The middle class in America is being systematically wiped out, and most people don’t even realize what is happening. Every single year, millions more Americans fall out of the middle class and become dependent on the government. The United States once had the largest and most vibrant middle class in the history of the world, but now the middle class is rapidly shrinking and government dependence is at an all-time high. So why is this happening? Well, America is becoming a poorer nation at the same time that wealth is becoming extremely concentrated at the very top. At this point, our economic system is designed to funnel as much money and power to the federal government and to the big corporations as possible. Individuals and small businesses have a really hard time thriving in this environment. To most big corporations these days, workers are viewed as financial liabilities. Most corporations want to reduce their payrolls as much as possible. You see, the truth is that most corporations want to be just like Apple. If you can believe it, Apple makes $400,000 in profit per employee. Big corporations don’t care that you need to pay the mortgage and provide for your family. Their goal is to make as much money as possible. And most of the control freaks that run our bloated federal government don’t care much about middle class families either. To many politicians and federal bureaucrats, middle class families are “useless eaters” that are constantly damaging the environment with their “excessive” lifestyles. In this day and age, neither the federal government nor the big corporations really have much use for middle class Americans, and that is really, really bad news for the the future of the middle class family in America.
There are three key factors that are constantly chipping away at the middle class….
Labor has become a global commodity, and American workers are often 10 to 20 times as expensive as workers on the other side of the world are. Middle class jobs (such as manufacturing, etc.) have been leaving this country at an astounding pace. Competition for the jobs that remain has become extremely fierce, and this has driven wages down. The following is from a recent article in the New York Times….
But in the last two decades, something more fundamental has changed, economists say. Midwage jobs started disappearing. Particularly among Americans without college degrees, today’s new jobs are disproportionately in service occupations — at restaurants or call centers, or as hospital attendants or temporary workers — that offer fewer opportunities for reaching the middle class.
As paychecks have stagnated, the cost of living has continued to escalate. Middle class families are finding that their paychecks simply do not go nearly as far as they did before. This is creating a tremendous amount of financial stress in households all over America.
Meanwhile, our politicians are taxing the middle class like crazy. Most people only focus on federal and state income taxes, but that is only a small part of the story. As I detailed the other day, our politicians are taxing us in literally dozens of different ways and it is almost always the middle class that ends up getting hit the hardest.
If America wants to be great again, it is going to need a thriving middle class. But right now the federal government and the big corporations are gobbling up all of the power and all of the money and the middle class is shrinking rapidly.
If current trends continue, eventually there will not be much of a middle class left.
The following are 25 signs that middle class families have been targeted for extinction….
#1 Over the past several decades, millions upon millions of middle class Americans have been systematically turned into government dependents. Back in 1960, social welfare benefits made up approximately 10 percent of all salaries and wages. In the year 2000, social welfare benefits made up approximately 21 percent of all salaries and wages. Today, social welfare benefits make up approximately 35 percent of all salaries and wages.
#2 Unemployment is at epidemic levels and the vast majority of the new jobs that have been “created” in recent years have been low paying jobs. Of those Americans that do have a job at this point, one out of every four works a job that pays $10 an hour or less.
#3 The “working poor” is a group that is rapidly growing in this country. If you can believe it, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.
#4 Over the past several decades, the percentage of low income jobs has steadily increased. Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.
#5 The way that our economic system is structured today, almost all of the economic rewards go to the very top of the food chain. The following is how income gains in the United States were distributed during 2010….
-37 percent of all income gains went to the top 0.01 percent of all income earners
-56 percent of all income gains went to the rest of the top 1 percent
-7 percent of all income gains went to the bottom 99 percent
#6 Several decades ago, there was a much more even distribution of income in this country. Back in the 1970s, the top 1 percent of all income earners brought in about 8 percent of all income. Today, they bring in about 21 percent of all income.
#7 As the middle class shrinks, the number of “low income” and “poor” Americans is rapidly rising. Today, approximately 48 percent of all Americans are currently either considered to be “low income” or are living in poverty.
#8 Manufacturing jobs once enabled huge numbers of Americans to enjoy a middle class lifestyle. Unfortunately, those jobs are leaving this country at a breathtaking pace. Back in 1940, 23.4% of all American workers had manufacturing jobs. Today, only 10.4% of all American workers have manufacturing jobs.
#9 In the old days, any man that was willing to work hard and wanted a job could get one. Today, there are millions of American men sitting on their couches at home wondering why nobody will hire them. Back in 1950, more than 80 percent of all men in the United States had jobs. Today, less than 65 percent of all men in the United States have jobs.
#10 The middle class is shrinking at the same time that America is getting poorer as a nation. In the middle of the last century, the United States was #1 in the world in GDP per capita. Today, the United States is #13 in GDP per capita.
#11 Every year now, we see millions of Americans fall out of the middle class. In 2010, 2.6 million more Americans descended into poverty. That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.
#12 The shrinking middle class is having a disproportionate impact on children. At this point, approximately 22 percent of all American children are living in poverty.
#13 In the old days, most Americans grew up in middle class neighborhoods. Sadly, this is no longer true. In 1970, 65 percent of all Americans lived in “middle class neighborhoods”. By 2007, only 44 percent of all Americans lived in “middle class neighborhoods”.
#14 The concentration of wealth at the very top of the food chain is astounding. Right now, over 50 percent of all stocks and bonds are owned by just 1 percent of the U.S. population.
#15 When you concentrate too much power in the hands of the federal government and the big corporations, it is inevitable that massive amounts of wealth will become concentrated in just a few hands. In the United States today, the wealthiest one percent of all Americans have a greater net worth than the bottom 90 percent combined.
#16 There is nothing wrong with making money, but there is something wrong with a game where individuals and small businesses cannot compete fairly. According to Forbes, the 400 wealthiest Americans now have more wealth than the bottom 150 million Americans combined.
#17 When the number of poor people rapidly expands in a society, that is a recipe for social unrest. At this point, the poorest 50 percent of all Americans collectively own just 2.5% of all the wealth in the United States.
#18 The hidden tax of inflation is absolutely devastating middle class families all over America. Since 1970, the U.S. dollar has lost more than 83 percent of its value. Any dollars that middle class families try to save are constantly losing a little bit more value every single day.
#19 American workers that try to play by the rules find that they are constantly fighting a losing battle. According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 dropped by 27 percent after you account for inflation.
#20 In recent years, many middle class families have seen their paychecks get smaller. Median household income in the United States has fallen 7.8 percent since December 2007 after adjusting for inflation.
#21 In recent years, many middle class families have seen many of their basic expenses absolutely soar. For example, health insurance costs have risen by 23 percent since Barack Obama became president.
#22 Just turning on the lights and heating their homes has become a major burden for many middle class families. Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.
#23 Just putting gas in the car has become a major financial ordeal for millions of hard working Americans. The average price of a gallon of gasoline in the United States has increased by more than 100 percent since Barack Obama became president.
#24 Sadly, government dependence is now at an all-time high, and that is the way that many among the elite like it. When Barack Obama took office, there were 32 million Americans on food stamps. Now, there are more than 46 million Americans on food stamps. In particular, an astounding number of children are on food stamps right now. At this point, approximately one-fourth of all American children are enrolled in the food stamp program.
#25 Many middle class families will not be in the middle class for too much longer. According to a shocking new study from the National Bureau of Economic Research, 200,000 U.S. households will use the money from their tax refunds this year “to pay for bankruptcy filing and legal fees“.
Unless major changes are made on a national level, the middle class is going to continue to disappear.
If you are playing the game the way that the system tells you to play it and you expect to live a middle class lifestyle for many years to come there is a good chance that you will be deeply disappointed at some point.
Millions upon millions of Americans have done everything that the system told them to do and the system has still failed them. They got good grades all the way through school, they went to college, they worked really hard, they stayed out of trouble and they gave everything they could to their employers. In spite of all that, millions of hard working families have still lost their jobs and their homes in recent years.
Do not trust that the system will take care of you, and you should not trust that the government will take care of you either.
We don’t need the federal government to hand out more money to everyone. Government handouts are already at record levels and the government is not even coming close to paying for all of this reckless spending.
More government spending is not going to solve any of our problems.
Instead, what we need is an environment where the size and power of the federal government is limited and the size and the power of the big corporations is limited. We need an environment where individuals and small businesses can thrive and compete fairly.
Unfortunately, neither major political party is going to move us in that direction, so there is not much hope for solutions on the national level any time soon.
On an individual level, we can all learn how to prepare for the very difficult years that are coming. It is imperative that we all work to become more independent of the system, because the system could fail at any time.
If you have blind faith that your job will always be there and that the federal government will rescue you if the economy crashes then you are likely to be bitterly disappointed at some point.
The truth is that our economy is slowly dying and the great American middle class is being systematically wiped out.
Many of the things that worked in the past are not going to work any longer.
You can choose to adapt or you can suffer the consequences.
Our world is rapidly changing, and we all need to prepare for what is coming.
Are you better off today than you were four years ago? If not, then you are just like most other Americans. According to a CBS News/New York Times poll that was released a few days ago, 80 percent of Americans say that their financial situation is not “better today” than it was four years ago. But if you turn on the television and listen to what the “pundits” are saying, you would be tempted to think that we were in the midst of a robust economic recovery. You would be tempted to think that the U.S. economy is in great shape and that we are heading for a really bright future. But the fact that the stock market is soaring does not mean much to most Americans. In fact, most Americans couldn’t care less that the Dow is well above 13,000 and that the NASDAQ is above 3,000. What most Americans care about is having a job and being able to provide for their families. If you haven’t paid the mortgage in three months or if you don’t have enough money to take your daughter to go see the doctor it really is not going to matter to you how well the boys and girls over on Wall Street are doing. Right now most American families are doing worse than they were doing four years ago, and no amount of media hype is going to change that fact.
Yes, the stock market is doing really well for the moment, but the truth is that more than 50 percent of all stocks and bonds are owned by just 1 percent of the U.S. population.
Good for them. It looks like the trillions of dollars that the Federal Reserve poured into the big Wall Street banks is really paying off nicely for the financial community.
Meanwhile, much of the rest of the country is deeply suffering.
According to the U.S. Census Bureau, the percentage of Americans living in “extreme poverty” is now sitting at an all-time high.
All across this country poverty is exploding. Food banks are experiencing more demand than ever before and those offering free healthcare are absolutely swamped.
And every single measure of government dependence has gone way up since Barack Obama entered the White House.
For example, since Barack Obama became president the number of Americans on food stamps has gone up by 45 percent.
Just think about that.
At this point the federal government is helping to feed an all-time record 46.5 million Americans every month.
Oh yeah, times are good.
According to the U.S. Census Bureau, 49 percent of all Americans live in a home that receives direct monetary benefits from the federal government.
That is much higher than it has been historically.
For example, back in 1983 less than a third of all Americans lived in a home that received direct monetary benefits from the federal government.
The big problem is that there are simply not enough jobs for everyone.
Listening to the media, you would be tempted to think that the U.S. economy is now pumping out huge numbers of good jobs.
But that is simply not the case.
Right now there are 5.6 million fewer jobs than there were when the last recession began back in late 2007.
So where are the millions of jobs you promised us Obama?
The federal government is trying to convince us that the unemployment rate is going down, but that is not really true.
The key is to look at the percentage of working age Americans that actually have jobs. During the last recession that percentage fell dramatically as you can see from the chart below. After every other recession since World War II the employment to population ratio has always bounced back. But it has not happened this time. Instead, the employment to population ratio has remained between 58 and 59 percent since the end of 2009….
We have not had a jobs recovery. Hopefully we will have one before the next recession hits, but we are running out of time for that.
Tonight there are millions upon millions of hard working Americans that are staring at their television screens and wondering why they can’t find good jobs. The pretty people on television are telling them that the employment situation is getting much better but they can’t find work no matter how hard they try. It is a cruel joke on them.
When Barack Obama entered the White House, the number of “long-term unemployed workers” in the United States was approximately 2.6 million. Today, that number is sitting at 5.6 million.
Thanks for the improvement Obama.
Meanwhile, the average duration of unemployment continues to hover near a record high. Just look at the chart posted below. Does this look like a “jobs recovery” to you?….
But of course Obama and those that support him want to make things sound like they are getting better. They want people to run out and vote for him again in November.
If things are going well for you right now, be thankful, and also remember the millions upon millions of Americans out there that are deeply hurting in this economy.
If you gathered together all of the workers that are “officially” unemployed in the United States at this point into one nation, they would constitute the 68th largest country in the entire world. It would be a nation larger than Greece or Portugal.
That is a lot of people.
Obama promised us that the Wall Street bailouts would make everything better. He promised us that if we poured gigantic mountains of money into Wall Street that it would end up helping “Main Street”.
Well, the last time I looked Goldman Sachs was doing just fine.
How much wealthier do they have to get before they start creating more jobs for the rest of us?
Obama (like most of our politicians) is a complete fraud when it comes to the economy. He is all saddle and no horse. He talks a good game but he doesn’t have any game.
As Wall Street has recovered, the rest of the country has actually been in decline. Median household income in the United States is down 7.8 percent since December 2007 after adjusting for inflation. Millions of American families are reaching the breaking point and millions of other families have already reached it.
Incomes have been declining but the cost of living has not.
For example, health insurance costs have risen by 23 percent since Barack Obama became president.
Has your paycheck increased by 23 percent?
The average price of a gallon of gasoline in the United States has increased by more than 90 percent since Barack Obama became president.
Has your paycheck increased by 90 percent?
Millions of American families have lost their homes while Obama has been president and millions more will soon lose their homes. At this point there are more than 6 million mortgages in the United States that are overdue.
It is a horrible, horrible feeling to know that you can’t pay your mortgage and that you will soon lose your home and your family will be put out on the street.
None of us would ever want to end up in that situation.
And the housing market sure has not shown any signs of recovery under Barack Obama.
Weren’t home prices and home sales supposed to be turning around by now?
Under Barack Obama, new home sales in the United States set a brand new all-time record low in 2009, they set a brand new all-time record low again in 2010, and they set a brand new all-time record low once again during 2011.
That trend is not going in the right direction.
Of course Barack Obama is not solely responsible for the performance of the U.S. economy. Congress should share part of the blame as well, and the Federal Reserve is more responsible for our economic performance than anyone else is.
If you increased your credit card spending by a couple thousand dollars per month would your lifestyle improve? Of course it would. By going into large amounts of debt, it is possible to live a lifestyle that you can’t really afford, at least for a while. But if you keep racking up huge amounts of credit card debt every single month, eventually it gets to a point where it is extremely difficult to even keep up with the minimum monthly payments and the credit card companies will not lend you any more money. Well, on a larger scale it is the same thing with government debt. Right now, the U.S. government is spending more than a trillion dollars more than it takes in every year. Even if the U.S. government spends all of that money on incredibly stupid stuff, it still gets into the pockets of ordinary Americans. In turn, those ordinary Americans use that money to pay the mortgage, buy food, shop at the mall, etc. All of this borrowing and spending by the U.S. government has created a “false prosperity” bubble that is not real. It may feel real to you right now, but it is unsustainable by definition. If the U.S. government suddenly started spending only the money that it actually brought in every year, our economy would be doomed and all of this “false prosperity” would rapidly disappear. But if the U.S. government continues to rack up debt at this pace we are doomed as well. In fact, every dollar that gets borrowed makes our eventual collapse ever worse. We are heading down the exact same road that Greece has gone. Eventually the rest of the world is not going to lend us gigantic mountains of super cheap money anymore. When the flow of cheap money stops, it can be extremely painful. Anyone that has ever seen the interest rates on their credit cards go above 20 percent knows how this feels. If we had addressed these problems as a nation a decade or two ago, perhaps we could have found a solution. But now there is no way out under our current financial system and a devastating economic collapse is on the horizon no matter what we do.
If there was a Hollywood movie where some crooks successfully stole 150 million dollars, what would you think of those crooks?
Would you have admiration for them?
Would you be disgusted with them?
Would you feel like your intelligence was insulted because nobody could ever steal 150 million dollars and get away with it?
Well, right now the federal government is stealing approximately 150 million dollars from our children and our grandchildren every single hour.
That’s right – the U.S. government is borrowing an astounding 150 million dollars an hour that our children and our grandchildren will be expected to deal with.
It is a theft so vast that it is almost unimaginable.
So what should be done?
A lot of people out there think that our problems would be solved if the government would just quit borrowing so much money.
Well, it is just not that simple.
Look at Greece. They were forced by the EU and the IMF to dramatically reduce government spending. But when Greece reduced government spending, that caused the economy to shrink rapidly and it caused tax receipts to go down more than expected. So Greek budget deficits were even larger than anticipated and so Greece was forced to cut spending even more. But that created even more economic problems.
A recent article by John Mauldin described the nightmarish effect that this cycle has had on Greece….
And as Greece began shake and bake its way to “austerity,” the very act of cutting deficits pushed the country into recession, which lowered tax revenues and increased expenses, putting the elusive goal of a balanced budget even further off. We should quickly note that this is not just a Greek problem. Spain’s “draconian” cuts have meant that its 6% deficit target for the year has this week been raised to a more likely 8%, making it harder to get back to even.
For country after country, this is the Endgame. It is the end of the Debt Supercycle. Debt has grown to the size that it cannot be sustained. The market will not lend any more money on terms that can be afforded, and any efforts to cut spending and raise taxes will result in an even worse economy, in various degrees of recession, with falling revenues and rising costs.
This is what happens when a country that has been spending far beyond its means is forced to dramatically cut back.
Those that are convinced that balancing the federal budget in the United States will be relatively painless should take a close look at what is happening in Greece.
As I have written about previously, the Greek economy has been plunged into a 21st century “Great Depression”. In Greece, 20 percent of all retail stores have already shut down, the unemployment rate for those under the age of 24 is sitting at 39 percent, and one third of the entire nation is living in poverty.
And this is only just the beginning for Greece.
Things are going to get even worse.
Unfortunately, many believe that the United States is destined to experience far worse pain than Greece is currently experiencing.
For example, Peter Schiff insists that the United States is in worse financial shape than Europe at this point. Just check out this video….
Anyone that attempts to downplay the U.S. debt problem is making a serious mistake. Yes, we are still able to borrow trillions of dollars for next to nothing, but that is going to come to an end.
Remember all of those “suckers” that signed up for mortgages at “teaser rates” that later got jacked up dramatically?
Of course you do.
So what happened to them?
When the rates went up many of them ended up losing everything.
Well, we have gotten ourselves into the exact same kind of a position. All of this cheap money has enabled us to live very nicely for now, but when the cheap money ends the nightmare will begin.
Right now, our debt is growing much, much faster than our economy is. Between 2007 and 2010, U.S. GDP grew by only 4.26%, but the U.S. national debt soared by 61% during that same time period.
What would your household finances look like if your total debt grew by 61 percent next year but your income only grew by 4 percent?
When I was a little boy, the U.S. national debt was considered to be a huge national crisis. Politicians from both major political parties were promising that they would fix things.
But it is not just the federal government that has been living a fantasy.
The chart posted below shows the growth of total debt in America over the past several decades. Consumers, businesses and government officials have been on a debt binge that is absolutely unprecedented….
The scary thing is that even with all of this borrowed money, our economy is still in the dumps.
So what in the world is it going to look like when the debt bubble totally bursts?
Even with all of this “borrowed prosperity”, anger at the government is rapidly growing. A recent Gallup poll found that “satisfaction with government” in the United States is now at an all-time record low of 29 percent.
So how angry will the American people be when all of this “borrowed prosperity” disappears?
When this whole thing comes tumbling down, a lot of people are going to blame our problems on “capitalism”.
In fact, it is already happening. Just check out what the founder of the World Economic Forum is saying….
“We have a general morality gap, we are over-leveraged, we have neglected to invest in the future, we have undermined social coherence, and we are in danger of completely losing the confidence of future generations,” said Klaus Schwab, host and founder of the annual World Economic Forum.
“Solving problems in the context of outdated and crumbling models will only dig us deeper into the hole.
“We are in an era of profound change that urgently requires new ways of thinking instead of more business-as-usual,” the 73-year-old said, adding that “capitalism in its current form, has no place in the world around us.”
But capitalism is not the problem. Capitalism has produced the greatest eras of prosperity that the world has ever seen.
No, the real problem is our debt-based financial system that is managed and run by the central banks of the world.
You see, debt-based central banking is not capitalism. But way too many people equate the two.
A lot of people cannot even imagine this, but theoretically you could have capitalism without any debt whatsoever.
But what we have today is a financial system that has debt as the very foundation. And such a system is inevitably going to fail someday.
As I have written about so many times before, the Federal Reserve is at the very heart of our economic problems here in the United States.
The Federal Reserve was designed to be a perpetual debt machine. And it has performed that task very well. The U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was first created.
So yes, even though things seem somewhat “stable” for the moment, there are all kinds of reasons to be concerned about the viability of our economy and our financial system in the years ahead.
The other day, I was quoted in a Reuters article about our coming economic problems….
“Most people have a gut feeling that something has gone terribly wrong, but that doesn’t mean that they understand what is happening,” he said. “A lot of Americans sense that a massive economic storm is coming and they want to be prepared for it.”
Of course the Reuters reporter did not even bother to spell my name correctly, but at least he got the quote right.
A great economic storm is coming.
Don’t let this false prosperity and this “calm before the storm” fool you.
We are living in the greatest debt bubble the world has ever seen, and no matter how it plays out there is going to be a massive amount of pain.
You might want to get yourself and your family prepared for that.
Have you ever heard of the dodo bird? Once upon a time, dodo birds lived on the island of Mauritius in the Indian Ocean. But if you go there today you won’t find any because they are extinct. Well, if you are a blue collar worker in America today it looks like you are headed for a similar fate. Blue collar workers are truly becoming an “endangered species” in the United States. In the old days, the balance of power between business owners and labor was more even because they both needed each other. But today that has all changed. Thanks to robotics, automation and computers there is simply not as much of a need for physical laborers anymore and nothing is going to reverse that trend. Big employers will continue to look for ways to replace men with machines, and there is nothing wrong with that. But there is another major trend that is also destroying blue collar jobs in America that we should do something about. Right now, it is perfectly legal for big corporations to shut down manufacturing facilities in the United States and send the jobs over to nations on the other side of the globe where it is legal to pay slave labor wages and where there are barely any regulations. As you will see later on this article, this has been the biggest reason for the shocking blue collar job losses in America over the past decade. The big corporations don’t care that you need to pay the mortgage and put food on the table for your families. All they care about it the bottom line, and if dramatic changes are not made soon, the number of blue collar jobs leaving the United States will continue to increase.
Once upon a time, almost everyone who wanted a job in America could get one. If you go back a few decades, you will find that about 95 percent of all men between the ages of 25 and 54 had a job. Today that figure is struggling to stay above 80 percent.
If you are a blue collar worker in America, you are simply not valued. Your bosses are constantly trying to think of ways to replace you or send your job overseas.
According to Reuters, 23.7 million American workers are either unemployed or underemployed right now. The more “blue collar” you are, the more likely you are to be unemployed. The following chart that shows the unemployment rate during 2010 broken down by level of education comes from the Bureau of Labor Statistics….
If you are an unskilled worker in America today, you simply are not needed. Yes, once upon a time nearly anyone could go out and get a factory job, but those days are over. Neither major political party seems the least bit interested in trying to keep manufacturing jobs in America.
Back in the year 2000, more than 20 percent of all jobs in America were manufacturing jobs. Today, about 5 percent of all jobs in America are manufacturing jobs.
To have that huge of a shift in a little over a decade is absolutely mind blowing.
Many Americans had been hoping that Barack Obama would stand up for the working man like he promised to do. But just like so many of Obama’s other promises, that one was totally worthless as well.
The Obama administration has been pushing hard for even more “free trade” deals that will allow big corporations to ship even more of our jobs out of the country. The Obama administration simply does not value blue collar jobs at all. In fact, U.S. Trade Representative Ron Kirk is running around telling the press that there are lots of things that “we don’t want to make in America” anymore.
If you are a blue collar worker, Barack Obama does not care about you.
He never cared about you.
In fact, the vast majority of the politicians in both major political parties do not care about you.
What they do care about is winning elections and taking care of the big donors that keep helping them win elections.
Many of those donors are systematically shipping huge numbers of our jobs overseas.
In addition, now that labor has become a “global commodity”, wages for the jobs that remain in America are being steadily driven lower.
We were told that the “one world economy” would be great for America, but the truth is that it has only been great for the giant corporations. For the average working man, it has been a disaster.
But we should have all seen this coming. It didn’t take a genius to figure out what was going to happen once you put American workers into the same labor pool as slave laborers on the other side of the world. After all, what greedy corporate executive really wants to pay U.S. workers ten to twenty times as much compensation just because it is the “right” thing to do?
Today, formerly great cities all over America are being transformed into hellholes while shiny, new industrial cities are popping up all over China.
For example, a couple of decades ago the Chinese city of Shenzhen was a sleepy little fishing town.
In 2012, it is a teeming metropolis of over 13 million people.
Foxconn (the builder of iPhones, iPads and many other products that we buy) runs a factory in Shenzhen that employs over 400,000 people. Most of those people work for about a dollar an hour.
A recent article posted on Business Insider described the incredibly long hours and the nightmarish working conditions that those workers must endure. The following is a brief excerpt from that article….
A Chinese working “hour” is 60 minutes–unlike an American “hour,” which generally includes breaks for Facebook, the bathroom, a phone call, and some conversation. The official work day in China is 8 hours long, but the standard shift is 12 hours. Generally, these shifts extend to 14-16 hours, especially when there’s a hot new gadget to build.
At Foxconn, they don’t really care about the health and safety of the workers. Workers are expected to do the same repetitive tasks as rapidly as they can for as long as they can. When their bodies break down, they are fired….
Some workers can no longer work because their hands have been destroyed by doing the same thing hundreds of thousands of times over many years (mega-carpal-tunnel). This could have been avoided if the workers had merely shifted jobs. Once the workers’ hands no longer work, obviously, they’re canned.
But the Obama administration insists that allowing big corporations to ship our jobs over to countries with working conditions like that is “good for the economy”.
Well, it might be good for the profits of the largest corporations, but it is a total nightmare for the rest of us. Just consider the following stats….
*The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.
*Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost.
*In all, more than 56,000 manufacturing facilities in the United States have shut down since 2001.
*According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 dropped by 27 percent after you account for inflation.
*According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades.
Are you starting to get the picture?
If you are a blue collar worker that cannot find a job, it is not because you have failed as a human being.
Rather, the truth is that you cannot find a job because of the failed trade policies of the federal government.
We are experiencing the bitter fruit of a “one world economy”. Globalization was never intended to make the lives of American workers better, and now many are finally waking up and realizing this.
Hopefully, as Americans wake up on these issues they will fight to turn this nation in a more positive direction.
Unfortunately, way too many Americans are giving up hope completely. The following comes from a recent article in the Guardian….
The year 2011 will be remembered as the time when many ever-optimistic Americans began to give up hope. President John F Kennedy once said that a rising tide lifts all boats. But now, in the receding tide, Americans are beginning to see not only that those with taller masts had been lifted far higher, but also that many of the smaller boats had been dashed to pieces in their wake.
As I have written about so many times, we are watching the middle class in America be systematically destroyed.
The economy is not getting better. There may be moments when the economy seems like it is improving, but the reality is that we are mired in a nightmarish long-term decline. If you are not yet convinced of this, please see this article and this article.
Even those running our economy are saying that things are not going to be getting much better any time soon.
For example, the President of the Federal Reserve Bank of Chicago, Charles Evans, recently admitted that the employment picture is not going to be much brighter than it is now by the end of 2012. He recently said that “at the end of the year, we’re not going to be very different from 8.5 percent unemployment.”
And remember – history has shown us that most pronouncements by Federal Reserve officials are usually far too optimistic.
If you are a blue collar worker in America, there is simply not too much to be optimistic about right now.
You might want to think about how you and your family are going to survive without any work.
The millions of jobs that have been sent overseas are not coming back. Even if you still have a decent job, now is the time to be developing a side business or developing other alternative streams of income.
What you don’t want to do is to just sit there and hope that somehow things will “magically” turn around if we just vote in the “right” politician.
If you want to get a really good idea of what is really going on with the U.S. economy right now, just go tour some of the formerly great industrial cities in the “Rust Belt”.
In Cuyahoga County, Ohio one out of every five houses is sitting vacant. It is not that those homes are not needed – it is just that there are not nearly enough people with good jobs available to buy up all of the foreclosures.
So thousands of perfectly good houses are being torn down. The following comes from a recent CBS News report by Scott Pelley….
Across America, recession-fueled foreclosures and plummeting home values have left countless properties abandoned and vulnerable to looting. As Scott Pelley reports, the problem has gotten so bad in Cleveland, Ohio, that county officials have demolished more than 1,000 homes this year – and plan to demolish 20,000 more – rather than let the blight spread and render nearby homes worthless.
Can you imagine that?
20,000 homes being demolished in one county alone?
Of course Detroit is in even worse shape than Cleveland. If you can believe it, the median price of a home in Detroit is now just $6000.
It would be great if I could tell you that hope is just around the corner, but it is not. The plight of the blue collar worker in America is going to get worse and worse.
But just because blue collar workers in America are an endangered species does not mean that you have to be a victim.
We should all seek to become less dependent on the system.
If you are completely and totally dependent on having a “job” (just over broke), then you have put yourself in a very vulnerable position.
That job could disappear at any moment.
Over the next few years, the number of good jobs is going to continue to decrease. Things are going to be really tough. But those that have prepared and that have tried to become more independent are going to be in much better shape than those that have not.
How in the world does the average American family survive in this economy? The median household income is a little bit less than $50,000 a year right now. So let’s call that about $4000 a month. But before any of that money gets spent, you have to take out at least $1000 in taxes. That leaves about $3000 a month to pay all the bills with. With that $3000 you have to pay the mortgage (or rent), make the car payments, make the student loan payments, pay for power and water, pay for health insurance, pay for home insurance, pay for car insurance, pay the phone bill, pay the Internet bill and pay the cable bill. On top of all that, every member of the family needs three meals a day and the cars need to be filled up with gasoline or they won’t go anywhere. Of course I haven’t even mentioned expenses that don’t happen every month such as car repairs or new shoes. No wonder so many families are feeling so financially stressed!
The truth is that American families are getting squeezed harder than they have been in ages. The number of good jobs is declining, incomes are going down, and the cost of living just keeps going up.
The following are 17 facts that prove that the average American family is getting absolutely pulverized by this economy….
#1 The cost of a health insurance policy for the average American family rose by a whopping 9 percent last year. According to a report put out by the Kaiser Family Foundation and the Health Research and Educational Trust, the average family health insurance policy now costs over $15,000 a year.
How in the world can most families afford that? Yes, in many cases employers are paying for at least a portion of that, but still that seems absolutely outrageous.
#2 Due to rising costs, a lot of employers are completely getting rid of health plans for their employees. In fact, the percentage of Americans covered by employer-based health plans has fallen for 11 years in a row.
#3 The number of uninsured Americans continues to rise. Things have gotten so bad that an all-time record 49.9 million Americans do not have any health insurance at all.
#4 At this point, most American families are tapped out financially. According to the U.S. Labor Department, incomes and spending were both down for the second straight year in 2010.
#5 At the same time, the employment picture continues to look worse with each passing month. According to the U.S. Bureau of Labor Statistics, the number of layoffs in the United States was up 14 percent in August.
#6 Even if you do have a job that doesn’t mean that you are doing much more than surviving. According to Paul Osterman, a professor of economics at MIT, approximately 20 percent of all employed Americans are making $10.65 an hour or less.
#7 The amount of debt that the average American family has piled up is absolutely staggering. The median yearly wage in the United States is just $26,261, but the average American household is carrying $75,600 in debt.
#8 Consumer confidence is extremely low right now. If the U.S. economy was in good shape, the Consumer Confidence Index would be up around 90. Instead, it is sitting at 45.4.
#9 Nearly every recent survey shows that the American people are feeling really depressed about the economy right now. In fact, one poll found that 80 percent of them believe that we are actually in a recession right now.
#10 Many consumers are seriously starting to cut back on spending again, and that is not a good sign for the U.S. economy. According to one recent study, 40 percent of all Americans have cut back on their spending within the last 60 days.
#11 It certainly does not help that millions of good jobs have been shipped out of the country. Sadly, the trend of offshoring our jobs is going to continue to accelerate if something is not done. According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades.
#12 There is a lot of fear in the workforce right now. According to Gallup, 30 percent of all employed Americans are worried that they will be laid off soon.
#13 Today, there are 5.9 million Americans between the ages of 25 and 34 that are living with their parents. That is putting an even greater strain on the budgets of many families.
#14 American families have gotten very accustomed to using plastic to pay for things. Today, the average U.S. household has 13 different credit cards.
#15 Many American families are not making it at all in this economy. Last year, 2.6 million more Americans dropped into poverty. That was the largest increase that we have seen since the U.S. government began keeping statistics on this back in 1959.
#16 For many American families, living on food stamps has become a way of life. Today, there are more than 45 million Americans on food stamps and we keep setting a brand new record almost every single month.
#17 Things have gotten so bad that many American families are selling off whatever they can in order to survive. For example, down in Florida hundreds of people have been selling off their burial plots in an attempt to raise cash. The following is an excerpt from a local news report about this new trend….
Sellers are posting online, using burial plot brokers, and also funeral homes to market the real estate. Some of those advertisements show single plots starting at about $1,000, while family plots can go for up to $50,000.
Most American families are living in a state of almost constant financial stress. Way too many parents are spending way too many sleepless nights wondering how in the world they will be able to keep their heads above water for another month.
Very few families seem to have “extra money” for stuff these days. Yeah, there are the “privileged few”, but most people are really struggling to get by.
In America today, if you are able to keep your home from being foreclosed and you are able to put food on the table and clothes on the backs of your family then you are doing pretty good.
Sadly, as our current economic crisis deepens, the average American family is going to have an even more difficult time trying to survive financially.
So do you have any tips to share for how the average American family can survive in this very tough economy? Please feel free to share your ideas and thoughts below….
Has anyone else noticed that the level of stress in this country appears to be extremely high right now? Today, it seems like our federal government, our state governments and most American families live in a constant state of crisis. Everywhere you look there are major problems. Right now everyone is stressed out because of the “debt ceiling deadline”. Earlier this year everyone was freaked out about the possibility of a “government shutdown”. If by some miracle Barack Obama and the Republicans are able to reach a deal in the next few days that will not help the national stress level for long. Another gut-wrenching “national crisis” will almost certainly come along very quickly. Meanwhile, average American families are feeling more stress than ever. There are millions of ordinary Americans that either cannot find jobs or are working as hard as they can and yet cannot seem to pay their mortgages and provide the basics for their families. We are a nation that is really stressed out right now, and as things continue to unravel the level of stress is only going to increase.
Compared to much of the rest of the world, we have an insanely high standard of living, and yet we appear to be some of the most unhappy people on the face of the earth.
Wherever you turn today, someone is popping a pill. The percentage of women taking antidepressants in America is higher than in any other country in the world. Children in the United States are three times more likely to be prescribed antidepressants than children in Europe are.
What in the world is wrong with us?
America is a country that desperately needs to chill out.
Washington D.C. sure is a stressful place right now. Most of our politicians seem to be focused on the 2012 elections rather than on trying to solve our problems.
Most of our leaders are prancing around trying to make themselves look good. Meanwhile, our national financial situation continues to go down the toilet.
One way or another this “debt ceiling crisis” will probably get solved. Our politicians will come up with some sort of a “deal” and it will almost certainly be a bad one.
The sad truth is that the U.S. national debt problem should have been addressed decades ago.
But it wasn’t.
So now we are sitting on a 14 trillion dollar timebomb.
Yes, the ultra-wealthy have become absolute masters at avoiding taxation, but even if some way to tap into their offshore wealth could be found, it still would only put a small dent in the problem.
The truth is that the U.S. government spends way too much money.
U.S. government spending is now above 25 percent of U.S. GDP. That is way above what has been normal during the post-World War II era.
But cutting government spending is not going to fix our system either.
The reality is that our debt-based financial system is designed to trap our federal government in a constantly expanding spiral of debt indefinitely.
The same poll found that 80 percent of Americans believe that it is “difficult” to find a job these days.
In the United States today, there are 14 million unemployed people. Tonight there are huge numbers of Americans that are sitting at home desperately hoping that someone will give them a job. A significant percentage of our population that should be productive is just sitting on the sidelines. Just check out the following quote from a recent CNN article….
Has anyone in Washington noticed that 20% of American men are not working? That’s right. One out of five men in this country are collecting unemployment, in prison, on disability, operating in the underground economy, or getting by on the paychecks of wives or girlfriends or parents. The equivalent number in 1970, according to the McKinsey Global Institute, was 7%.
With numbers like that, how in the world can anyone claim that our economy is healthy?
Sadly, it looks like things may get even worse. As I have written about previously, we are now starting to see another huge wave of layoffs all over the nation.
The employment crisis has a ripple effect throughout the rest of the economy as well.
Without good jobs, Americans cannot buy homes. The housing crash is not going to be fixed until there the employment situation gets fixed.
With lending standards tighter than ever, it takes someone with a good income and a solid employment history to be able to qualify for a home loan.
Unfortunately, there aren’t a whole lot of people like that in the marketplace right now.
So, the housing industry continues to suffer.
Last year was the worst year for new home sales in modern U.S. history. So far, this year is even worse.
It would be really nice if we actually would have an economic recovery, but it just isn’t happening.
Some Americans can handle credit cards, but a lot of them can’t. A staggering 46 percent of Americans do not pay their credit card bills in full each month.
But credit card debt is only one form of debt that is causing stress for American families. The truth is that the total amount of student loan debt is even greater than the total amount of credit card debt. Medical debt is another huge problem. The vast majority of American families are dealing with a debt problem of one form or another. The decades of “easy credit” that we enjoyed are really starting to catch up with us.
Today, the average American household is carrying $75,600 in debt.
That is not a good thing. American consumers are tapped out and the economy is suffering.
As the economy crumbles, many hard working Americans are finding that their lives have radically changed. Just check out the following excerpt from an article posted on a local Connecticut news source….
For 28 years, Cathy Hartley of Glastonbury brought home a good paycheck from her job at Aetna.
But last Tuesday, she was in line with her two young granddaughters for free produce from Mobile Foodshare at the First Church of Christ Congregational on Main Street.
For Hartley, who said she was laid off from her job as a project manager about six years ago and then laid off from a subsequent job two years ago, every little bit helps. Her eligibility for unemployment ran out two months ago.
Could you imagine standing in line at a food bank?
It just might happen to you.
Millions of Americans that have lost their jobs and their homes never thought that it would happen to them.
Wealth and possessions are here today and gone tomorrow. People that base their lives on the things that they own are always going to have a high level of stress. We didn’t bring any of these things into the world with us, and we can’t take any of them with us when we leave.
So try not to stress out too much. We should all learn to be content whether we have a lot or whether we have a little.
So what do all of you think about the stress level in America right now? Please feel free to leave a comment with your opinion below….
All over America, restlessness and frustration are growing. It has now been almost three years since the great financial crash of 2008, and yet the U.S. economy is still a complete and total mess. In fact, there are all sorts of signs that things are about to get even worse, and the American people are just about fed up. Virtually every major poll, survey and measure of consumer confidence shows that the American people are becoming more pessimistic about the economy. Millions of hard working Americans that worked their fingers to the bone for their employers and that did everything “right” are sitting at home on their couches tonight staring blankly at the television. Many of them still have a hard time believing that they were laid off and that there is nobody out there that wants to give them a good job. There are millions of other Americans that won’t get much sleep tonight because they will spend much of the night rolling around in bed wondering how they are possibly going to be able to pay the mortgage. We have never faced such an extended economic downturn in modern U.S. history, and a lot of people are starting to freak out about the condition of the economy. As Gerald Celente likes to say: “When people lose everything and have nothing left to lose – they lose it.”
Every single month, the number of good jobs continues to go down. Wall Street actually rewards companies that have a good “outsourcing strategy”. As I have written about previously, a growing percentage of the jobs that are being “created” these days are very low paying jobs. But you can’t support a family, pay a mortgage or even afford decent health insurance on what you would make stocking shelves at Target or passing out buckets of chicken for KFC.
The American people keep waiting for “hope” and “change” to show up, but all they get instead are more helpings of “despair” and “frustration”.
Sadly, most Americans still cling to the hope that if the “next election” will just turn out the right way that things will be okay. But the truth is that things seem to stay on pretty much the same course no matter who we put into office.
For many years the status quo seemed to be okay for most people, but now we are starting to reap the results of the economic seeds that we have sown.
Now our economic decline is starting to accelerate and people are starting to panic. Most Americans may not know why all of this is happening, but what many of them do know is that something in their gut is telling them that things have gone terribly, terribly wrong somehow.
The following are 10 signs that the American people are starting to freak out about the condition of the economy….
#1 Things have already gotten so bad that Americans will literally trample one another just to get on a waiting list for rental assistance vouchers. Just check out the following excerpt from a local news report about a recent incident in Texas….
At least eight people were hurt Thursday morning while scrambling to line up for a limited number of Dallas County rental vouchers — after waiting for hours in their cars.
People lined up Thursday morning to apply for Dallas County Section 8 housing vouchers. Dallas County sheriff’s spokesman Kim Leach estimated the crowd at about 5,000.
Video of this incident is posted below. One of the people that was trampled was a pregnant woman….
#2 Almost every measurement of consumer confidence is going down. For example, the Conference Board’s consumer confidence index fell from 61.7 in May to 58.5 in June.
#3 The Reuters/University of Michigan consumer sentiment index has fallen to 63.8 after being at 71.5 in June. It is now the lowest that it has been since the last recession “ended”.
Close to $2 of every $10 that went into Americans’ wallets last year were payments like jobless benefits, food stamps, Social Security and disability, according to an analysis by Moody’s Analytics.
There are tens of millions of Americans that are living “on the edge”, but at least the massive government handout programs are enabling most of them to survive.
So what happens when the checks from the government stop coming?
Look, I am not advocating that the “welfare society” that we have become is a good thing. Today, Americans receive more in direct government benefits than they pay in taxes. That is not even close to sustainable.
What I am pointing out is that tens of millions of Americans that are deeply suffering are currently being pacified by these government handouts. Once the handouts are cut significantly or taken away completely it is going to unleash a lot of anger and frustration.
Of course what the American people really need are good jobs that will give them dignity and allow them to provide for their families, but millions of those keep getting shipped out of the country.
So the only thing that millions of Americans still have to hang on to are their government benefits. Once that changes a whole lot of people are going to throw a fit.
In fact, we are already seeing some really bizarre behavior across the United States. In many areas of the country we are literally watching society crumble right in front of our very eyes.
If you doubt this, just check out these two articles….
But not all Americans will resort to lawless behavior. In fact, there are a lot of really good, hard working people out there that this economy has left behind.
There are some people that have put in decades of hard work only to see their dreams shrivel up over the past few years.
Some of the stories people send me are absolutely heartbreaking. I have looked at each and every comment that has been left on The Economic Collapse over the past couple of years. Needless to say, it has taken a huge investment of my time to go through more than 20,000 comments. But in the process I have gotten a very good idea of what people are going through across the nation.
So how badly are people hurting? Well, a reader identified as “Anna44” recently shared with us what some of her family members have been going through in this economy….
My B-I-L was a dealership owner/manager who worked long hours over 38 years and had to close his doors when Saturn was dissolved. When his dealership went under, 72 others lost their job. That’s 72 families who took a hit. He lost his home, everything. A few of his former employees lost their homes as well eventually. They were not lazy or WORTHLESS. It took him a year and a half to finally find something, but now he lives in a hotel unable to qualify for a house or apartment. This is an educated man who competed nationwide for top dog and got it more then once. His biggest fault? He’s almost 60, young enough to need the work, but too old to be hired.
As for my husband- 26 years AF officer, handling millions & billions on International & National levels has just entered his 7th month of unemployment. Two tours abroad- lazy he is NOT. He doesn’t qualify for unemployment, nor is he counted because he gets a retirement check. He wants and needs to work- yet there is little out there. If he doesn’t find something soon, we too will lose the home we sunk every cent into after 20 years of saving for it!
All across America tonight there are similar stories. People have done everything “right” all of their lives and they are frustrated that now they have been pushed to the edge of poverty by this economy.