Wednesday, March 14, 2012

What Does America Look Like With No Middle Class?

A strong middle class has been at the core of what has been promoted as the American Dream.  How would America look like if the middle class simply vanished?  We may not need to wait too long at the current rate since we are quickly siphoning people off the middle class and throwing them into lower income brackets.  The vast majority of Americans do not buy into the propaganda promoted on the tightly controlled media outlets.  In fact, the latest Congressional job approval numbers are at a record low of 10 percent according to Gallup.  To put this low figure in perspective 16 percent of Americans approved of how BP handled the catastrophic Gulf oil spill at the peak of the blowout.  This low Congressional approval is all coming during a supposed economic recovery where 46,000,000 Americans receive a monthly charge to their debit card for food assistance.  Even government figures show the big job growth sectors of the next decade to be in low paying fields.  What would America look like without a middle class?

The era of the poor young worker
The recession has hit all groups hard but the deepest impact has been on young Americans.  Take a look at wages for young high school graduates:
young wage high school earners
Source:  Economic Policy Institute
The path is rather clear.  High school only graduates since the 1970s have seen their wages go steadily down.  Since the bulk of the workforce comes from this sector, it makes total sense that the average per capita income would be $25,000:
This seems rather stunning that in the most prosperous nation in the world wages are actually going down or sideways for most Americans.  So many young Americans have caught onto the trend.  A high school diploma isn’t enough to be competitive.  Many decided to take on massive debt and go to college.  As we have discussed, higher education is in a massive bubble and the return on investment for college graduates may have peaked out overall:
college graduate wages
Since the year 2000 college graduates wages for both men and women between the ages of 23 and 29 has moved consistently lower.  Since some of the better paying jobs are in STEM fields, those that go to for-profit institutions and pickup degrees in random disciplines not only find themselves with a degree that doesn’t aid in landing a job, but are now in massive amounts of debt which is hard to get rid of, even in bankruptcy.
Most college educated population finding growth in low paying jobs
I’m sure that you’ve heard of the cab driving scientists all across places like Eastern Europe.  Places that push many people through the education system even in fields with no jobs.  You wouldn’t expect this from the number one economy in the world right?  The current forecast for fields with high job prospects is rather sobering and this comes from the government itself:
fastest growing jobs in low wage jobs
Source:  BLS
The two fields with the largest number of jobs being added come from:
-Personal Care Aides (median annual wage of $19,640)
-Home Health Aides (median annual wage of $20,560)
In other words, jobs that will help the aging baby boomers do things they physically can no longer do.  The figures above align perfectly with the per capita average wage of $25,000 (in fact the $25,000 is high for these positions).  While these jobs show massive nominal growth, the third top field is deceptive in the above chart.  Biomedical Engineers are the third “fastest” growth field on a percentage basis but the jobs added are small with 9,700 jobs over the next decade (or 970 per year).  Compare that to 607,000 for personal care aides and 706,000 for home health aides.  You can do the above math and see how the middle class is simply being pushed out of the system.
The need for the two income household in many cases is now driven by pure economics.  Both people need to work just to keep the household income steady so they don’t have to end up on food assistance:
Then people wonder why the birthrate has fallen during the last decade.  It also doesn’t help that young Americans have moved back home:
Where is this recovery happening?  In the stock market?  Most Americans derive very little wealth from the stock market.  Most of the net worth of Americans is tied up in real estate and housing values are now at a post-bubble low.  Many of the companies have made giant profits by slashing wages and expanding overseas.  The silver lining is there is little way to outsource personal care aides and home health aides.  Even then, Japan is looking to add some competition:
japanese robot assistant
“(Tokyo University) Behind these brick walls of Japan’s top university, scientists are studying the future of household chores. And their solution to mopping, laundry and cleaning up the kitchen.
Well it lies in the hands of a robot known as AR, or “Assistant Robot.” AR has a host of high-tech functions which are possible because the robot can “see” three dimensional objects.”
Something tells me this robot doesn’t mind doing the household work on less than $20,000 a year.
More to the point though, you have the financial sector that has basically Congress on their dole and the American public fully realizes this.  The public understands the double standard at play.  Fierce austerity for the majority, crony capitalism and bailouts for the financial sector.  In other words, a healthy middle class is being replaced by an entrenched banking oligarchy.

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