Endangered Species: The American Middle Class

I continue to follow and bring you information on the economics front that is depressing and for that I apologize. I wish I could be the bearer of really good news for a change but circumstances are what they are. I’m going to cite two more articles that have done extensive research into statistics that show that more and more middle class Americans are losing their socioeconomic status. I find this an appalling development because the strength of a democracy and a market economy lie in its middle class. We’re quite dependent–as an economy–on the buying power of households, further erosion of middle incomes can only eradicate any hope we have of steady growth. Then, there’s the social impact of accessibility to schools and other means of upward mobility. Limitations are by definition limiting. If we place limitations on the majority of American people, we limit our country.

The international version of Der Spiegel has an article that explains this trend in the U.S. First, Americans aren’t stupid. We know we’re losing ground.

According to a recent opinion poll, 70 percent of Americans believe that the recession is still in full swing. And this time it isn’t just the poor who are especially hard-hit, as they usually are during recessions.

This time the recession is also affecting well-educated people who had been earning a good living until now. These people, who see themselves as solidly middle-class, now feel more threatened than ever before in the country’s history. Four out of 10 Americans who consider themselves part of this class believe that they will be unable to maintain their social status.

No amount of cheerful discussion about the summer of recovery is going to change the outlook around us. You can see it every where. Things are not improving. The root cause of this is still the poor jobs market and the inability of the federal government to really grasp and do something significant about the problem. I still can’t believe that unemployment rates are where they are and that there is a threat of deflation and some policy folks are talking about the deficit. The deficit will close if people pay taxes and don’t require unemployment benefits and food stamps. Putting people back to work solves much of this issue. Why do so many government leaders refuse to see this? These rates of unemployment cannot be taken as the new normal.

In fact, the United States, in the wake of a real estate, financial economic and now debt crisis, which it still hasn’t overcome, is threatened by a social Ice Age more severe than anything the country has seen since the Great Depression.

The United States is experiencing the problem of long-term unemployment for the first time since World War II. The number of the long-term unemployed is already three times as high as it was during any crisis in the past, and it is still rising.

More than a year after the official end of the recession, the overall unemployment rate remains consistently above 9.5 percent. But this is just the official figure. When adjusted to include the people who have already given up looking for work or are barely surviving on the few hundred dollars they earn with a part-time job and are using up their savings, the real unemployment figure jumps to more than 17 percent.

In its current annual report, the US Department of Agriculture notes that “food insecurity” is on the rise, and that 50 million Americans couldn’t afford to buy enough food to stay healthy at some point last year. One in eight American adults and one in four children now survive on government food stamps. These are unbelievable numbers for the world’s richest nation.

The Dubya years should’ve put down the notion of any return to trickle down economics. Tax exemptions and reductions for the very rich do not create a vibrant economy. It creates asset bubbles. Why do we not see bold leadership on economic issues? Certainly, that’s been the main issue for the last two years in every election. Why do they not get it?

A recent NY Post op-ed ‘So long, middle class’ beats the wealthy’s drum against higher taxes –which is an argument that completely lacks merit–but gets the basic statistics correct.

Here are some of those statistics.

According to a 2009 poll, 61% of Americans “always or usually” live paycheck to paycheck, which was up from 49% in 2008 and 43% in 2007.

36% of Americans say that they don’t contribute anything to retirement saving

Only the top 5% of households have earned enough additional income to match the rise in housing costs since 1975

The bottom 40% of income earners now collectively own less than 1% of the nation’s wealth.

About 21% of all children are living below the poverty line in 2010 — the highest rate in 20 years.

According to Professor Emmanuel Saez of the University of California at Berkeley, the top 10% percent of Americans now take in approximately 50% of the income.

More than 40% of Americans who are employed now work in often low-paying service jobs.

Despite the financial crisis, the number of millionaires in the US rose a whopping 16% to 7.8 million in 2009.

For the first time in US history, more than 40 million Americans are on food stamps, and the US Department of Agriculture projects that number will go up to 43 million Americans in 2011

We’re still a very rich nation. Where the hell are our priorities? These are the kinds of statistics that lead a country into third world status and make them revolution prone. Right now, the anger is aimed at folks still coming into the U.S. looking for opportunities. The xenophobia recently has been way over the top. This anger needs to be channeled into something more productive; like working on policies to change the direction of these trends. We can’t continue to build massive jails instead of revitalized school houses and send young working class men and women into the military and to the Middle East as their only chance at training and upward mobility. This is not the behavior of a developed nation.

We need real change. It’s time to call out the Madison Avenue version of change for what it is. It’s more of the same. The bailout plans, the health care reform, the stimulus package did more for multinational entities than it has for our own neighbors. We need to start focusing and venting our frustration towards the politicians that put their lobbyist-in-training status above the interests of the nation.