The James Petras website
"While progressives and leftists write about the “crises of capitalism”, manufacturers, petroleum companies, bankers and most other major corporations on both sides of the Atlantic and Pacific coast are chuckling all the way to the bank."
08.14.2010
the concentration and centralization of capital and has contributed to the rising rate of profits for the largest corporations."
Just another example of the rich getting richer while the middle class is not.
how do you create a situation where the rich would not get richer but the middle class would?
In a few years, no one will have to worry about it. There won't be a middle class. But at least we know what doesn't work: trickle-down tax cuts.
Just another example of the rich getting richer while the middle class is not.
The middle class is shrinking? By what measure?
The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.
So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.
The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker ten times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool....
What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about 6 unemployed Americans for every new job opening in the United States, and the number of "chronically unemployed" is absolutely soaring. There simply are not nearly enough jobs for everyone.
Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs.
But you can't raise a family on what you make flipping burgers at McDonald's or on what you bring in from greeting customers down at the local Wal-Mart.
The truth is that the middle class in America is dying -- and once it is gone it will be incredibly difficult to rebuild.
Read more: 22 Statistics That Prove The Middle Class Is Being Systematically Wiped Out Of Existence In America
61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.
36 percent of Americans say that they don't contribute anything to retirement savings.
A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
24% of American workers say that they have postponed their planned retirement age in the past year.
Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
We can't change human nature, so we are very unlikely to be able to do it in the private sector. It can be accomplished by a little fine tuning of our government though.how do you create a situation where the rich would not get richer but the middle class would?
In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
The top 1% of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.
In America today, the average time needed to find a job has risen to a record 35.2 weeks.
More than 40% of Americans who actually are employed are now working in service jobs, which are often very low paying.
For the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.
Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.
Nothing radical here, just some tweeking of what we already have. Allow everyone a reasonable opportunity to succeed by remoing barriers to success, but guarantee no one any success that they did not personally earn on their own merit regardless of race, religion, heritity, or socio-economic status.
The only radical thing was making the progressive tax system more progressive. Taxing the rich means that they have less to save and invest which means less capital goods which means less jobs and less growth for all of us. A low, flat tax is much more effective for growth and much more efficient.
Is it really radical? We already do it, what's radical about doing more of something we already do?
Not having a progressive income tax system means that we have to increase taxes on the not-so-wealthy. Taxing the middle class more means that they have less to save and invest which means less capital goos which means less jobs and less growth for all of us. A low, flat tax would only lead to increased wealth for the wealthy, every dollar that a wealthy person owns is a dollar that a middle class person can't own, every dollar that a middle class person doesn't own is a dollar they can't invest in either a direct economic investment or in the quality of life for their family.
The only radical thing was making the progressive tax system more progressive. Taxing the rich means that they have less to save and invest which means less capital goods which means less jobs and less growth for all of us. A low, flat tax is much more effective for growth and much more efficient.
Are we done now? That was a stupid page full of stupid, misleading statistics.
In this paper we explore the possibility that globalization has caused the most distributional stress for what we commonly refer to as the “middle class”, the large group of households that are neither wealthy nor poor, but that form the backbone of both the market economy and of democracy in most advanced societies.
Stuck In The Tunnel: Is Globalization Muddling The Middle Class?
how do you create a situation where the rich would not get richer but the middle class would?
Well, no. At least I'm not. I've been spending a fair amount of my leisure time lately with Fantasy Football and found that link on the fly before heading to work. Upon reflection, it appears a bit hyperbolic, and I agree that it doesn't stand up to scrutiny as "proof" of anything. But I'm not flinching in my belief that "free trade" and globalism are contributing to the stress felt by middle class families in the United States. Here's a more academic treatment of the subject:
Nobody wants that situation.
What you want to 'create' (for lack of a better word) is a situation where wealthy people create enough jobs to sustain a healthy middle/working class.
What you want to prevent is the middle class shrinking and the lower class growing.
The other thing you really want to avoid is the Poker Game where one person accumulates most of the chips. This forces the others to play on credit, then eventually drop out of the game. The poker game came to an end in 1929.
We never had that situation. People of all classes are tend to grow richer and richer all throughout American history.
And the middle class has more debt than ever before. How does that make them 'richer'?
I already found the flaw in the abstract of that study. "genuine distributional stress for middle-income households" Emphasis on households mine. You can't measure income by household becuase the size of households has generally declined over the years and less people in the household are working now.
Furthermore, a study on middle class incomes also has to recognize the fact that the population of any definition of middle class is not rigid. People go in and out of the middle class all the time. What may be a middle class family one year may be a rich family next and a poor family the year after.
In short, even where the transition to markets and to globalization has brought absolute income gains for middle-income households, and upward mobility in relative terms, it has also brought downward mobility for some and increased risk of downward mobility for many. Rags to riches stories are possible, but so are middle to rags stories.
The authors of the study adjusted for household per capita income.
It does. There's a whole section on class mobility, and it comes to the following conclusion:
Thomas Sowell said:Income Confusion
Anyone who follows the media has probably heard many times that the rich are getting richer, the poor are getting poorer, and incomes of the population in general are stagnating. Moreover, those who say such things can produce many statistics, including data from the Census Bureau, which seem to indicate that. On the other hand, income tax data recently released by the Internal Revenue Service seem to show the exact opposite: People in the bottom fifth of income-tax filers in 1996 had their incomes increase by 91 percent by 2005. The top one percent -- "the rich" who are supposed to be monopolizing the money, according to the left -- saw their incomes decline by a whopping 26 percent. Meanwhile, the average taxpayers' real income increased by 24 percent between 1996 and 2005.
How can all this be? How can official statistics from different agencies of the same government -- the Census Bureau and the IRS -- lead to such radically different conclusions? There are wild cards in such data that need to be kept in mind when you hear income statistics thrown around -- especially when they are thrown around by people who are trying to prove something for political purposes. One of these wild cards is that most Americans do not stay in the same income brackets throughout their lives. Millions of people move from one bracket to another in just a few years. What that means statistically is that comparing the top income bracket with the bottom income bracket over a period of years tells you nothing about what is happening to the actual flesh-and-blood human beings who are moving between brackets during those years. That is why the IRS data, which are for people 25 years old and older, and which follow the same individuals over time, find those in the bottom 20 percent of income-tax filers almost doubling their income in a decade. That is why they are no longer in the same bracket. That is also why the share of income going to the bottom 20 percent bracket can be going down, as the Census Bureau data show, while the income going to the people who began the decade in that bracket is going up by large amounts.
Is there a difference between per household per capita and just per capita?
Also, what about the idea I threw out there that less people are now working in the household (teenagers these days seem to be working less and less).
Is this the same approach to class mobility that sees it as a long-term equalizer of wealth? That same invalid definition?
Our objective in this paper is to assess how middle-income groups are faring with the global turn to the market. We suggest some simple measures of the middle—the size and income shares of households around the median (75/125%)—and their income status relative to wealthier counterparts. Our results point to genuine distributional stress for middle-income households, as well as public perceptions of such stress. They also suggest the need for new measures to capture distributional trends that are masked by aggregate measures. We posit that the fate of those in the middle merits new attention, as their political support and economic participation are critical to sustainable, market-oriented growth and poverty reduction in the long-term.
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