes are running around telling all of us how great we are, but is that really true? As you will see below, poverty is reaching unprecedented levels in this country, and the middle class is steadily dying. There aren’t enough good jobs to go around, dependence on the government has never been greater, and it is our children that are being hit the hardest. If we have this many people living on the edge of despair now, while times are “good”, what are things going to look like when our economy really starts falling apart? The following are 21 facts about the explosive growth of poverty in America that will blow your mind…
#1 The U.S. Census Bureau says that nearly 47 million Americans are living in poverty right now.
#2 Other numbers from the U.S. Census Bureau are also very disturbing. For example, in 2007 about one out of every eight children in America was on food stamps. Today, that number is one out of every five.
#3 According to Kathryn J. Edin and H. Luke Shaefer, the authors of a new book entitled “$2.00 a Day: Living on Almost Nothing in America“, there are 1.5 million “ultrapoor” households in the United States that live on less than two dollars a day. That number has doubled since 1996.
#4 46 million Americans use food banks each year, and lines start forming at some U.S. food banks as early as 6:30 in the morning because people want to get something before the food supplies run out.
#5 The number of homeless children in the U.S. has increased by 60 percent over the past six years.
#6 According to Poverty USA, 1.6 million American children slept in a homeless shelter or some other form of emergency housing last year.
#7 Police in New York City have identified 80 separate homeless encampments in the city, and the homeless crisis there has gotten so bad that it is being described as an “epidemic”.
#8 If you can believe it, more than half of all students in our public schools are poor enough to qualify for school lunch subsidies.
#9 According to a Census Bureau report that was released a while back, 65 percent of all children in the U.S. are living in a home that receives some form of aid from the federal government.
#10 According to a report that was published 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”.
#11 When it comes to child poverty, the United States ranks 36th out of the 41 “wealthy nations” that UNICEF looked at.
#12 The number of Americans that are living in concentrated areas of high poverty has doubled since the year 2000.
#13 An astounding 45 percent of all African-American children in the United States live in areas of “concentrated poverty”.
#14 40.9 percent of all children in the United States that are being raised by a single parent are living in poverty.
#15 An astounding 48.8 percent of all 25-year-old Americans still live at home with their parents.
#16 There are simply not enough good jobs to go around anymore. It may be hard to believe, but 51 percent of all American workers make less than $30,000 a year.
#17 There are 7.9 million working age Americans that are “officially unemployed” right now and another 94.7 million working age Americans that are considered to be “not in the labor force”. When you add those two numbers together, you get a grand total of 102.6 million working age Americans that do not have a job right now.
#18 Owning a home has traditionally been a signal that you belong to the middle class. That is why it is so alarming that the rate of homeownership in the United States has been falling for eight years in a row.
#19 According to a recent Pew survey, approximately 70 percent of all Americans believe that “debt is a necessity in their lives”.
#20 At this point, 25 percent of all Americans have a negative net worth. That means that the value of what they owe is greater than the value of everything that they own.
#21 The top 0.1 percent of all American families have about as much wealth as the bottom 90 percent of all American families combined.
If we truly are “the greatest nation on the planet”, then why can’t we even take care of our own people?
Why are there tens of millions of us living in poverty?
Perhaps we really aren’t so great after all.
It would be one thing if economic conditions were getting better and poverty was in decline. At least then we could be talking about the improvement we were making. But despite the fact that we are stealing more than a hundred million dollars from future generations of Americans every single hour of every single day, poverty just continues to grow like an aggressive form of cancer.
So what is wrong?
Why can’t we get this thing fixed?
Tell us what you think we should do as a nation to solve this problem by posting a comment below…
Are you in better shape financially than you were last Thanksgiving? If so, you should consider yourself to be very fortunate because most Americans are not. As you chow down on turkey, stuffing and cranberry sauce this Thursday, please remember that there are millions of Americans that simply cannot afford to eat such a meal. According to a shocking new report that was just released by the National Center on Family Homelessness, the number of homeless children in the U.S. has reached a new all-time high of 2.5 million. And right now one out of every seven Americans rely on food banks to put food on the table. Yes, life is very good at the moment for Americans at the top end of the income spectrum. The stock market has been soaring and sales of homes worth at last a million dollars are up 16 percent so far this year. But most Americans live in a very different world. The percentage of Americans that are employed is about the same as it was during the depths of the last recession, the quality of our jobs continues to go down, the rate of homeownership in America has fallen for seven years in a row, and the cost of living is rising much faster than paychecks are. As a result, the middle class is smaller this Thanksgiving than it was last Thanksgiving, and most Americans have seen their standards of living go down over the past year.
In 2014, there are tens of millions of Americans that are anonymously leading lives of quiet desperation. They are desperately trying to hold on even though things just keep getting worse. For example, just consider the plight of 49-year-old Darrell Eberhardt. Once upon a time, his job in a Chevy factory paid him $18.50 an hour, but now he only makes $10.50 an hour and he knows that he probably would not be able to make as much in a new job if he decided to leave…
For nearly 20 years, Darrell Eberhardt worked in an Ohio factory putting together wheelchairs, earning $18.50 an hour, enough to gain a toehold in the middle class and feel respected at work.
He is still working with his hands, assembling seats for Chevrolet Cruze cars at the Camaco auto parts factory in Lorain, Ohio, but now he makes $10.50 an hour and is barely hanging on. “I’d like to earn more,” said Mr. Eberhardt, who is 49 and went back to school a few years ago to earn an associate’s degree. “But the chances of finding something like I used to have are slim to none.”
Of course you can’t support a family on $10.50 an hour.
You can barely support one person on $10.50 an hour.
But there are many men out there that would absolutely love to switch positions with Darrell Eberhardt. At this point, one out of every six men in their prime working years (25 to 54) does not have a job. That is an absolutely crazy number.
And of course just because you “have a job” does not mean that things are going well. The number of Americans that are “working part-time involuntarily” has risen by over 50 percent since the beginning of the last recession. There are millions of hard working Americans that would love to get a full-time job if they could land one. But these days “decent jobs” are in short supply.
For example, CNN recently profiled the story of college graduate Meghan Brachle…
Meghan would love to be a music teacher or play full-time in an orchestra. She studied music at Loyola University in New Orleans and plays the flute.
Instead, Meghan works a slew of part-time jobs and receives no benefits.
She is a cashier at Whole Foods, a substitute teacher, a flute tutor and an administrative assistant at a non-profit.
Even with all of her hard work, Brachle and her husband often really struggle to pay the bills…
With inconsistent hours, Meghan monthly income fluctuates between $1,000 and $3,000. Even with her husband’s teaching salary, the couple sometimes struggles to cover the $3,600 of monthly expenses they have.
“It’s very stressful,” Meghan, a college graduate, says. “I think about all the job applications I’ve turned in and all the interviews I’ve been on and all the other people who are in the same situation, looking for those same [full-time] jobs. It’s frustrating.”
Sadly, a lot of these part-time employers know that their employees desperately need these jobs and are using that leverage to treat them very poorly.
For example, it is being reported that any KMart employees that do not show up for work on Thanksgiving will be automatically fired.
What kind of nonsense is that?
And around the country at Wal-Mart stores, food drives are being held for “needy employees“.
So why wouldn’t Wal-Mart just pay their workers enough so that they could afford to take care of themselves in the first place?
Most people don’t realize this, but approximately one out of every four part-time workers in America is currently living below the poverty line. Many of them are working as hard as they can and still can’t make enough to take care of themselves.
Meanwhile, our paychecks are getting stretched further and further with each passing month.
When you don’t make much money, every dollar is precious. And when food prices go up substantially, it can be very painful. Unfortunately, that is precisely what is happening right now…
-From September to October, the price of a pound of Turkey rose from $1.58 to $1.66. That represents a 5.2 percent price increase in just one month.
-The price of a pound of ground beef has just risen to a brand new record high of $4.15 a pound, and more price increases are on the way. The U.S. Department of Agriculture is projecting that U.S. beef production will drop by another 1 billion pounds next year due to a variety of factors including the horrific multi-year drought out west.
-The entire planet is bracing for a huge chocolate shortage, and this threatens to push the price of chocolate beyond the reach of many American families…
Start hoarding those Hershey’s Kisses and stockpile your Snickers: The world could soon experience a chocolate shortage.
Mars Inc. and Barry Callebaut, two of the world’s largest chocolate makers, say that’s the path we’re headed down. They cite a perfect storm of factors: Less cocoa is being produced as more and more people are devouring chocolate.
In 2013, consumers ate about 70,000 metric tons more cocoa than was produced, The Washington Post reports, and that deficit could go up to 1 million metric tons by 2020. The Ivory Coast and Ghana produce more than 70 percent of the world’s cacao beans, and both countries are experiencing dry weather that limits growth. To make things worse, a fungal disease called frosty pod has destroyed 30 to 40 percent of global cocoa production.
As a result of all of the things that I have just discussed above, more Americans than ever are being forced to turn to the government for assistance. Today, the number of Americans getting a check from the government each month is at an all-time high, and at this point Americans collectively get more money from the government than they pay in taxes. For much, much more on this, please see my recent article entitled “21 Facts That Prove That Dependence On The Government Is Out Of Control In America“.
So if things are going well for you this Thanksgiving, you should be truly thankful.
For most of the country, things just continue to get even worse. And if the next major wave of our economic crisis arrives next year like many are projecting, this may just be the beginning of our economic pain.
We 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?…
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…
Thanks to the Federal Reserve, the middle class is slowly being suffocated by rising food prices. Every single dollar in your wallet is constantly becoming less valuable because of the inflation the Fed systematically creates. And if you try to build wealth by saving money and earning interest on it, you still lose because thanks to the Federal Reserve’s near zero interest rate policies banks pay next to nothing on savings accounts. The Federal Reserve wants you to either spend your money or to put it in the giant casino that we call the stock market. But when Americans spend their paychecks they are finding that they don’t stretch as far as they once did. The cost of living continues to rise at a much faster pace than wages are rising, and this is especially true when it comes to the price of food.
Someone that I know wrote to me today and let me know that she had to shut down the food pantry that she had been running for the poor for so many years. It isn’t that she didn’t want to help the poor anymore. It was that she just couldn’t deal with the rising food prices any longer. Now she is just doing the best that she can to survive herself.
Perhaps you have also noticed that food prices have gotten pretty crazy lately. In particular, meat prices have become absolutely obscene. For example, the average price of ground beef has risen to a new record high of over $4.09 a pound. Over the past twelve months, that works out to a whopping 17 percent increase…
The average price for a pound of ground beef climbed to another record high–$4.096 per pound–in the United States in September, according to data released today by the Bureau of Labor Statistics (BLS).
In August, according to BLS, the average price for a pound of all types of ground beef topped $4 for the first time–hitting $4.013. In September, the average price jumped .083 cents, an increase of 2.1 percent in one month.
A year ago, in September 2013, the average price for a pound of ground beef was $3.502 per pound. Since then, it has climbed 59.4 cents–or about 17 percent in one year.
The “intellectuals” over at the Federal Reserve insist that “a little bit of inflation” is good for an economy, but the truth is that inflation slowly robs us of our buying power.
In a previous article, I shared a chart that showed how food inflation has risen dramatically since the year 2000. For this article, I wanted to show how food inflation has risen since the 1970s. As you can see, the rise in food prices has been absolutely relentless for more than 40 years…
If our paychecks were going up at the same rate or even faster that would be okay.
But they aren’t.
In fact, CNN is reporting that our paychecks have fallen back to 1995 levels…
Americans also don’t feel any better off. While more people may have jobs, they aren’t bringing home fatter paychecks. Wages and income have remained stagnant for years, making it tough for folks even though inflation is low. Median household income, which stood at $51,939 last year, is back to 1995 levels.
Consumers expect a median income boost of 1.1% over the next year, Curtin said. But that won’t keep up with their inflation expectations of 2.8%.
“American households, on average, are still struggling with their living standards slowly eroding,” he said.
This is one of the primary reasons why the middle class is disappearing in America.
The purchasing power of our dollars is continually diminishing.
And this could be just the beginning. Right now, severe drought is affecting some of the most important agricultural areas around the globe. Most people are aware of the nightmarish drought in California, but did you know that things in Brazil are even worse? Brazil is one of the most important food exporters in the world, and so they definitely need our prayers.
In addition, a “black swan event” such as a worldwide explosion of the Ebola pandemic could quickly drive food prices into the stratosphere.
Just this week, we learned that food prices in the Ebola-stricken regions of Liberia, Guinea and Sierra Leone have already risen by an average of 24 percent…
Infection rates in the food-producing zones of Kenema and Kailahun in Sierra Leone, Lofa and Bong County in Liberia and GuDeckDedou in Guinea are among the highest in the region. Hundreds of farmers have died.
The three governments quarantined districts and restricted movements to contain the virus’ spread. But those measures also disrupted markets and led to food scarcity and panic buying, further pushing up prices, WFP and the Food and Agriculture Organization have said.
“Prices have risen by an average of 24 percent,” said WFP spokeswoman Elisabeth Byrs, adding an assessment of major markets showed the price of basic commodities was rising in Guinea, Liberia and Sierra Leone and in neighboring Senegal.
If you have been storing up food, I think that you will be very happy with your decision in the long run.
Without a doubt, food prices are only going to be going up from here.
But the Federal Reserve continues to insist that inflation is under control.
One of the ways that they make the “official numbers” look good is by playing accounting games. They regularly change the way that inflation is calculated in order keep everyone calm.
You don’t have to take my word for it. Posted below is an excerpt from an article by Mike Bryan, a vice president and senior economist in the Atlanta Fed’s research department…
The Economist retells a conversation with Stephen Roach, who in the 1970s worked for the Federal Reserve under Chairman Arthur Burns. Roach remembers that when oil prices surged around 1973, Burns asked Federal Reserve Board economists to strip those prices out of the CPI “to get a less distorted measure. When food prices then rose sharply, they stripped those out too—followed by used cars, children’s toys, jewellery, housing and so on, until around half of the CPI basket was excluded because it was supposedly ‘distorted'” by forces outside the control of the central bank. The story goes on to say that, at least in part because of these actions, the Fed failed to spot the breadth of the inflationary threat of the 1970s.
I have a similar story. I remember a morning in 1991 at a meeting of the Federal Reserve Bank of Cleveland’s board of directors. I was welcomed to the lectern with, “Now it’s time to see what Mike is going to throw out of the CPI this month.” It was an uncomfortable moment for me that had a lasting influence. It was my motivation for constructing the Cleveland Fed’s median CPI.
I am a reasonably skilled reader of a monthly CPI release. And since I approached each monthly report with a pretty clear idea of what the actual rate of inflation was, it was always pretty easy for me to look across the items in the CPI market basket and identify any offending—or “distorted”—price change. Stripping these items from the price statistic revealed the truth—and confirmed that I was right all along about the actual rate of inflation.
It is all a game to them.
It is all about getting to the “right number” to release to the public.
But anyone that goes to the grocery store knows what has been happening to food prices.
The next time you get to the checkout register and you feel tempted to ask the cashier what organ you should donate to pay for your groceries, please keep in mind that it is not the fault of the cashier.
Instead, there is one entity that you should blame.
Blame the Federal Reserve – their policies are slowly pushing the middle class into oblivion.