America’s Middle Class Ranks #27 on Global Scale

America is the richest country on Earth. We have the most millionaires, the most billionaires and our wealthiest citizens have garnered more of the planet’s riches than any other group in the world. We even have hedge fund managers who make in one hour as much as the average family makes in 21 years!

This opulence is supposed to trickle down to the rest of us, improving the lives of everyday Americans. At least that’s what free-market cheerleaders repeatedly promise us.

Unfortunately, it’s a lie, one of the biggest ever perpetrated on the American people.

Our middle class is falling further and further behind in comparison to the rest of the world. We keep hearing that America is number one. Well, when it comes to middle-class wealth, we’re number 27.

The most telling comparative measurement is median wealth (per adult). It describes the amount of wealth accumulated by the person precisely in the middle of the wealth distribution — fifty percent of the adult population has more wealth, while fifty percent has less. You can’t get more middle than that. Read more >>

American Households On Foodstamps Climb To New Record

Yesterday, briefly, we were confused by the eruption in the stock market following a not too bad sub-200K nonfarm payrolls number. Because we know that in the New Normal bad is always good, no matter what the well-coifed TV pundit du jour tells you. Then we remembered that yesterday is when the USDA releases its monthly Supplemental Nutrition Assistance Program data, i.e. Americans on Foodstamps.

It was here that the ramp was perfectly explained, because while the bad (for stocks of course) data was that individual foodstamps recipients rose by 170K in March - if just a whisker below all time highs - it was the number of American households on foodstamps, which rose to a new all time high of 23,116,441 (each collecting an average of $274.30 per month) that perfectly explained the Dow Jones' 200 point surge higher: the transfer of wealth from the poor and middle-classes to the 1% continues without a hiccup. Read more >>

Why America's middle class is losing ground

When Debbie Bruister buys a gallon of milk at her local Kroger supermarket, she pays $3.69, up 70 cents from what she paid last year.

Getting to the store costs more, too. Gas in Corinth, Miss., her hometown, costs $3.51 a gallon now, compared to less than three bucks in 2012. That really hurts, considering her husband's 112-mile daily round-trip commute to his job as a pharmacist.

Bruister, a mother of four, received a $1,160 raise this school year at her job as an eighth-grade computer teacher. The extra cash -- about $97 a month, before taxes and other deductions -- isn't enough for her and her husband to keep up with their rising costs, especially after the elimination of the payroll tax break. Its loss shrunk their paychecks by more than $270 a month.

"If you look at how much prices are going up, you get in the hole really quick," Bruister said. "It's a constant squeeze."

In the wake of the Great Recession, millions of middle-class people are being pinched by stagnating incomes and the increased cost of living. America's median household income has dropped by more than $4,000 since 2000, after adjusting for inflation, and the typical trappings of middle-class life are slipping out of financial reach for many families. Read more >>

The hidden tax Washington doesn't want you to know

Okay, middle-class taxpayers: Listen up. Our national government in Washington is screwing you again. This time the screwing involves the way that two new income tax surcharges, supposedly designed to affect only the "rich," will reach deeper and deeper into the middle class unless something is done now to rein them in.

I'm talking about the 0.9% tax surcharge on the amount by which individuals' "earned income" -- such as salaries and fees -- exceeds $200,000 this year, and the 3.8% surcharge on some or all the investment income of single households with an adjusted gross income of more than $200,000, and married households with an adjusted gross of $250,000 and up.

These surcharges were built into the Affordable Care Act (a.k.a. Obamacare). The screwing isn't the tax surcharges themselves -- it's the fact that the thresholds for them aren't indexed for inflation. This means that unless something is done, more and more people will be subject to these taxes as inflation boosts incomes.
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Median net worth at lowest level since 1969 recent study finds

There may be a temporary jubilee with the notion that the fiscal cliff has been deferred for a few months.  The media is quick to accept anything for a victory but very little has been done to stop our marching path onward on this massive debt spiral.

Many Americans continue to live in poverty with no visible exit.  The latest figures show over 47 million Americans on food assistance.  Many Americans as they enter their golden years are coming to fully rely on Social Security, a system that was on the table for being cut in the recent debates.

Since the Fed is creating asset bubbles and destroying fixed income investments, many older Americans are realizing that retirement is no longer a viable option given the rising costs in food, healthcare, and once again housing.

I see this on a monthly basis where you can spot older Americans in non-traditional and many times, temporary employment roles.  None of this intervention is ending up in household income.  In fact, when we examine real wealth the net worth of American’s is down to the lowest levels since 1969 when adjusting for inflation. Read more >>

The Middle Class Is Worse Off Than You Think

The decline of the middle class has emerged as a key issue in the presidential campaign with both candidates promising policies to restore the economic stability of the middle class.

The conventional view has wages for the middle class, particularly men, stagnating over the past 40 years. But Michael Greenstone, economics professor at MIT and director of The Brookings Institution's Hamilton Project, says the situation is much worse than that.

Greenstone tells The Daily Ticker that after studying the data more carefully he found "that a lot of men are no longer in the workforce or are working part time."

"If you put them back in, the earnings of the guy in the middle have declined 20% over the last four decades," he says. "As a result, the median earnings of men are back to the levels that prevailed in the 1960s."

In the latest jobs report released Friday, the average hourly earnings for men and women rose a penny to $23.58 an hour. That caps a 1.6% gain over the past 12 months, which is not enough to keep up with 2% inflation as measured by the Consumer Price Index. Read more >>

CBO Doubles Estimate of How Many Will Pay Obamacare Penalty

Nearly 6 million Americans — significantly more than first estimated — will face a tax penalty under President Barack Obama's health overhaul for not getting insurance, congressional analysts said Wednesday. Most would be in the middle class. The new estimate amounts to an inconvenient fact for the administration, a reminder of what critics see as broken promises.

The numbers from the nonpartisan Congressional Budget Office are 50 percent higher than a previous projection by the same office in 2010, shortly after the law passed. The earlier estimate found 4 million people would be affected in 2016, when the penalty is fully in effect.

And the budget office analysis found that nearly 80 percent of those who'll face the penalty would be making up to or less than five times the federal poverty level. Currently that would work out to $55,850 or less for an individual and $115,250 or less for a family of four. Read more >>

Study: Middle-class poorer, earn less

For the first time since at least World War II, middle-class families finished the first decade of the 21st century poorer and with lower incomes than they had 10 years earlier. And 85% of those surveyed say that in the 2000s, it was harder than before to maintain a middle-class lifestyle, according to a study out Wednesday by the Pew Research Center for Social and Demographic Trends.

Median household income dropped nearly $3,500 for a three-person household, to $69,487 a year, the Pew study said. The median household's net worth dropped 28% to $93,150. Incomes have dropped since 2000, while wealth rose modestly early in the decade before gains were wiped out by the recession that began in 2007 recession and the financial crisis sparked in 2008, said Paul Taylor, a Pew executive vice president.

"That the middle class always enjoys a rising standard of living is part of America's sense of itself, and it has always been true - until now," Taylor said in an interview, describing the 2000s as a "lost decade" for the middle class. "It's been 11 years since the peak in household incomes, and that covers the early part of the decade as well." Read more >>

95 Percent Of The Jobs Lost During The Recession Were Middle Class Jobs

Who is the biggest loser in the ongoing decline of the U.S. economy?  Is it the wealthy?  No, the stock market has been soaring lately and their incomes are actually going up.  Is it the poor?  Well, the poor are definitely hurting very badly, but when you don't have much to begin with you don't have much to lose. 

Unfortunately, it is the middle class that has lost the most during this economic downturn.  According to Bloomberg, 95 percent of the jobs lost during the recession were middle class jobs.  That is an absolutely astounding figure.  Yes, some executives lost their jobs during the last recession as did some minimum-wage workers.  But overwhelmingly the jobs that were lost were middle income jobs. 

Sadly, the limited number of jobs that have been added since the end of the last recession have mostly been low income jobs.  A higher percentage of Americans are working low income jobs than ever before, and the cost of living continues to rise at a very brisk pace. This is causing an erosion of the middle class unlike anything we have ever seen in American history. More...

1 Out of 4 Employed Americans Make Less Than $10/hour

McDonald's workers on strike, Paris (Photo credit: Tilemahos_E)

Low wage jobs have been a big part of the so-called recovery.  What they also signify is a more troublesome trend that continues to eat away at the middle class in this country.  I’ve noted that the per capita average income for Americans is $25,000 and many seem to be shocked when they hear how low this figure is. 

A recent presentation only reinforces this figure by discussing the number of working Americans in low wage fields.  The problem with having such a large portion of our population in low wage work is that as the cost of living goes up many of these people have a harder time providing for necessities like food, education, and also healthcare. 

Surprising or not, the nation has been seeing a massive divide between the working class and those at the top.  The low wage employment growth signifies a continuation of this trend. More...

US Middle-class areas shrinking

Image by VLKR via FlickrThe number of middle-income neighborhoods in the United States has dwindled significantly over the past 40 years, as the rich-poor divide deepens across the country, a study released Wednesday showed.

In 2007, nearly a third of American families -- 31 percent -- lived in either an affluent neighborhood or a mainly low-income one, up from just 15 percent in 1970, according to the study conducted by Stanford University, and released in partnership with the Russell Sage Foundation and Brown University.

Meanwhile, 44 percent of American families lived in middle-class neighborhoods in 2007, down from 65 percent in 1970.

"Mixed income neighborhoods have grown rarer, while affluent and poor neighborhoods have grown much more common," the study said. More...

The American middle class no longer matters on the global stage

Image via WikipediaThe ideal setup for Global Corporate America is domestic stability. The erosion of the American middle class is of little concern for one simple reason: it no longer matters much on the global stage. All that Global Corporate America needs from America is a stable foundation that won't offer up any surprises or spots of bother.

As the discretionary purchasing power of the American middle class erodes, four times as many new potential customers appear elsewhere, hungry to taste the Oreos, become consumed by the iPhone, etc., and ten times as many are potential buyers of toothpaste and other basics. U.S. corporations are pulling $500 billion in profits from non-U.S. sales, and they hold $1 trillion in stashed overseas profits in various tax havens. All the growth in their revenues and profits are coming from non-U.S. sources. Read more...

True US GDP is 30% lower than official figures

The United States’ entry into the austerity phase actually started at least two years ago. In fact, the crisis and its consequences in terms of a collapse in earnings and capital, as well as the drastic restriction of consumer credit, are only one step in the process of the impoverishment of the US middle classes which started nearly thirty years ago. Throughout the whole of this period, the frenzy of easy credit had the aim of hiding this impoverishment by compensating for a shortage of income with unlimited debt.

The crisis having brought an abrupt end to this process, Washington (Government, Congress and the Fed together) has tried to make up for its disappearance by gigantic public debt. But, as we see on a daily basis, looking at the country’s economic and social development, this attempt has failed for the reasons discussed earlier in this issue of the GEAB. However, this attempt has a direct impact on US GDP that most economists and experts refuse to acknowledge because they would be a shock of such violence for global economic and financial stability that the so-called « Greek crisis » would look like a simple training exercise. Read More...

The U.S. Middle Class Is Being Wiped Out: Here's the Stats to Prove It

Image by Steve took it via Flickr

From The Business Insider

Editor's note: Michael Snyder is editor of theeconomiccollapseblog.com

The 22 statistics detailed here prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America.

The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.

So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.

Giant Sucking Sound

The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker 10 times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool.

What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are "less attractive" than ever. Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States.

So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay. More...