First, I want to thank Kartik for inviting me to contribute to The Florida Squeeze. His blog is the best place for news, commentary, and down right substantive discussions about how we can make Florida and the country better as we move into the future. My blog will focus on the economy here in Florida, the country as a whole, and of course, all in a global context. We’ll take a look at some of society’s most pressing issues: income/wealth inequality, social mobility, job creation, infrastructure, health care access, etc and finding solutions to those issues so we can begin to put Florida and America back on the right track. Before we can get started on finding solutions to problems, we have to identify what the problems actually are and believe me, there are a lot of them.
Let’s get started.
I hate to be the bearer of bad news to delusional Democrats and the puppet punditocracy they follow religiously but the United States is NOT in a better position than before the recession. In fact, the majority of Americans are making less than they were before the financial collapse. According to one recent survey, 76 percent of all Americans are living paycheck to paycheck. Let that sink in.
Before you get all pissy and start yelling at me about what President Obama inherited, let me say there is no doubt that this administration inherited a shit sandwich. The point here, is Obama tried to fix a shit sandwich by adding ketchup rather than fixing the root of the problem: that our sandwich was indeed made of shit and not even the world’s best condiment can cover up that fact. Perhaps we should have changed the ingredients aka our institutions.
The economy is still teetering- the banks are still making risky bets with a taxpayer funded safety net as insurance, the housing market is propped up by monthly Federal Reserve bond and Mortgage Backed Security purchases to the tune of $50 billion a month and the manufacturing sector is dying a slow and painful death. How painful you ask? Manufacturing sector jobs are continually shipped overseas at an alarming rate. There are fewer Americans employed in manufacturing now than there was in 1950 even though the population of the United States has more than doubled since then. Oh don’t worry this is just the tip of the iceberg. Let’s dig a little deeper.
By now, I’m sure you’re saying, “but Justin, we’ve added over 3 million jobs, unemployment is falling, and the stock market has more than doubled since Obama took office.” Well, let’s talk about that for a moment. The United States for quite some time, has been replacing good jobs with bad jobs. The Center for Economic Policy and Research defines a “good job” as one that pays at least $18.50 an hour, which according the same study, is the median hourly pay for American workers in 1979 post inflation adjustment. Secondly, the job must provide access to an employer based health insurance plan and furthermore, that employer must cover a portion of the cost of said plan. Finally, the job must provide access to an employer-sponsored retirement plan.
So, whats it like out there? 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs. Not a good ratio if you’re looking to build an economy fit for the future. How bad is it? In 1980 less than 30% of all jobs in America were low wage jobs or “bad jobs.” Now, more than 40% of all jobs in America are low wage or “bad jobs.” In reality, America has a higher percentage of workers doing low wage work than any other major industrialized nation does. Again, not great numbers if you’re trying to win the future in an era of ultra global competitiveness.
The Middle Class is eroding at the fastest pace in history. As of now, US Wages as a percentage of GDP are at an all-time low. As we continue the American past time of shipping good jobs out of the country, the competitiveness for the mediocre jobs left behind will continue to rise. Talk to your local restaurant manager in South Florida for example, about the amount of college grads looking for waitstaff jobs. It’s a disturbing trend. The creation of “McJobs” are not the way we can reclaim the future and rebuild our economy. We cannot build the future by creating jobs of the past.
I know what you’re thinking. The stock market continues to set new record seemingly on a daily basis. So that has to be good news right? Not so much. In fact, corporate profits as a percentage of GDP in America are at an all-time high. Meanwhile, wages as a percentage of GDP are near an all-time low. We’ve been waiting nearly for 40 years for returns from “trickle down” economics and guess what… we are still waiting. According to 2010 data, here is how income gains in the US were distributed:
The lucky Americans that do have a job, are barely making enough to provide for their families- the working poor. One out of every four American workers has a job that pays $10 an hour or less. Even more disturbing, an astounding 53 percent of all American workers make LESS than $30,000 a year. In other words, about one out of every four American workers brings home wages that are at or below the federal poverty level. Some “recovery right.” As commodity prices continue to trend upwards, median income has actually declined four years in a row to the tune of $4000 over that span.
It’s true. Corporate America and Wall Street USA, have flourished during his recovery. However, the majority of the Americans are struggling and arguably worse off than before the recession. President Obama like President Reagan, doesn’t realize that this recovery seems to be a tale of two cities as Mario Cuomo said. Yes the wealthy are doing well Mr President. How well? The wealthiest 1 percent of all Americans own more wealth than the bottom 95 percent COMBINED . Let me put it another way, 40 years ago the top 1/10,000th of US Households brought in about 1 percent of all income, today they bring about they bring in about 5 percent of all income.
It’s time we rebuild the middle class by remaking our institutions. I hope this inaugural piece opens your eyes to problems we face as a society and inspire you to join the conversation about what we can do to remedy it. If we sit idly by, not only will the middle class be eviscerated, our rights and our democracy may go with it.
I hope you’ll join the conversation. Thanks for reading.
Until Next Time,
JustinSnyderFL at gmail dot com