The Beginning Of The End
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40 Percent Of U.S. Workers Make Less Than What A Full-Time Minimum Wage Worker Made In 1968

1968 Shelby GT350 - Photo by Ben CossitorAre American workers paid enough?  That is a topic that is endlessly debated all across this great land of ours.  Unfortunately, what pretty much everyone can agree on is that American workers are not making as much as they used to after you account for inflation.  Back in 1968, the minimum wage in the United States was $1.60 an hour.  That sounds very small, but after you account for inflation a very different picture emerges.  Using the inflation calculator that the Bureau of Labor Statistics provides, $1.60 in 1968 is equivalent to $10.74 today.  And of course the official government inflation numbers have been heavily manipulated to make inflation look much lower than it actually is, so the number for today should actually be substantially higher than $10.74, but for purposes of this article we will use $10.74.  If you were to work a full-time job at $10.74 an hour for a full year (with two weeks off for vacation), you would make about $21,480 for the year.  That isn’t a lot of money, but according to the Social Security Administration, 40.28% of all workers make less than $20,000 a year in America today.  So that means that more than 40 percent of all U.S. workers actually make less than what a full-time minimum wage worker made back in 1968.  That is how far we have fallen.

The other day I wrote an article which discussed the transition that we are witnessing in our economy right now.  Good paying full-time jobs are disappearing, and they are being replaced by low paying part-time jobs.  So far this year, 76.7 percent of the jobs that have been “created” in the U.S. economy have been part-time jobs.

That would be depressing enough, but what makes it worse is that wages for many of these low paying jobs have actually been declining over the past decade even as the cost of living keeps going up.  The following is from a recent USA Today article

In the years between 2002 and 2012, real median wages dropped by at least 5% in five of the top 10 low-wage jobs, including food preparers and housekeepers.

So where have the good jobs gone?

Well, there are three long-term trends that are absolutely crushing American workers right now.

First of all, thanks to our very foolish politicians American workers have been merged into a global labor pool where they must directly compete for jobs with workers on the other side of the planet that live in countries where it is legal to pay slave labor wages.  This has resulted in millions upon millions of good jobs leaving this country.  Big corporations can pad their profits by taking a job from an American worker making $15 an hour with benefits and giving it to a worker on the other side of the globe that is willing to work for less than a dollar an hour with no benefits.  Our politicians could do something about this, but they refuse to do so.  Most of them are absolutely married to the idea of a one world economic system that will unite the globe.  Unfortunately, the U.S. economy is going to continue to lose tens of thousands of businesses and millions upon millions of jobs to this one world economic system.

Secondly, big corporations are replacing as many expensive workers with machines, computers and robots as they possibly can.  As technology continues to advance at a blistering pace, the need for workers (especially low-skilled workers) will continue to decrease.  Unfortunately, the jobs that are being lost to technology are not coming back any time soon.

Thirdly, the overall U.S. economy has been steadily declining for more than a decade.  If you doubt this, just read this article.  As our economy continues to get weaker, the lack of jobs is going to become a bigger and bigger problem.

And as our economy systematically loses good jobs, more Americans are forced to become dependent on the government.

Back in 1979, there was about one American on food stamps for every manufacturing job.  Today, there are about four Americans on food stamps for every manufacturing job.

When I first found that statistic I was absolutely stunned.  How in the world can anyone out there deny that the U.S. economy is collapsing?

But as I mentioned above, it isn’t just that the number of jobs is not what it should be.  The quality of our jobs is declining as well.  For example, one study found that between 1969 and 2009 the wages earned by American men between the ages of 30 and 50 declined by 27 percent after you account for inflation.

That is a pretty stunning decline.  And it has only accelerated in recent years.  Median household income (adjusted for inflation) has fallen by 7.8 percent since the year 2000, and the ratio of wages and salaries to GDP in the United States is near an all-time record low.

Most Americans are finding that their bills just keep going up but their paychecks are not.  This is causing the middle class to wither away, and most families are just trying to survive from month to month at this point.  In fact, according to one recent survey 76 percent of all Americans are living paycheck to paycheck.

So where do we go from here?

To some people the answer is simple.  They say that we should substantially raise the minimum wage.  And yes, that would definitely make life a bit better for lots of low paid workers out there, but it would also have some very negative side effects.  A substantially higher minimum wage would mean higher prices at retail stores and restaurants, and it would also greatly increase the incentive that corporations have to replace American workers with foreign workers or with technology.  We already have rampant unemployment in this country, and right now there are more than 100 million working age Americans that do not have a job.  We certainly don’t want to make that worse.

So raising the minimum wage would not solve our problems.  It would just redistribute our problems.

What we really need to do is to return to the principles that once made this country great.  In early America, we protected our markets with high tariffs.  Access to the U.S. market was a privilege.  Foreign domination was kept out, and our economy thrived.

It is definitely not “conservative” and it should not be “liberal” to stand by and watch millions upon millions of our good jobs get shipped over to communist China.  We need more “economic patriots” in America today, but unfortunately they appear to be a minority at this point.

And once upon a time the U.S. economy was actually a free market system where rules, regulations and red tape were kept to a minimum.  Our nation blossomed under such a system.  Sadly, today we have become a nation that literally has millions of laws, rules and regulations.  The control freaks seem to run everything.  In fact, the Obama administration recently forced one small-time magician out in Missouri to submit a 32 page disaster plan for the little rabbit that he uses in his magic shows for kids.  That is a very humorous example, but it is a perfect illustration of how absurd our system has become.

Another thing we could do to turn this around would be to get rid of the IRS and the income tax.  Did you know that the greatest period of economic growth in U.S. history was during a time when there was absolutely no income tax?  If you doubt this, just read this article.

And of course probably the most important thing that we could do for our economy would be to get rid of the Federal Reserve.  The Fed is a massive Ponzi scheme and it has played a primary role in creating almost every single financial bubble in the post-World War II era.  Right now we are living in the greatest bond bubble in the history of the planet, and when that Fed-created bubble bursts the pain is going to be absolutely excruciating.  In addition, the value of our currency has declined by over 96 percent and the size of the U.S. national debt has gotten more than 5000 times larger since the Fed was created.  The Federal Reserve is at the very heart of our economic problems, and we desperately need to shut it down.

Unfortunately, our politicians are not even willing to consider these solutions, and most Americans are way too busy watching Toddlers & Tiaras, Honey Boo Boo and other mindless television programs to be bothered with the real problems that our country is facing.

So needless to say, the great economic storm that is coming is not going to be averted.  Most of the country is still asleep, and most people are going to get absolutely blindsided by the economic nightmare that is rapidly approaching.

Things Are Getting Worse: Median Household Income Has Fallen 4 Years In A Row

New numbers that have just been released show that things are getting worse for American families.  According to the U.S. Census Bureau, median household income declined to $50,054 in 2011.  That is a 1.5 percent decline from the previous year, and median household income has now fallen for 4 years in a row.  In fact, after adjusting for inflation median household income has not been this low since 1995.  These new numbers once again confirm what so many of us have been talking about for so long – American families are steadily getting poorer.  Incomes are going down and the cost of living just keeps going up.  This dynamic is squeezing more Americans out of the middle class every single month.  Others just keep going into more debt in an attempt to maintain their previous lifestyles.  As Americans, we really don’t like to hear that things are getting worse and that we are in decline, but unfortunately that is exactly what is happening.  Our economy does not produce nearly enough jobs for everyone anymore, the proportion of low wage jobs in our economy continues to grow, and the middle class is shrinking at an alarming rate.  Our politicians can deliver speeches about how great we all are until the cows come home, but it isn’t going to change the reality of our situation.  If we want different results we have got to start taking different actions.

When you take the median household income of $50,054 and divide it up over 12 months, it comes to about $4000 a month.

About half of all American households are making more than that and about half of all American households are making less than that.

So can an average family of four people make it on just $4000 a month?

Well, first of all you have got to take out taxes.  After accounting for all forms of taxation you will be lucky if you have $3000 remaining.

With that $3000, you have to pay for all of the following.

*Housing

*Power

*Water

*Food

*Phone

*Internet

*At Least One Vehicle

*Gasoline

*Vehicle Repairs

*Car Insurance

*Health Insurance

*Dental Bills

*Home Or Rental Insurance

*Life Insurance

*Student Loan Debt Payments

*Credit Card Payments

*Furniture

*Clothing

*Pets

*Entertainment (although it is hard to imagine any money will be left for that)

Have I left anything out?

The truth is that $3000 does not go as far as it used to.

No wonder American families are feeling so stretched financially these days.

Most families can’t even afford to think about retirement or investments because most of them are just trying to figure out a way to survive from month to month.

Unfortunately, economic conditions for middle income Americans continue to deteriorate.  Being in the middle class in America is like playing a perverse game of musical chairs.  More chairs are constantly being pulled out of the game and the middle class just continues to shrivel up.

The following are some more statistics that show that things are getting worse….

-In 1999, 64.1 percent of all Americans were covered by employment-based health insurance.  Today, only 55.1 percent are covered by employment-based health insurance.

-Health insurance premiums rose faster than the overall rate of inflation in 2011 and that is happening once again in 2012.  In fact, it is been happening for a very long time.

-In the United States today, there are close to 10 million households that do not have a single bank account.  That number has increased by about a million since 2009.

-Back in 1962, the wealthiest one percent of all Americans had 125 times the net worth of the median household.  Today, the wealthiest one percent of all Americans has 288 times the net worth of the median household.

-Back in 2007, 19.2 percent of all American families had a net worth of zero or less than zero.  By 2010, that figure had soared to 32.5 percent.

-According to a survey conducted by the Pew Research Center, 32 percent of all Americans now identify themselves as “lower class”.  In 2008, that figure was only at 25 percent.

-As I have written about previously, 61 percent of all Americans were “middle income” back in 1971 according to the Pew Research Center.  Today, only 51 percent of all Americans are “middle income”.

-62 percent of all middle class Americans say that they have had to reduce household spending over the past year.

-Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.

-There are now 20.2 million Americans that spend more than half of their incomes on housing.  That represents a 46 percent increase from 2001.

-According to the Federal Reserve, the median net worth of American families dropped “from $126,400 in 2007 to $77,300 in 2010“.

-Sadly, 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.

-At this point, less than 25 percent of all jobs in the United States are “good jobs”, and that number continues to shrink.

-The percentage of working age Americans that are employed is smaller now than it was two years ago.

-The number of Americans that are financially dependent on the government is sitting at an all-time record, and it just keeps going up.

-If the labor force participation rate was the same today as it was back when Barack Obama first took office, the unemployment rate in the United States would be 11.2 percent.

That last statistic deserves some special attention.

If the exact same percentage of Americans were considered to be “in the work force” today as when Barack Obama became president, the unemployment rate in this country would be well over 11 percent.

But the federal government has pretended that millions upon millions of Americans have “left the work force” over the past few years and that allows them to tell the fib that the unemployment rate has actually declined to 8.1 percent.

Of course we all know that is a bunch of nonsense.  About the same percentage of Americans want a job today as was the case back in 2008.

But 8.1 percent looks way better than 11.2 percent does.

What makes all of this even more distressing is that this is the recovery.

Things are not going to be getting much better than this.  We are rapidly approaching the next wave of the economic collapse and all of the numbers posted above are going to be getting a lot worse.

So even though things may be tight for your family right now, you should enjoy these times while you still have them.

Someday we will look back on these years as “the good old days”.

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