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The New Reality Of The 'Economic Recovery' For American Workers

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Wolf Richter   www.testosteronepit.com   www.amazon.com/author/wolfrichter

Despite optimism-mongering in the media and in certain quarters of Washington and elsewhere, we’ve had indication after indication in the economic data that whatever lousy progress has been made in nudging up GDP, American workers have not benefited from it. But now we know from the horse’s mouth, so to speak: they’re mired in a tough new reality that is in many ways getting worse.

“Deeply pessimistic” is the term used in the sobering survey, “Diminished Lives and Futures: A Portrait of America in the Great-Recession Era.” A confirmation of bits and pieces of economic data that has been trickling in over the years on this topic.

Just today, for example, the Bureau of Labor Statistics reported that wages adjusted for inflation had continued their morose decline: in 2012, by 0.4% after having already declined 0.5% in 2011. It doesn’t seem much. With nominal wages rising, workers might temporarily be fooled into thinking that they’re moving ahead. But enough of those declines, and pretty soon you’re talking about some real money.

They compound the lingering impact of the financial crisis. “Five years of economic misery have profoundly diminished Americans’ confidence in the economy and their outlook for the next generation,” conclude the authors of the survey. And yet, since 2007, Congress borrowed $8 trillion, nearly doubling the US gross national debt to $16.48 trillion, and the Fed printed another $2.1 trillion, all under the unholy pretext of wanting to stimulate the economy [Corporations Are Begging: We Need More Inflation!].

The survey draws a dire picture of the employment situation: 23% of the respondents had been laid off during the past four years. Of them, 10% spent more than two years looking for a job before they found one, and 22% still haven’t found one. While the economy has created jobs over the last few years, it has done so at a rate that barely kept up with the growth of the labor force.

If that: in the 2013 survey, 58% of the respondents had a job, down from the 2010 survey, when 60% had a job. The lower income categories were hardest hit. Only 38% of those normally earning under $30,000 had jobs, while 71% of those over $60,000 had jobs.

Where has all the money gone that the government borrowed and spent, and that the Fed printed? To China, Brazil, Mexico, into commodities, wars, farmland, into every conceivable financial asset, creating bubbles here and there, including the most gigantic credit bubble ever. Some people around the world have become immensely rich. And others, who’d already been immensely rich but had gotten a haircut during the financial crisis, were bailed out. Good for them. But it just hasn’t created a lot of jobs in the US.

That’s the good news. The bad news: a stunning 54% of those who’d been laid off and were lucky enough to find a job, now make less money than before. Less money in nominal terms, not even adjusted for inflation. A third of them got whacked by a pay cut of 11% to 30%. Another third reported that their pay had been slashed by over 30%. Ouch!

This new reality—finally finding a job but at much lower pay, or hanging on to a job but with a cut in pay—has sucked optimism out of the system. “Not only does the public not see signs of economic recovery now, they don’t see it in the near future either,” finds the report. And 32% of the people expect it to get even worse. A worrisome deterioration from 2010, when only 27% expected it to get worse.

Full recovery anytime soon? Only 12% expect it in the “near future”; 25% expect it to take 6-10 years, and 29% think that the economy will “never” fully recover. Mainstream-media optimism hasn’t quite sunk in yet, apparently.

They put their pessimistic finger where it hurts: GDP doesn’t measure anything but spending as a whole and is useless for individuals. Per-capita GDP, while still inadequate, would be a better measure. Alas, it’s well below the pre-recession peak, and thus silenced to death.

So, 60% of the people believe that there is a “new normal,” a tough new reality where workers have to take jobs below their skill level, at lower pay, and with less job security—because they’re lucky to even find a job.

To survive in this new normal, workers raided their savings. Even after all these years since the recession officially ended, 38% have “a lot less” money in savings than they had before, 18% have “a little less.” But the piggy bank is hard to refill as workers earn less, while prices continue to rise—thanks to the “bold” and “courageous” actions by the Fed.

“The Great Recession’s scope and impact was so widespread and corrosive that it will likely affect individuals, families, and the nation for many years to come,” the report concludes. On the other hand, after a drunken deficit-spending frenzy by Congress that left behind a mountain of new debt, and after a delirious money-printing orgy by the Fed that left behind a debased dollar, our hapless American workers are now also saddled with banks that are too big to fail, and it turns out, “too big to jail.”

With the average cost of attending college in America at $120,000, a family of four should expect their children’s college to cost more than a home. Yet, the perceived value of education provided justification for students to borrow $42 billion from the US this year. And many of them will end up as student-loan debt slaves. Read....  College Graduates Are The New Debt Slaves.

 


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Fri, 02/08/2013 - 22:48 | Link to Comment Billy Shears
Billy Shears's picture

Reminds me of that scene in Scarface when Pacino is at the beach in Miami and says to his partner something like "Miami, is like a great big pussy just waitin' to be fucked!" Well, that is what America was but now it has been FUCKED and it's time for the international criminal corporate/bankster class to hi-tail it out of Dodge. They've wrung us for every penny and just as a little parting gift they double the national debt to see to it that America will never, ever be what it once was and maybe that's a good thing but we've been sold down the river. Sleep well!

Fri, 02/08/2013 - 21:52 | Link to Comment swamp
Fri, 02/08/2013 - 21:52 | Link to Comment swamp
Fri, 02/08/2013 - 21:42 | Link to Comment adr
adr's picture

Just in case my company goes under I applied for another job, a highly skilled design position. I currently make $60k plus some royalties, which is low but I get to stay in Ohio. In 1997 jobs in my vocation were paying $60-80k right out of college. If you have ten years of experience you are lucky to make $50k right now.

The offer from the other company, $38k. Thirty eight fucking thousand dollars. Absolute horseshit.

They don't care about experience because there are literally thousands of college graduates that would work for $30k if they were offered the job, in fact they would probably work for $25k. I was told the offer of $38k was because I had extensive experience in client communications and could really help grow their company.

I politely told them to kiss my ass and I wasn't going to make them millions of dollars to be a wage slave. Yes, I design the products that bring in millions of dollars per year for whatever company I design them for. I'm not taking thirty eight fucking thousand dollars for that.

BUT THAT'S THE NEW BUSINESS WORLD. The productive eat shit and the directors that couldn't run the only lemonade stand in town on a 100 degree day get to grant themselves millions of dollars a year.

Well I hope my company doesn't go under.

Fri, 02/08/2013 - 19:44 | Link to Comment WTFUD
WTFUD's picture

You elect your representitives who then spend 360 days dining with lobbyists or special interests and the other 5 days seeking your approval for another term! Wake TFU or SHFU.

Fri, 02/08/2013 - 18:23 | Link to Comment panic
panic's picture

In Michigan it's coming down.  Last year the State Tax on pensions minimized and money given to corporations to hire 4 people and 100 robots. This year, the Guv'ner wants an 11c increase per gallon gas tax, an average $120 increase in vehicle registration cost and fishing and hunting cost increase.  Change the oil now he says or repair the engine later! As an aside, they are not puting the cost of your health insurance on your w2 for no reason.  Very, very, soon it's going to be taxable income. Your ministry is strong!

Fri, 02/08/2013 - 16:31 | Link to Comment decentralizedsc...
decentralizedscutinizer's picture

And the best you bitchez can think of to do is piss and moan about how you're being robbed. You're helpless victims of a corrupt system and there's nothing you can do about. Woe is me.

For all the bytes you waste repeating the obvious you could be organizing a constitutional amendment to break up the unholy alliance between the banks and the government. It ain't "the man" holding you down: it's you.

But keep bitchin. Sooner or later the Masters of the Global Empire will throw you a bone.

Oh; unless you think the collapse of this system will result in a better system somehow, magically, out-of-nowhere, handed down from above, from someone empowered to think for you, wearing a suit, with a higher degree, higher pay grade, better conections, someone with a microphone that can parse "is" for you, a charismatic leader perhaps (?)

But I got an inside tip that nothing is going to get fixed unless you, yourself, fix it.

It's not like there aren't solutions readily accessible. Here's one you haven't tried:

  28th Amendment

"Corporations are not persons in any sense of the word and shall be granted only those rights and privileges that Congress deems necessary for the well-being of the People. Congress shall provide legislation defining the terms and conditions of corporate charters according to their purpose; which shall include, but are not limited to: 1, prohibitions against any corporation becoming so large its failure would pose a threat to national security or harm the general economy; 2, prohibitions against any form of interference in the affairs of government, education, and news media; and 3, provisions for civil and criminal penalties to be paid by corporate executives for violation of the terms of a corporate charter."

The corpozombies at MTA got a couple Democratic corporatists to introduce a constitutional amendment (which is still a big secret but due to be unveiled Monday) that I'm betting will officially usher in the Global Corpocratic Empire. If you think times are tough now; wait till the US officially collapses. It won't be the end of a corrupt system; it will be the beginning of a whole new Hell.

So, yeah, let's wait till it all collapses; bitchez !

 

 

 

 

 

 

 

Fri, 02/08/2013 - 20:00 | Link to Comment The Miser
The Miser's picture

Add in the unions and you have something.

Fri, 02/08/2013 - 22:54 | Link to Comment decentralizedsc...
decentralizedscutinizer's picture

Unions are incorporated entities, too. So are political parties, PAC's, etc. They could still promote their causes, but they'd be forbidden to lobby or otherwise interfere with the affairs of government; like elections. They'd be chartered; but like the Constitution itself, they'd be severely limited in what they could do. Basically, this amendment intends to make conflicts of interest a felony. I wouldn't mind making some actions arising from such conflicts to be considered treason if international corps are involved.

Textbook publishers would have to follow wikipedia's model for academic transparency.

Corporate media could be prosecuted for biased news reporting if a "pattern of abuse" was evident and a jury was presented with a "preponderance of evidence" showing deception or misdirection.

It could all be decided and defined in their charters; the crime would then be "violation of charter" ;  in itself - a crime. Goodbye corporate veil.

Thanks for joining the discussion - there's a lot to talk about.

Fri, 02/08/2013 - 17:02 | Link to Comment NidStyles
NidStyles's picture

The perpetual lesson is this: Government cannot fix Government.

 

One day that lesson will stick.

Fri, 02/08/2013 - 17:26 | Link to Comment decentralizedsc...
decentralizedscutinizer's picture

Government is not responsible for fixing itself; the governed are. Your excuse is lame.

That's not a lesson, it's a cop-out!

Fri, 02/08/2013 - 16:48 | Link to Comment Winston Churchill
Winston Churchill's picture

You're about $50tn dollars short ,and five decades late.

The system is inside the event horizon ,and cannot be reformed,

The gravity created by special interests has it trapped.

Sat, 02/09/2013 - 15:12 | Link to Comment decentralizedsc...
decentralizedscutinizer's picture

The "gravity" of a few predators is no match for the "gravity" of an informed population. Don't mistake a real black hole for a cloud of ignorance. There is no amount of gravity that can pull the truth down, once it is seen.

Fri, 02/08/2013 - 16:13 | Link to Comment ramacers
ramacers's picture

wait till the bellies get empty. oooh, it'll be bloody ugly.

Fri, 02/08/2013 - 15:57 | Link to Comment Notarocketscientist
Notarocketscientist's picture

Fuck America - YA!

Fri, 02/08/2013 - 15:49 | Link to Comment Stuck on Zero
Stuck on Zero's picture

American workers are saddled with massive and oppresive government regulation, red tape, corruption, MBAs, huge taxes, high costs, and poor education.  I don't see any problem.

 

Fri, 02/08/2013 - 15:45 | Link to Comment davidsmith
davidsmith's picture

There's $40 trillion more to loot from Americans.  They're going to get a LOT poorer.  Boiling frogs.

Fri, 02/08/2013 - 15:40 | Link to Comment q99x2
q99x2's picture

If students put their student loan money in the stock market and take it out at the end of 4 years they will have a bundle to turn this economy around. Except if banksters are still out of prison at that time they will steal it from the students. So two things that gotta be done. More money to students and banksters in prison.

Fri, 02/08/2013 - 15:23 | Link to Comment MethodMan
MethodMan's picture

Try to explain to the average Joe how printing money destroys wealth and opportunity for all but a few. Bernanke knows though.

Fri, 02/08/2013 - 16:04 | Link to Comment orez65
orez65's picture

You are correct, but is not just the average Joe.

Engineers, lawyers, school superintendents, medical doctors ...

I've talked to them, many are my friends.

But they just don't fucking get it!!

They've been brainwashed to believe that US Dollars are money.

Shit, I even point out to them to read it right on any dollar denomination: "This NOTE is legal tender for all debts, public and private"

It's a fucking NOTE, it's not MONEY you fucking idiots!!!

Fri, 02/08/2013 - 16:13 | Link to Comment knukles
knukles's picture

Zatz right!

Note, as in obligation.
Debt obligation.
Is a liability of the Federal Reserve Bank
Has no maturity and
Pays no interest.

A Zero Coupon Perpetual.

Fri, 02/08/2013 - 15:12 | Link to Comment cesarsp_us
cesarsp_us's picture

Welcome to the new AMeriKA Bitches 

Fri, 02/08/2013 - 14:44 | Link to Comment eddiebe
eddiebe's picture

Bend over bitcheez!

Fri, 02/08/2013 - 13:55 | Link to Comment disabledvet
disabledvet's picture

The "system" cannot abide by falling prices. For ANYTHING. I would argue "if the plan is to inflate all assets save the dollar" then the Fed has completely failed. we are still no where near the speculative blow off tops of 2008...and indeed are massively DEFLATING across the bulk of asset types save equities. The only "print" we're waiting to see "is a GM hybrid commercial truck that gets a thousand miles to a gallon for 5000 bucks."

Fri, 02/08/2013 - 21:00 | Link to Comment SilverRhino
SilverRhino's picture

Apparently the "system" has absolutely zero problems with the price of LABOR falling.   

Fri, 02/08/2013 - 20:31 | Link to Comment Buck Johnson
Buck Johnson's picture

They  don't want deflation, but it will come trust me.

Fri, 02/08/2013 - 17:00 | Link to Comment NidStyles
NidStyles's picture

Prices have to fall, or the standard of living will never get any better than it is.

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