5 Facts That Show Half of America Is Seriously Struggling

The media celebrates "economic growth," while new data shows most Americans are barely surviving.

By Paul Buchheit / AlterNet

February 8, 2015

Happy Monday! S&P 500 now up 10% for year --CNN Money
Third-quarter U.S. economic growth strongest in 11 years --Reuters
The U.S. economy is on a tear --Wall Street Journal 

Half of our nation, by all reasonable estimates of human need, is in poverty. The jubilant headlines above speak for people whose view is distorted by growing financial wealth. The argument for a barely surviving half of America has been made before, but important new data is available to strengthen the case.

1. No Money for Unexpected Bills 

A recent Bankrate poll found that almost two-thirds of Americans didn't have savings available to cover a $500 repair bill or a $1,000 emergency room visit.

A related Pew survey concluded that over half of U.S. households have less than one month's income in readily available savings, and that ALL their savings -- including retirement funds -- amounted to only about four months of income.

And young adults? A negative savings rate, as reported by the Wall Street Journal. Before the recession their savings rate was a reasonably healthy 5 percent.

2. 40 Percent Collapse in Household Wealth 

Over half of Americans have good reason to feel poor. Between 2007 and 2013 median wealth dropped a shocking 40 percent, leaving the poorest half with negative wealth (because of debt), and a full 60% of households owning, in total, about as much as the nation's 94 richest individuals.

People of color fare the worst, with half of black households owning less than $11,000 in total wealth, and Hispanic households less than $14,000. The median net worth for white households is about $142,000.

3. Cost of Living Surges as Income Falls 

Official poverty measures are based largely on the food costs of the 1950s. But food costs have doubledsince 1978, housing has more than tripled, and college tuition is eleven times higher. The cost of raising a child increased by 40 percent between 2000 and 2010. And despite the gains from Obamacare, health care expenses continue to grow.

As all these essential costs have been going up, median household income has been going down since 2000, with the greatest drop occurring since 2009, as 95 percent of the post-recession income gains have gone to the richest 1%.

4. Lots of New Jobs (Below Living Wage) 

'Amazing' jobs report, apart from wages --Marketwatch 

Amazing at the top and at the bottom. According to the Federal Reserve Bank, there have been job gains at the highest paid level -- engineering, finance, computer analysis; and there have been job gains at thelowest paid level -- personal health care, retail, and food preparation.

But the jobs that kept the middle class out of poverty -- education, construction, social services, transportation, administration -- have seen a decline since the recession, especially in the northeast. At a national level jobs gained are paying 23 percent less than jobs lost.

Worse yet, the lowest paid workers, those in housekeeping and home health care and food service, haveseen their wages drop 6 to 8 percent (although wages overall rose about 2 percent in 2014).

5. Our Greatest Shame: Half of the Children Feeling Poverty 

Over half of public school students are poor enough to qualify for lunch subsidies. There's been a stunning70 percent increase since the recession in the number of children on food stamps. State of Working America reported that almost half of black children under the age of six are living in poverty.

The celebratory quotes about a booming economy seem so far away.

US Incomes plummet to worst in 20 years

RT: March 01, 2013


Americans spent slightly more of their money in January than the month before, the latest Commerce Department report shows, but the rate of income growth hit a 20-year low.

Yes, it was a good month for the US economy in terms of pumping money away on utilities like gas and electric. The Commerce Department said on Friday that consumer spending increased 0.2 percent compared with December — on par more or less with what most economists had predicted — and largely due to a surge in demand for utilities during the winter months. But while that statistic is being touted as a signal of the strengthening economy, other indicators suggest things are not as sound as they may seem.

Personal incomes plummeted in January, the new report adds, with that month’s drop of 3.6 percent being the most significant downward change since January 1993 when Pres. Bill Clinton was just beginning his first term in office. Coupled with a slight surge in spending, the latest news means Americans are largely spending more money than before while saving less.

The news comes only days after a study released by the website Bankrate.com found that barely half of Americans have more money in their savings account then they owe in credit card debt.

Yelena Shulyatyeva, an economist at BNP Paribas, New York, tells Reuters that this could be the start of something much more serious. "We expect a significant decrease in real consumer spending in the first half of the year," says Shulyatyeva. Additionally, the economist says this could mean some underwhelming news for the GDP this quarter.

Speaking to the Associated Press, BMO Capital Markets senior economist Jennifer Lee says that a slight hike in taxes starting on the first of the year is partially to blame for what could become a serious problem in the months to come. "The sting of higher taxes hit home at the start of the year. This will cool spending in the next few months before consumers adjust to higher rates."

James Marple, a senior economist at TD Economics, adds in a USA Today report that, given the latest changes in tax rates and spending cuts, growth during the first half of 2013 is unlikely to exceed a rate of 2 percent.

"At this pace, the unemployment will not improve and pressure will remain on the Federal Reserve to continue its asset purchase program,” Marple said.

Earlier in the week, an analysis conducted by MSCI Inc. concluded that current economy-saving policies enacted by Federal Reserve Chairman Ben Bernanke could cause the country’s central bank to lose half a trillion dollars during the next three years.

January’s 3.6 percent decline in income growth comes after an increase of 2.6 percent one month earlier, results that are typical given the holiday shopping season.

Welcome to the Next Great Depression

(My next music project is also being called "The Next Great Depression." Hey, it's a very stark and drastic term--it's also our future, sadly. Because we let greedy bastards decide our economic fate. I truly hope none of us suffer as badly as it seems like we will.--jef)

+++++++

August 4, 2011 by CommonDreams.org
The Beast Is Starved
by John Atcheson

 

Since Reagan, Republicans have been on a “starve the beast” campaign – by which they mean eviscerate the government by taking away as much revenue as they can.

Starving the beast has been the biggest bait and switch con game that has ever been perpetrated on the American people.  And the most tragic. "Well, if past is prologue, welcome to the next Great Depression." 

As Paul Krugman pointed out, Republicans offered popular tax cuts so that they could later cut popular government programs “as a necessity.”  Oh, we’d love to continue providing low cost, effective medical care under Medicare, but you see, the country just can’t afford it … Of course we can’t.  Billionaire hedge fund managers and Wall Street traders pay less in taxes than their secretaries.  And most corporations pay little or no taxes.

Starve the Beast was coupled with a clever campaign to make government appear to be a collection of bumbling bureaucrats who wasted tax money for pure pleasure.  Long after it became politically impossible to stereotype racial and ethnic groups (with the possible exceptions of Muslims) it was – and is – quite acceptable to characterize government workers as shiftless, lazy and incompetent.

As a result, once the Republicans succeeded in cutting government revenue to the bone and beyond, it became impossible to raise taxes – who wants to give any more of their hard earned money to a bunch of lazy bureaucrats?

Never mind that most big government programs are far more efficient than their private sector equivalents.  That’s a mere fact.  Can’t let that get in the way of starving the beast.

Bait and switch.  Divide and Conquer.

So, after starting with a surplus in 2000, Republicans used two wars, two rounds of tax cuts, and a giant giveaway to big Pharma, to get the country racking up debt like a drunken sailor. 

Along comes the Bush recession, and the debt accelerates, and the Republicans declare the debt to be an “emergency” and right on schedule immediately attack popular programs like Medicare, Medicaid, Social Security, Student loans –and virtually anything that doesn’t help the uber rich or the corporations suddenly must be cut if we are to stay solvent.

Never mind that cutting Social Security to balance the budget is like attacking the mailman because your car doesn’t work.  It has nothing to do with the budget – but again, that’s a mere fact.  When you’re drowning the beast, facts don’t matter.

So OK.  The beast is drowned. Keynes is dead.  Now what?

Well, if past is prologue, welcome to the next Great Depression. 

See, the dirty little secret is that we never had a debt “crisis.”  We had a jobs crisis. 

While Republicans were arguing about the faux “crisis” and the press and Obama joined them, we got a series of disturbing economic signals. Consumer confidence was down, manufacturing was off, May and June’s job numbers were pathetic. In fact, if not for a hiring binge by McDonald’s there would have been a net job loss in May. That’s something to hang your hat on: McDonalds accounted for what little job growth there was.  What’s next, America gets saved by an uptick in Wall Mart greeters?

Look. This whole drown the beast strategy has been nothing more than a stealth tactic for instituting an extremist version of a laissez faire, market uber-alles policy designed by and for the Plutocracy.

And to be sure, it’s worked great for them. Today, the richest 1% owns 40% of the nation's wealth, and the top 10% owns nearly 75% of it.

The rest of us?  Not so much.

Income and wealth inequality in the US has been increasing rapidly since Reagan,  (with a slight break under Clinton). In terms of income inequality, the US now ranks about the same as Ivory Coast, Uganda and Cameroon – countries not exactly noted for being prosperous, equitable and just societies.

News flash for all the debt mongers, Tea Partiers and other assorted ignoramuses. You can’t run a consumer-based economy when the vast majority of consumers don’t have enough money to buy anything.  After all, Paris Hilton can only buy so many yachts; Corporate CEOs can only purchase so many jetliners – even with their special jet tax credits; and Wall Street traders can only buy so many Bugattis.  But middle and working class Americans need to spend their money on food, lodging, and other necessities. 

Here’s the dirty little secret: Republicans want the economy to fail.  They want Obama to fail, and they don’t care who gets hurt in the process.  They want these things, because the beast is in the bathtub and they can almost taste its demise.

The pieces are in place for the Plutocrats final victory … an industry friendly Supreme Court; a Democratic Party that is either in collusion with the plutocrats, or so cowardly as to be neutered; a press that reports outlandish lies and objective facts as if they were equivalent; and a public that is dazed and confused and convinced the government is their enemy.

 But government isn’t the enemy.  Laissez faire economic policies are. Every time we’ve tried them, they've produced profound income inequalities and the severe economic downturns that inevitably follow.

With private industry sitting on top of some $2 trillion in profits, exporting jobs, and shutting down plants, only government spending stood between us and an economic Armageddon. 

Now, nothing does.

So, congratulations, America.  You’ve finally gotten big bad gubmint off your back.

Enjoy the coming Great Depression.

America Is Getting Poorer: The Proof Is In The Numbers

By Michael Snyder - Contributing Writer - 10-01-2010

How in the world can anyone claim that things are getting better?  Sometimes the numbers are so clear that they simply cannot be denied.  According to the U.S. Census Bureau, median household income in the United States fell from $51,726 in 2008 to $50,221 in 2009.  That was the second yearly decline in median household income in a row.  In other words, America is getting poorer.  


Just let that statistic above sink in for a little bit.  In 2009, American families had roughly $1,500 less coming in than the year before.  Not that the cost of living has gone down either.  Have you been to the supermarket lately?  Things are getting ridiculous out there.  In fact, middle class American families are being squeezed as never before.  More mothers and fathers are scrambling to find second and third jobs just to pay the mortgage and to keep the lights on and to put food on the table.  This is not a time of prosperity in America.  We are in a state of serious decline.

When you stop and analyze the new Census data, something jumps out at you right away.  You quickly realize that these income declines are not limited to just a few regions of the country - they are literally happening from coast to coast.

The U.S. economy is in deep, deep trouble and the proof is in the numbers.  The following are 12 statistics that reveal just how far the standard of living in America is declining....

1 - According to the Census Bureau, median household income dropped in 34 U.S. states in 2009, and the only state where median household income actually increased was in North Dakota.

2 - The Census Bureau data also revealed that of the 52 largest metro areas in America, only the city of San Antonio did not see a decline in median household income in 2009.

3 - 35 percent of all U.S. households now live on $35,000 or less.

4 - According to the Census Bureau, the percentage of Americans living below the poverty line is the highest it has been in 15 years.

5 - The number of Americans enrolled in the food stamp program passed the 41 million mark for the first time ever in June.

6 - The number of Americans in the food stamp program increased a staggering 55 percent from December 2007 to June 2010.

7 - One out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government.

8 - Nearly 10 million Americans now receive unemployment insurance, which is almost four times as many that were receiving it back in 2007.

9 - In 2009, U.S. consumer spending experienced the biggest decline since 1942.

10 - As millions of young Americans struggled just to survive, marriages fell to a record low in 2009.  Today, only 52% of Americans 18 years or older are married. 

11 - The only group that saw their household income increase in 2009 was those making $180,000 or more.

12- According to the Huffington Post, the gap between the richest and poorest Americans grew in 2009 to its largest margin ever....

The top-earning 20 percent of Americans – those making more than $100,000 each year – received 49.4 percent of all income generated in the U.S., compared with the 3.4 percent made by the bottom 20 percent of earners, those who fell below the poverty line, according to the new figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968.

Not that it is a bad thing to make money. 

The point is that the game is rigged and the bottom 80 percent of us are being left behind.

The middle class is being systematically destroyed.  At the rate we are going, we will eventually have a very small group of ultra-wealthy Americans and a gigantic mountain of very poor Americans that are barely able to survive.

The answer to this is not a "redistribution of wealth". 

What middle class Americans actually need are good jobs with good benefits.

You know, the kind of jobs that the U.S. economy used to produce.

For the vast majority of Americans, all they have to offer in the marketplace is their labor.  If they cannot get someone to hire them for a wage that will enable them to take care of their families then they simply cannot make it without government assistance.

But what our leaders have done in the name of "globalism" is that they have essentially merged our economy with the economies of nations such as China where blue collar workers are paid about a dollar an hour to do the same jobs that American workers get paid 15 to 20 dollars an hour to do.

As a result, jobs and factories are fleeing the United States so rapidly it is hard to even describe.  The deindustrialization of America is happening right in front of our eyes, but the American people have become so dumbed down that most of them don't even seem to have the capacity to understand what is going on. 

Quite a few advocates of "free trade" (which is not "free" or "fair" at all under our current system) have left comments on my columns telling me that the American people better just suck it up because this is how it is now and the world isn't going back.  These advocates of the globalist system say that the American people just need to toughen up and learn to compete and need to just accept that the standard of living for workers across the globe is going to be equalized and that is all there is to it.

So are you ready to have the same standard of living as a Chinese sweatshop worker who works 12 hours a day for one dollar an hour?

That is where we are headed.

But things did not have to be this way.  We did not have to merge our economy with communist China and allow them to keep their currency devalued 40 percent lower than it should be so that they could dump massive amounts of cheap goods on our shores.  We did not have to elect politicians that believe that "globalism" is the answer to all of our problems.  We did not have to sign on to the WTO, NAFTA and all the other "free trade" agreements that are destroying the American middle class.

Labor is now a global commodity.  American workers are now part of the global labor force.  The bargaining power of the average American worker has dropped through the floor.  Now the monolithic predator corporations that dominate our economy don't even have to deal with American workers if they don't want to.

Very few of our politicians admitted that merging us into a one world economy would mean a dramatic decline in the standard of living of middle class Americans.

But that is exactly what is happening.

Meanwhile, the federal government, our state governments and our local governments keep going into massive amounts of new debt in an effort to keep paying the bills. 

There are some state governments, like Illinois, that are basically flat broke.  In fact, Illinois doesn't even bother to pay many of their bills anymore.

Of course the federal government is the worst offender of them all.  The U.S. national debt is rapidly approaching $14 trillion, and most of us have gotten so accustomed to it that we don't even talk about it much anymore.

That is how bizarre things have gotten.

As America keeps getting poorer, and as U.S. taxpayers see their incomes continue to decline, how in the world are U.S. government finances going to turn around?

The truth is that our leaders should be in full blown crisis mode in an attempt to fix this thing.  Pieces of the U.S. economy are literally falling off all around us and our leaders are pushing the debt accelerator to the floor as we head toward a giant cliff.

But instead our politicians are prancing about the countryside telling us that everything is going to be just great as long as we cast our votes for them in the fall.

And the mainstream media keeps telling us that the "recession" is over and that soon the U.S. economy will be better than ever.

Is it any wonder that faith in the mainstream media is now at an all-time low?     

According to a new poll just released by Gallup, the number of Americans that have little to no trust in the mass media (57%) is at an all-time high.