How the Middle Class became Underclass

[Bob]

How the middle class became the underclass - Feb. 16, 2011 NEW YORK (CNNMoney) -- Are you better off than your parents?

Probably not if you're in the middle class. ncomes 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.

 

[Bob]

perhaps america is stirred from it's gadget induced coma? nah, labor unions, that's the problem

 

[scooterbug44]

I find that a little misleading - I do not think you are worse off than your parents if you make the same income once inflation comes into play.

Wish they would show a breakdown of households - my guess is that there are many more double income households than there were in '88 when working moms and double income households were rarer.

Loss of blue collar is a big reason for the stagnation - and the blame for that falls solidly on Wal-mart shoppers and the typical consumer.

Cheap consumerism sent jobs overseas.

 

[Bob Wells]

perhaps america is stirred from it's gadget induced coma? nah, labor unions, that's the problem

Just checking,are you blaming Labor Unions. If so Big Business searching for the almighty profit and cheaper labor sending jobs overseas, even at the cost of their country failing. No one wanting to pay a living wage and providing benefits for their workers. When it comes a point where big business can't build military equipment for their own country because they have outsourced all the factory jobs then its whose fault.

 

[wesman70]

Hate to do it, but gonna comment

We have a tendency to compartmentalize the problems and point fingers, but in all reality, you cannot do this if you are truly objective.

Big corporations are not some sacred entity that exist in a sterile environment independent of all other segments of society. They are part and parcel of labor and the regular Joe Sixpack stockholders who own portions of the company via 401k's and Roth accounts. They cannot be segmented out to blame for sending job's over seas. They have obligations to Joe Sixpack to earn returns on those 401k investments.

Labor and management share equal blame. Labor is to blame for wanting to do a job that requires minimal skill for a 6 figure income/benefit package. Corporations are to blame for agreeing to pay it in the first place.

Regardless of what those who follow Marxist principles would have us believe, profit is not a dirty word. If you or I take a risk in a venture, endure the stress of embarking on said risk, and create jobs as a result, we should reap the largest benefits of that risk. In addition, we should not be demonized for attempting to maximize those benefits without jeopardizing the enterprise itself.

The greater the risk, the greater the reward.

That being said, ethics and morality should play a part in our actions and should never be sacrificed in the name of greater profit.

 

[Mango]

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

Yeah sure, let's blame it on technology and globalization when the ugly truth is tax cuts for the wealthy, in addition to welfare they collect that they do not want you to know about, is one of many reasons for the income disparity we are seeing. I'm betting the average American has no clue that many of the wealthiest people have farms and are being paid not to farm them. Not only that, they don't even pay taxes on the land. Throw a cow or two on it and now you have a farm. Hell, the Rockefellers even built a fly fishing lodge charging $1700 a day for private lessons and revel in the scenery while they plot how to pillage the US coffers going forward.

Then there are the corporations that aren't even paying taxes.

http://articles.sfgate.com/2008-08-13/news/17123842_1_tax-foundation-income-taxes-zero-taxes

"A company will incorporate offshore where there are no taxes," he said. "That (parent) company charges the U.S. company lots of money for things like the trademark for the company logo. The U.S. company says, 'I made $50 million, but my stupid parent company charged me $50 million for the logo.' The U.S. company gets to deduct the royalty fees as an expense and move profits to the parent company offshore in a tax-free haven."

and Wesman, while I agree with parts of your post, I have to strongly disagree that corporations are beholden to Joe Six pack. They are beholden to the board of Directors, most of who don't even step foot in that business, (because they are busy farming :roll but own large shares of it.

 

[Bob]

We have a tendency to compartmentalize the problems and point fingers, but in all reality, you cannot do this if you are truly objective.

Big corporations are not some sacred entity that exist in a sterile environment independent of all other segments of society. They are part and parcel of labor and the regular Joe Sixpack stockholders who own portions of the company via 401k's and Roth accounts. They cannot be segmented out to blame for sending job's over seas. They have obligations to Joe Sixpack to earn returns on those 401k investments.

Labor and management share equal blame. Labor is to blame for wanting to do a job that requires minimal skill for a 6 figure income/benefit package. Corporations are to blame for agreeing to pay it in the first place.

Regardless of what those who follow Marxist principles would have us believe, profit is not a dirty word. If you or I take a risk in a venture, endure the stress of embarking on said risk, and create jobs as a result, we should reap the largest benefits of that risk. In addition, we should not be demonized for attempting to maximize those benefits without jeopardizing the enterprise itself.

The greater the risk, the greater the reward.

That being said, ethics and morality should play a part in our actions and should never be sacrificed in the name of greater profit.

it is exactly the mentality of the next earnings cycle that has led to the evisceration of our middle class. DC has been complicit in the entire process. trade imbalances, offshoring of manufacturing, making labor unions as paranoid objects are all part of the push for the great income disparities this country has. at what point is it enough? the upper class is bent on the creation of a 2 tiered society.

 

[scooterbug44]

Yes, politicians and lobbyists are to blame, but so are everyday Americans.

What you put in your shopping cart and where you shop has a lot to do with what jobs are available.

Manufacturing jobs didn't go to China overnight, and our factories wouldn't have shut down so quickly if the American consumer wasn't so willing to trade a quality American product for a cheap (and typically full of nasty chemicals) Chinese one.

As one of my favorite bumper stickers says "Has your job been sent overseas yet? No, well keep buying foreign!"

P.S. You can keep defending the unions, but they often made it an easy choice for companies to go elsewhere for labor with their demands and excesses. $100 million a year just on Viagra for retired autoworkers is not the best way to compete with a foreign import.

 

[idlewind]

Yeah sure, let's blame it on technology and globalization when the ugly truth is tax cuts for the wealthy, in addition to welfare they collect that they do not want you to know about, is one of many reasons for the income disparity we are seeing. I'm betting the average American has no clue that many of the wealthiest people have farms and are being paid not to farm them. Not only that, they don't even pay taxes on the land. Throw a cow or two on it and now you have a farm. Hell, the Rockefellers even built a fly fishing lodge charging $1700 a day for private lessons and revel in the scenery while they plot how to pillage the US coffers going forward.

Then there are the corporations that aren't even paying taxes.

Most U.S. firms paid no taxes over 7-year span - SFGate

"A company will incorporate offshore where there are no taxes," he said. "That (parent) company charges the U.S. company lots of money for things like the trademark for the company logo. The U.S. company says, 'I made $50 million, but my stupid parent company charged me $50 million for the logo.' The U.S. company gets to deduct the royalty fees as an expense and move profits to the parent company offshore in a tax-free haven."

and Wesman, while I agree with parts of your post, I have to strongly disagree that corporations are beholden to Joe Six pack. They are beholden to the board of Directors, most of who don't even step foot in that business, (because they are busy farming :roll but own large shares of it.

You have touched on a huge problem: corporate welfare. It is insane to pay people not to farm, to tax corporations at 34% and then return much of it back in rebates and tax breaks and give money to business to send overseas. Our tax rates could be at reasonable figures if we closed the loopholes and ended the welfare for the rich.