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  • how the middle class became the underclass

    http://money.cnn.com/2011/02/16/news...lass/index.htm

    NEW YORK (CNNMoney) -- Are you better off than your parents?

    Probably not if you're in the middle class.

    Incomes for 90% of Americans have been stuck in neutral, and it's not just because of the Great Recession. Middle-class incomes have been stagnant for at least a generation, while the wealthiest tier has surged ahead at lighting speed.

    In 1988, the income of an average American taxpayer was $33,400, adjusted for inflation. Fast forward 20 years, and not much had changed: The average income was still just $33,000 in 2008, according to IRS data.

    Meanwhile, the richest 1% of Americans -- those making $380,000 or more -- have seen their incomes grow 33% over the last 20 years, leaving average Americans in the dust.

    Experts point to some of the usual suspects -- like technology and globalization -- to explain the widening gap between the haves and have-nots.

    But there's more to the story.........


    so.....
    trickle down ?

  • #2
    So very true. This country is headed for an economic fall. It will be tough in the streets when this happens, and it is all because of the greed of corporations, and the destruction of the laws that prevented corporations from destroying the middle class. Read Death Of The Liberal Class by Chris Hedges, and Empire Of Illusion by Chris Hedges.

    Both are great books and they explain how this has happened.
    Last edited by Sackett; 02-21-2011, 10:53 AM.

    Comment


    • #3
      Originally posted by dlo View Post
      so.....
      trickle down ?
      Yep. It's hard to explain to someone who can't grasp it, but trickle down does work.

      Joe, who owns his own business, hires five people. Their salaries are based on what Joe can afford to pay them - or - what Joe thinks is a fair salary. Joe hires as many people as he needs. If the economy slows and the need for Joe's product decreases, he either doesn't give his employees a raise or cuts his workforce. Likewise, if the need for Joe's product increases, Joe may hire more people... unless of course the government taps money he needs to do that. Joe is in business to make a profit however. Should he choose to reward his employees with raises based on the increased profit, he's what most people would consider a nice boss. If he keeps the profit for himself, he can do that. He's not being evil by doing so. He is going to keep whatever he deems he deserves. It's his money after all. But as long as Joe runs his business and that business requires he hire employees, the money trickles down. Even if he has no employees, Joe buys things thus putting money back into the economy and some other business makes a profit. Again- the money trickles down.

      Kill the profits, the money doesn't trickle down. Tax businesses, make regulations that require an outlay of money for compliance, insert too much oversight into the business world and profits go down. Less people are employed and the salaries of the ones that are employed become stagnant because the only way to run a business is to make a profit. The only place it doesn't work like that is in government. Of course the government is only spending Joe's money however and the government doesn't have to make a profit. They just take more money from the people who do.
      Last edited by FNA209; 02-18-2011, 02:17 AM.
      "Blaming the prince of the fools should not blind anyone to the vast confederacy of fools that made him their prince" - Unknown Author
      ______________________________________________

      "That government is best which governs the least, because its people discipline themselves." - Thomas Jefferson
      ______________________________________________

      “There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.” - John Adams

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      • #4
        dlo How many times does this have to be explained to you? Come on use your education my friend. It doesn't matter if a Republican/Democrat came up with it, it works.
        MDRDEP:

        There are no stupid questions, but there sure are a lot of inquisitive idiots.

        Comment


        • #5
          Another interesting factor that people seem to overlook is that many unions are their own worst enemy. For so long they have pushed for better pay and benefits but we now live in the global economy, the global business world. When you can hire someone in another country and pay them 10% of what a union worker would earn in the US do you really think a business owner is going to pay 10 times what his competitor is paying? Not to mention they don't have to worry about strikes or collective bargaining. The jobs that our grandparents and parents worked in the manufacturing sector over the last 2 generations are drying up. They will probably be gone in another generation with the exception of a selective few. The jobs that are replacing these are high tech jobs that require college or trade school. What this essentially equates to is the good paying jobs for unskilled workers are going away. Unskilled will be working at the local fast food joint or supermarket no more factory lines. This means the job market over here is going to remain extremely competitive.
          Last edited by hobbsie711; 02-18-2011, 03:09 AM.
          "Somewhere a True Believer is training to kill you. He is training with minimum food or water, in austere conditions, day and night. The only thing clean on him is his weapon. He doesn't worry about what workout to do---his rucksack weighs what it weighs, and he runs until the enemy stops chasing him. The True Believer doesn't care 'how hard it is'; he knows he either wins or he dies. He doesn't go home at 1700; he is home. He knows only the 'Cause.' Now, who wants to quit?"

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          • #6
            Originally posted by hobbsie711 View Post
            Another interesting factor that people seem to overlook is that many unions are their own worst enemy.
            FYI: 22 of the 50 States in the US are right to work States. If you want to get away from unions you don't have to go overseas to do so. I know of many non-unions shops that have closed down. The ones that are still open have repeatedly cut their employees wages. The shop down the road from me is non-union and also has a sister shop down in Mexico. Three times in the last decade they have gone to their employees and told them that if they didn't except wage and benefit cuts they'd just move the whole operation south of the border.
            Last edited by 7th District; 02-20-2011, 09:57 PM. Reason: Correct the number of RTW States.
            "The things that will destroy America are prosperity at any price, peace at any price, safety first instead of duty first, the love of soft living and the get rich quick theory of life." - Teddy Roosevelt

            Disclaimer: The opinions I express here are mine and mine alone. They are not intended to reflect the positions/opinions of any other known person(s) or organization(s).

            Comment


            • #7
              Originally posted by dlo View Post
              so.....
              trickle down ?

              Welcome to the new normal. Even if politicians could cut business taxes to zero it's not enough to overcome a 52 cent an hour wage. There is no figurative economic engine that will develop private sector jobs like there was in the 20th century. IMHO this is what happens when an industrialized, 1st World Nation decides to de-industrialized itself. Many people saw this coming, myself included, so I'm not surprised.

              The whole premise of trickle down economics was that the little guy benefits when large corporations, and those who are wealthy, are making money. The side effect of them profiting was that the little guys were provided with jobs that might lead them to the middle class. However in a day and age when large corporations and the wealthy can develop their wealth overseas, and then bring their wares back to our country duty free, where is the little guy going to benefit? I guess he does get more bang for his buck out of his electronic benefits transfer card and unemployment checks. I believe this is why Wall St has recovered rather quickly, while Main St still has not.

              I'd really like to think that I'm being a bit of a chicken little, but I don't see anything on the horizon to make me think any differently.
              "The things that will destroy America are prosperity at any price, peace at any price, safety first instead of duty first, the love of soft living and the get rich quick theory of life." - Teddy Roosevelt

              Disclaimer: The opinions I express here are mine and mine alone. They are not intended to reflect the positions/opinions of any other known person(s) or organization(s).

              Comment


              • #8
                However in a day and age when large corporations and the wealthy can develop their wealth overseas, and then bring their wares back to our country duty free, where is the little guy going to benefit?
                Very True and it need to be fixed.
                MDRDEP:

                There are no stupid questions, but there sure are a lot of inquisitive idiots.

                Comment


                • #9
                  Originally posted by FNA209 View Post
                  Yep. It's hard to explain to someone who can't grasp it, but trickle down does work.

                  Joe, who owns his own business, hires five people. Their salaries are based on what Joe can afford to pay them - or - what Joe thinks is a fair salary. Joe hires as many people as he needs. If the economy slows and the need for Joe's product decreases, he either doesn't give his employees a raise or cuts his workforce. Likewise, if the need for Joe's product increases, Joe may hire more people... unless of course the government taps money he needs to do that. Joe is in business to make a profit however. Should he choose to reward his employees with raises based on the increased profit, he's what most people would consider a nice boss. If he keeps the profit for himself, he can do that. He's not being evil by doing so. He is going to keep whatever he deems he deserves. It's his money after all. But as long as Joe runs his business and that business requires he hire employees, the money trickles down. Even if he has no employees, Joe buys things thus putting money back into the economy and some other business makes a profit. Again- the money trickles down.

                  Kill the profits, the money doesn't trickle down. Tax businesses, make regulations that require an outlay of money for compliance, insert too much oversight into the business world and profits go down. Less people are employed and the salaries of the ones that are employed become stagnant because the only way to run a business is to make a profit. The only place it doesn't work like that is in government. Of course the government is only spending Joe's money however and the government doesn't have to make a profit. They just take more money from the people who do.
                  wow.
                  So you are "proving" to me that it works, by developing a theoretical example of "Joe"?
                  You do know that there is a difference b/w "reality" and making up a theoretical example, right?

                  Is there any real evidence that it works

                  Comment


                  • #10
                    Originally posted by jcioccke View Post
                    dlo How many times does this have to be explained to you? Come on use your education my friend. It doesn't matter if a Republican/Democrat came up with it, it works.
                    is there any evidence of that?
                    other than you just claiming it?
                    Or supports just repeating it?
                    Last edited by dlo; 02-18-2011, 06:42 AM.

                    Comment


                    • #11
                      Originally posted by jcioccke View Post
                      Very True and it need to be fixed.
                      why are you agreeing with that statement -
                      yet arguing with me that "trickle down" is working ?

                      Comment


                      • #12
                        I would suggest to any that care to hear a good argument for progressive goverment that they go to You Tube and type in Chris Hedges. Listen to some of his talks, and think about what he is saying.
                        After you listen to him, you will realize what is happening to the middle class in America. Thom Hartmann is another good source.
                        Last edited by Sackett; 02-21-2011, 10:54 AM.

                        Comment


                        • #13
                          yet arguing with me that "trickle down" is working ?
                          Because they (Dem. Rep & Unions) all have a hand in why jobs are over seas. But the current administration is on a tear attacking small & mid size business. I deal with it for a living and let me tell you the amount of fines, fees and regulation they have put on small & mid size business is ridiculous.
                          MDRDEP:

                          There are no stupid questions, but there sure are a lot of inquisitive idiots.

                          Comment


                          • #14
                            Stories such as this always seem to assume incorrectly that "class" distinctions are fixed. Also, the composition of the population is not fixed. Poor people come here because of superior economic opportunity. One thing that makes America great is that by hard work and education you can elevate your income and social standing.

                            One thing I blame for reducing the median income is an increase in the work force due to greatly increased competition and far more women who work rather than stay home and take care of children. Another is an influx of low-skilled immigrants, who add to the lower end of the income distribution curve. Both of these factors increase the labor supply, thereby reducing the average price of labor. Americans' loss of the work ethic is another factor.

                            Another thing to consider is that these figures disregard the huge increase in government benefits that lower-income people, including some the middle class, now enjoy. In addition to housing and food allowances from welfare programs, lower-income families qualify for SCHIP, which provides free or heavily subsidized medical care for children. The value of these benefits rarely is included in income figures.

                            And, beyond this, there is the shadow economy. Many "low-income" people have substantial unreported and untaxed income from crime, especially drug dealing.

                            Progressive (aka socialist) policies are bound to fail because in the end the market always trumps governmental income redistribution. By in large, socialist or heavily redistributionist governments have failed. Such policies also necessarily heavily limit individual freedom and increase governmental intrusion into private lives. People invest a lot of effort in getting around regulations. The easiest way to avoid them is to change one's domicile to a foreign country with more favorable policies. Except for local service businesses, this is easily accomplished.
                            Last edited by DAL; 02-18-2011, 03:06 PM. Reason: typos
                            Facts do not cease to exist because they are ignored. -- Aldous Huxley
                            Two things are infinite: the universe and human stupidity. -- Albert Einstein

                            Comment


                            • #15
                              In addition, I have to question the accuracy of the "average figures" in the article.

                              According to another article:

                              U.S. Census Quintiles

                              # The U.S. Census Bureau breaks down the reported household incomes into quintiles (or five divisions). In 2007, the middle quintile reported an income range of $36,000 to $57,660. Many economists and politicians alike believe this range is too narrow to encompass the true middle class of America. Therefore, a more generous range would include the middle three quintiles, which makes the range from $19,178 to $91,705. This range accounts for 60 percent of all households, and with the lower end balancing near the poverty threshold, this range may not be completely accurate.

                              Median Income

                              # The 2008 census reported the medium income as $50,233. The PewResearch Center suggests that the middle income range is 75 percent to 150 percent of the median income. This would make the middle class income range $37,675 to $75,350. To most, this range seems small, and surveys conducted by the PewResearch Center find that many who fall outside this range still consider themselves middle class.

                              Economist's Views

                              # Economist Gary Burtless of Brookings Institution indicates that the middle class encompasses from one-half the median income to twice the median income. This would make the middle class income range $25,117 to $100,466. MIT economist Frank Levy believes that those in the middle class have enough money to afford the basic building blocks of a good life, including a house, a car and money to pay necessary bills. He suggests that families in their prime earning years are middle class if they fall between $30,000 and $90,000.
                              Read more: What Is an Average Middle Class Salary Range? | eHow.com http://www.ehow.com/about_5212740_av...#ixzz1EKyYvCey
                              Facts do not cease to exist because they are ignored. -- Aldous Huxley
                              Two things are infinite: the universe and human stupidity. -- Albert Einstein

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