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According to economists, the US economy began recovering from the recession back in 2009. However, last week brought further confirmation that there has been no economic recovery for many Americans. The United States Conference of Mayors released a report showing that the average wage in the sectors of the economy devastated by the last recession, principally manufacturing and construction, was $61,637, while the average wage in the sectors of the economy in which jobs are now being created, principally hospitality, health care, and administrative support, is only $47,131. That represents a 23% decline.
Paul Craig Roberts also co-authored an article on "The De-industrializtion of America" containing more sobering statistics. Between October 2008 and July 2014, the working age population of the United States rose by 13.4 million people. Over the same time, the labor force grew by only 1.1 million. Between 2007 and 2012, real median household income fell 10%. A recent study by the Federal Reserve shows that two thirds of American households would need to sell possessions or borrow from family or friends to raise $400, and the same study showed that nearly 20% of student loans are in collection or behind in payments, with over 30% in deferment.
Of course, this is not what we were told global free trade would bring. Dirty manufacturing jobs that no one wanted to do were going to be replaced by exciting, higher paying high tech jobs, or so the story went. We were also assured that any problem caused by the loss of manufacturing jobs would be solved by education. Instead, what we have are fewer jobs that pay less and college graduates who can't even service their student loans.
None of this has put a dent in the bipartisan coalition favoring globalism. Indeed, at a time when the American economy cannot provide jobs for millions of Americans, we are told that what we need to do is admit millions of foreigners into our country. It is hard to escape the conclusion that those running America do not care about most of us who live here.
I blame it mainly on the Federal Reserve Board inflating our money since 9/11, while keeping interest rates at 0%. That means the middle class can't save to invest in new businesses and jobs creation, but actually loses money on its passbook "savings" accounts. Meanwhile, the banksters charge 30% interest on credit cards.
Whatever the cause, Tom is right: The middle class is being destroyed in this country by both Republicans and Democrats beholden to the oligarchs.
John, thanks for your comment. I think there is plenty of well-deserved blam to go around. Certainly, the Fed's policies are hampering capital formation in our country. And, as you say, ordinary Americans are the ones paying the price.
A wonderful piece on our sorry state of affairs
Tom, Here is a little bit of the 'rest of the story" of those "higher paying high tech jobs" our duopoly is always promising the middle class before elections.
By Thomas Storck | July 14, 2014
The April 19 Economist magazine, that genial and usually entertaining advocate of neo-liberal economics and of productivity growth as the summum bonum of existence, carried a story about Intel announcing “plans to close its Costa Rica factory and move its operations to Malaysia, Vietnam and China. By the end of the year 1,500 jobs will have been lost.”
Costa Rica is a small country and Intel accounts for “about 20% of the country’s exports.” It is estimated that “the closure of the microchip factory will cause a drop in Costa Rica’s GDP of 0.3-0.4% over the next year.” Meanwhile other companies are doing the same thing: Hewlett Packard “last year announced that it was moving some of its Costa Rican jobs to India,” and “Bank of America said it would close its Costa Rican operations as part of a global restructuring programme.”
Such mobility on the part of firms is certainly business as usual. Just as the Devil wanders about the world seeking the ruin of souls, so firms often wander about the world seeking a country or city willing to give them tax or other legal breaks, such as relaxation of labor or environmental laws.
Let's also not forget that by the old standards of measurement the inflation is running at about 6% and likewise the unemployment is at about 22%. We will probably never learn where all those trillions of printed dollars went while ruminating about the offical line that it is left for safekeeping with the big banks who earn 2% on this money. All I know, is that here in Vegas, they are building houses all over the place, again!, as if the economy is booming all over.
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