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The Shriveling Middle Class In California
By Wolf Richter www.testosteronepit.com
An ominous trend picks up speed: the middle class is shriveling. In 1980, 60% of Californians lived in middle-income families. By 2010, only 47.9% did, according to a study by the Public Policy Institute of California (PPIC), a non-partisan research organization (24-page report PDF, 2-page summary PDF). Main culprits: declining incomes and disappearing jobs.
From 2007, when the recession began, through its end in 2009, family incomes across the spectrum dropped over 5%. But then, instead of going into recovery mode, they continued to go south for another 6% through 2010—the end of the timeframe of the study. Given the astronomical cost of living in California, the study defined a middle-income family as one that earned between $44,000 and $155,000 in 2010.
But the declines weren’t spread evenly across the income spectrum. Families whose incomes were in the top 10% saw their incomes decline 5%. Those at the bottom 10% of the spectrum, the poorest families in California, saw their incomes plummet by 21%.
In a further indictment of income inequality in California—something that is clearer than daylight if you walk or drive around with your eyes open—the upper 10% enjoyed incomes that were higher than those of their counterparts in the rest of the US, while the lowest 10% earned less than their counterparts elsewhere. And income inequality between to top 10% and the bottom 10% doubled since 1980, to where in 2010, the top end earned 12 times as much as the bottom 10%.
Family income is a factor of wages, hours worked, underemployment, and unemployment. The main culprit for the loss of family income during and after the recession was unemployment which, according to the Bureau of Labor Statistics, peaked at 12.5% from September through December 2010. It has since edged down but still hovers at 11.7% (preliminary, October 2011).
However, the BLS percentages of unemployment are a form of statistical hocus-pocus that distorts and understates the actual unemployment problem. Here are the raw numbers of employed people in California:
Peak employment in California occurred, according to the BLS, in January 2008, when 17,023,322 people were working. At the trough in August 2011—that’s correct, August 2011, that’s not a typo—only 15,830,729 people were working. During that period, 1,192,593 jobs had evaporated. Where the heck is the jobs recovery?
Maybe it’s in the future. Maybe it has started a couple of months ago. But there are certainly no signs of a jobs recovery in California before September 2011—and even that may turn out to be a fluke.
And if there actually is a jobs recovery that would raise family incomes? The PPIC warns:
If previous post-recession patterns repeat themselves, it is likely that lower-income families will recover much more slowly than those at the high end, potentially worsening income inequality that is already at a record high.
A thriving economy based on the American model requires a thriving and growing middle class. However, the current conditions—a shriveling middle class and rising income disparity—mark the transition to a banana republic.
Meanwhile, corporate tax dodging in California and elsewhere in the US puts the finger on the strenuously hushed-up Basic Flaw In The Tax Code.
Wolf Richter www.testosteronepit.com
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Phil Ochs. Yeah, there's a guy who looms large in pantheon of the loony left.
He's still relevant, man!
iamfoomanchoo
.
THE CULPRIT ............CORRUPT PUBLIC PENSIONS !
This is just a symptom of economic rape.
public sector = middle middle class
when you find yourself lower than a public worker, that's when you realize you are being screwed by private enterprise ideology of no union, global outsourcing, jobs and benefits for illegal immigrants, massive subsidies.
The suckers are private educated workers who thought they were capitalists and became anti-labor when pretty much every one of them skilled or not are just labor unless they have net liquid assets of $30M.
Just compare the two and see which one sounds like middle class to you?
public sector has 40 hr weeks, guaranteed retirement, job security, wage contracts, family friendly, good benefits.
private sector has unpaid overtime, 401k aka 101k, outsourcing, fired "at-will" employment contracts, non-compete agreements, discourages family time, age discrimination starting 50......all that for less money in the end.
private workers are more competitive and productive, but why are they working harder for less money?....because of false pride that they are somehow better than other laborers. If the government is so bad, then why are all the rich fucks in government as soon as they make the money?
Just go back in time and watch films of labor exploitation during the dust bowl. Federal government is the only one treating people with descency. Your high school reading list includes The Grapes of Wrath.
History repeats just when the generation that learned their lessons the hard way dies off.
I like your comments, but I don't think you have a concrete view of a workable society. We would agree that favoritism is unjust, particularly favoritism toward those who are already on sound footing. But from a starting point of equality under the law, you can't go the other way either. We see the results, it's human nature to want a free lunch, and to accept slavery of subtle kinds, like dependency slavery. Would the millions of dependents who now hold the country hostage have been able to fend for themselves if they had to do so? History suggests they would have found a way to get by if they'd not accepted dependency instead. Now they're slaves to self-justification, and we're enslaved to them - if they starve and die it's someone else's fault.
I'll take a free people and some starvation to a system that guarantees dependency. In that system, states and localities can do whatever they want - if they want to tax income 100% and distribute it amongst everyone equally, they can do so. But under progressivism, all solutions must effectively be national: If you leave the productive tax slaves an out, they'll take it. So your system of compassion must be total, affecting all people more or less equally. None can be allowed off the reservation, or the entire construct falls apart. That's why CA is failing, they forgot this important principle of totalitarianism. They tried to set up a progressive system without insuring a captive population would support the various ponzi schemes. They were stupid enough to think that everyone would love their gulag of compassion. Even though we have massive centralization, CA is so 'progressive' that neighboring states actually look great in comparison.
I imagine you have some post-collapse ideas about property rights. If so, I encourage you to adopt them wherever you live, if you can find consensus. Maybe you would care to share them.
Because the politician, who is supposed to represent the taxpayer instead circle-jerks with the union to screw the taxpayer for political power and self-enrichment.
> Federal government is the only one treating people with descency.
Ya, that sure is easy to do when you can print money and don't have to worry about staying in business on the merits of providing some benefit to society.
This has fuck all to do with anyone eschewing private unions.
exactly....we live in this socialism + capitalism world where some people get globally competitive wages yet some others have protected wages....you can't have partial free market or free trade.
But then who are the suckers believing in free market and who are the ones sucking off the government teat?
When you have free trade agreement thats hundreds of pages long, that's not free trade. That's tit for tat trade.
Oh, when are we going to get free market on politician's wages? where in capitalism says son of a rich men is guaranteed to become rich via inheritance?
private workers should have unions and public ones should not but today we have private workers being outsourced and public workers unionized with guaranteed six figure pensions.
lavish government pensions, healthcare, legions of no show jobs have effectively bankrupted most of the free world.
and the free world is responding with massive money printing which not only will completely marginalize these obscene social obligations to nothingness via inflation,
it also creates ZERO UPWARD MOBILITY.
record food and gas prices, coupled with decling wages and much higher future taxation thanks to obscene government obligations-keeps the poor perpetually poor and turns the middle class poor better than anything else possibly could on planet earth.
Just see any major urban US city as an example, or any haven for the super rich,
that is where the largest wealth and income gaps exist and the wealthy folks there adore it when the government is used like a $2whore to keep everyone else down.
Why the poor and the middle class think the folks responsible for the widest divergences in popserity on the planet are somehow in their corner is mind boggling,
and that would obviously all your big government labor unions who look down on the avg tax payer as a peasant.
What are you talking about? Look how much upward mobility Obummer utilized in this environment. Between him and his wife, Chaka, why they make George and Weezy look like kitchen help.
(my apologies for the 70's flashbacks)
Living in California, been here long enough that know that the last term Gov Moonbeam(Brown) served he signed a law giving public sector employess collective bargaining rights. This was the beginning of the Ponzi spiral up in public employee benefits and the death spiral down of the California private jobs market as ever more onerous fees and regulations get heaped on them to feed the beast. Now that Brown is back in he's been a busy little beaver feeding his union supporters while continuing to ramp the budget despite falling revenues. Likewise he and the rest of the DNC attempt to fill their voting base with illegals by stuffing them with benefits(recently signed Dream Act parts I & II, plus mediCal) not available to US citizens outside the state(hopefully a class action lawsuit on that soon) and enabling voter fraud.
At present California politics is just a big positive feedback loop of mostly public sector union money corrupting the majority party.
The public sector sucks off the capital of the private sector and we are quickly if not already past the private/public ratio tipping point which can be sustained as cities and counties in California are at the verge of or already are in bankruptcy(here too Brown signed another bill recently making that process harder for city/county bankruptcy and the state will pickup public employee benefits the city/county default on).
California is losing a jobs to Texas at a prodigious rate which will not slow until the state undergoes a political correction. Not likely very soon until all corporate and union money is taken out of the system.
For now, the public sector only has the appearance of a stable wage/benefit enviroment, this will increasingly become less so without productive capital to support it.
I just found out that a local firefighter pension plan which was recently outsourced to UBS (in order to get superior returns from "professional" management) is being churned to death. A plan that has less than 100 investments total had 3900 transactions last month, alone. At first I was wondering if they were getting in/out of every position, every day, but I found out that they are instead doing all of their transactions in $10k increments. They're fucking smurfing!
Makes me wonder if they've found a loophole to exploit at that level, or if it's merely a "big-enough" number that they can plausibly defend? Either way, I can't wait to see the details these transaction fees have on the fund performance. Boy, those firefighters are gonna be pissed. I wonder if UBS realizes that many of them are issued service pistols?
UBS worried about firefighters?
UBS didn't even give a shit about Nazi gold. The entire country of Switzerland survives on dirty money of kings, dictators (North Korea), drug lords, corrupt politicians, etc.
This anti-union knee jerk Repub drivel is getting to be too much. Think about it: what countries are doing (relatively) well? Let's see, top of the list is probably Germany, then the Nordics, Sweden, Norway, Denmark, then Holland, then probably Japan (wages high unemployment low), then let's see, what about Australia, New Zealand? What's one thing they all have in common: strong unions. They actually give a shit about the people doing the actual work.
It's the perennial debate between Capital and Labor: Workers Bad, Bosses Good. Oh, Ok, let's give 100% of the power to the bosses (capital), that's working out really well for the US, huh? They forgot one important thing: labor's wages are the actual money people need to buy stuff from the Bosses. Oops!
Have there been abuses by Labor? You bet. But the abuses by Capital are gargantuan by comparison, as detailed each and every single day here on ZH.
So please put on your thinking cap next time before you regurgitate all that "Workers Bad, Bosses Good" crap.
http://www.wimp.com/crisescapitalism/
FUCK THESE COMPANIES. THE ONLY PROBLEM IS HERE IN AMERICA (I CAN'T SPEAK FOR OTHER COUNTRIES-BUT MOST EUROPEAN SOCIETIES ARE MUCH MORE LAW ABIDING A FACT THAT IS WORTH EXPLORING/UNDERSTANDING) UNIONS ARE OFTEN AS CROOKED AS THE COMPANIES. AMERICA IS OVERFLOWING WITH SHITTY GREEDY IDIOTIC ASSHOLES. I THINK THE EUROPEAN PARADIGM WOULDN'T WORK IN US BECAUSE NO ONE HAS EVEN A MODICUM INTEGRITY. DRUG DEALERS ARE MORE HONEST THAN MOST COMPANIES/SENATORS.
You examples like most are classic Ponzis and are already foldingas seen in the cause of the Euro's demise. Japan just prints.
I took it as pro-union
good points.
"If the government is so bad, then why are all the rich fucks in government as soon as they make the money?"
It's the shortest distance between Point A and Point B(money).
P.S. Listed below are the names of poor lobbyists:
Sorry.
The countries doing well according to you,
are largely commodity based countries enjoying the sky high commodity prices.
Mind boggling that the big government promoting imbeciles have bankrupted most of the free world, including some of the most prosperous places mankind has ever seen,
and yet they still supporting the same epic fail ideology.
How fukking stupid are you people exactly?
THe avg poverty stricken American lives in twice the space and owns twice as many cars as the avg WORKING Euro. The idea that these liberal social shitholes largely devoid of any leading edge inovation where most people rent and take the bus are somehow utopic is borne of sheer and complete ignorance.
Maybe the idea that people are not dying to move there would give you imbeciles hint one.
IF Denmark, Germany, Canada et al are so wonderful, why isn's the world flooding there?
Oh yeah tons of commodities in Denmark, Holland, Germany...fail. But even so i'd rather have an economy based on commodities than one based on financial criminals (US, UK), massive war machinery (US), fast food (US), Pharma marketing (US), and for-profit health care (US).
Take your pick. But it doesn't matter what the economy is based on, my point gets to the share of society that goes to Capital and the share that goes to Labor. The countries I cite make things just a little more equitable. And guess what, it makes them better places to live. Unless of course you're already a billionaire...in which case I'd suggest an electrified fence with a minefield and some watchtowers...maybe an alligator moat for good measure.
No other system or country has done more for the advanced of mankind in the last 200yrs than the US and it is not close. Not close, not even in this world. Despite at times folks like the Arabs and now the communist China getting tons of cash-nothing moving mankind forward comes from there nor your utopic liberal social cesspools. I can live without French wine and German cars,
BOL living without US technology, drugs, medical equipment, Agric tech et al.
The species doubled it's lifespan in two and half generations only possible thanks to America.
It is so much better to live there, people are dying to move there everyday.
Oh wait they're not and something like being an immigrant and getting treated fairly in Germany is fairy tale material but forget that for now.
People die coming to the US for opportunity and become legal taxpayers everyday.
They don't in Denmark, Holland or any other of supposedly utopic existences.
Funny cause they would if they were really better places to live.
As far as the rest, the once most prosperous places on earth from Cook County Illinois,
to shining seas of California and not to excluse the wonderful beaches of Ibiza,
and the inventors of modern science, democracy et al including those responsible for the renassance,
the exit from the dark ages et al,
ARE ALL DEAD BROKE and it is not from too little government spending.
It was Euro's or recent Euro immigrants in the US that invented most of chemistry, metallurgy, engineering, electricity, antibiotics, etc.
U.S. invented nuclear weapons and is the only country to ever used them on a civilian population.
U.S. invented cold war to keep the war machine happy, same for vietnam, iraq,etc.
The U.S. has fucked up as much as it has suceeded. The average U.S. citizen is less educated and less traveled (especially outside the borders) than most Europeans.
Many american inventions were the results of naturalized foreign born citizens. Tesla comes to mind. Without Tesla ( Serbian born & educated there is no 20th century.
Pride goeth before a fall.
the world be be BETTER off without US "agric tech." In fact, many are rejecting it.
shark jump
I would say it was mostly Europe before 1900, and mostly America after 1900.
But who cares, it's over now. America has turned into a fascist multicultural Empire that is rapidly careening towards full collapse.
we're #1
we're #1
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i
cah
I love jingoism, a true sign of brainwashing and lack of critical thinking abilities.
don't put words in my mouth, sock-puppet.
You assert a bunch of msm lies as if they were facts and then start calling everybody an idiot. Epic lol.
Just for the record I am not in favor of any large concentrations of power- government, business, or labour.
So piss off.
The post was obviously directed towards the original poster. Buyt I guess the slipper fit given the response.
Surrender noted misinformation bot.
MSM lies like what? That Canada, New Zealand, Australia, Norway et al are commodity based counties and are enjoying a boom soley thanks to Washington printing money? While the rest of the euro social liberal cesspools have decimated their militaries, stolen ledions of R&D money to maintain the status quo or basically followed the liberal social playbook to a tee and are yet still dead broke.
Go land in the middle of Tokyo, not speaking Japanese with lint your pocket and report back how it goes.
Germany is being completely financed with worthless IOUS from the rest of Europe? Is that a lie too?
Partisan ideologues are forced to fantasize that citizens of northern European nations live in socialistic utopia, while all Americans would live in poverty if it wasn't for Uncle Sam.
Avg living space in USA=800sq ft
Avg living space in Europe=450sq ft
Avg cars owned in USA per family 1.5
Avg cars owned by Euro per family .5
Avg price of petrol in USA 3.55/gal
Avg price of petrol in Europe $7.10/gal
Avg citizen in the US is a homeowner and obese
Avg citizen in Europe is a renter and is not obese
Fantasize some more while big government has done nothing but stifle the personal freedom, humn evolution and innovation in the once bastion of human ingenuity and liberty called Europe.
Now go play pretend some more and I will dutifully seek out those dying immigrating to these utopic places on a daily basis.
"THe avg poverty stricken American lives in twice the space and owns twice as many cars as the avg WORKING Euro."
and then you compare averages
"IF Denmark, Germany, Canada et al are so wonderful, why isn's the world flooding there?"
They are. Big issues with that in Europe. Canada is kinda hard to sneak into, unless you walk over the north pole.
"Fantasize some more while big government has done nothing but stifle the personal freedom, humn evolution and innovation in the once bastion of human ingenuity and liberty called Europe."
I never said otherwise, and neither did the poster I was responding to.
You take a frustation with elite global capitalists to be somehow an endorsement of government labor unions and the political class.
You sir, are an utter moron
No one is flooding into Canada. The us/Canada border is mostly an imaginary line yet there are no hoards of migrants working their way up from Latin America?
Why is that?
Maybe it's too cold for them?
You don't know shit about Canada if you think people aren't immigrating there. There are millions of Chinese, Indian, Pakistani, Jamaican, etc immigrants in Canada. Have you seen the size of the Asian community in Vancouver? The West Indian community in Toronto? It's much easier to legally emigrate to Canada than it is to the US.
canada doesn't have any tortillas?
Um and the US is being financed with what, again?
(resounding silence as Republo-ideologue realizes that the US finances are the biggest Ponzi of them all...only the benefits go to corporations and billionaires instead of actual people...)
Really trying living one hour without US tech, drugs or medical equipment.
I can live without French wine and German cars, Swiss watches al of which could not possibly be made and sold worldwide with US tech.
Do you practive stupid in front of a mirror?
Now I've lived in both places and have two passports (I'm American but I speak German as well). Despite the bickering, ye (you plural bring it back) are both right. Both countries are FUCKED UP. German ECONOMY MAKES ZERO SENSE (THE WHOLE COUNTRY SHUTS DOWN FOR TWO MONTHS-TRY QUANTIFYING THAT). QUALITY OF LIFE IN AMERICA SUCKS DICK. IT'S A RAT RACE AND WE"VE ALL BEEN SOLD OUT BY THIS INSANE CORPORATIST MANIA. ANY NOTION OF A MERITOCRACY VANISHED MORE THAN A GENERATION AGO. HARD WORK MEANS NOTHING. IF YOU AREN'T RICH IN AMERICA THEN YOU PROBABLY NEVER WILL BE. Some european nations still have MOTHERFUCKING monarchies but in AMERICA my HEALTH INSURANCE IS $750 A MONTH. NOTHING IS FREE. PICK YOUR POISON. HAPPY IN SMALLER APARTMENT/CAR OR MISERABLE WITH SOME EXTRA SQUARE FEET AND NICER WHIP? WOMEN IN EUROPE ARE MUCH HOTTER (GERMANY NOT AS MUCH).
Only the benefits go to the top.
That is why obese people who own homes and cars in the US are farcically called "poverty stricken"
why the avg poverty stricken American lives in a bigger house than the working Euro.
trickle down failed,
the 99% really don't live in the top 1% of the worldwide population,
and the top 1/10000th of 1% of the historical humanity,
it is all imaginary, just listen to one of them. They in the top 99% of all humanity but because they not in the top 99.5% they are protesting and calling other's greedy.
Stupid people like you.
Ok so what I hear from Xk is fat, fat, fat. And only an Americunt could say that's GOOD. Fat people, fat houses, fat cars. Fat missiles killing kids on the other side of the globe. Fat banks kicking people out of their homes. And a fat central bank, printing the world's terms of trade currency so much that people riot across the world cuz their daily bread goes through the roof. That's your historic paradise, is it? No thanks. World would be better off without it. You can keep you iphone (and your superspy Big Brother too...)
you need to smoke a fatty
+ 1 Go get him!
Supersize me
anecdotally there are new properties going on the market (SoCa) all the time, although no one in their right mind would choose to sell in this market, some are compelled, and yes more than a few of those signs read foreclosure, bank owned, etc. what is different about the houses now and the houses a few years ago, is that the current wave of foreclosures is more at high end. when i go to my bank, yes its a big corporate bank, there is a different manager every few months. again it seems anecdotal that layoffs are now trickling down for former middle class, middle management positions. and the employment picture looks especially bad because a lot of baby boomers who are on the cusp of retirement are going early. and of course the real manufacturing base in CA is in housing.
When I saw closed up car dealer after car dealer in San Berdoo, I knew it was bad.
Such a pity, isn't Cali the home, the locus of Progressivism? And yet, like Detroit, the experiment continues to fail obviously. And no one gets it. the politician doesn't want to for fear of losing power, the bottom 10% cannot or will not because they would relinquish their claim on the paychecks of others. Oh, and be expected to provide for themselves.
It's far worse than that. As California has declined the liberals that inhabit it have taken their money and moved to places with "better quality of life" like Colorado, Idaho, Oregon, etc. Problem is, they leave behind the shit hole they created and bring all the policies that created that shit hole with them. And it's always just a "crazy coincidence" that all the places with "better quality of life" are 90%+ white areas.
California is nothing but a study in white flight. But the liberal whites fleeing from the brown tide in California would NEVER admit that. In fact, they'd pass a law to get you arrested for even suggesting such a thing if they could. So they sell their house in Cali for $1 million and take their wealth out to Idaho or Colorado but...there's no Starbucks, and the laws are "backwards." So strip malls sprout up like mushrooms to meet the yuppie Cali consumer needs and then the Cali transplants band together to start taking over local political offices, always starting with the school board. Then they impose their same failed philosophy on their new home, and ruin it too.
(As a footnote, Colorado was ruined years ago by this phenomenon. Idaho is on that road, but not quite there, saved by the depression.)
in my village there is redevelopment money (or was until Brown shut it off) the city is closing schools, ambulance service, and street lights, but there's money to buy property for a new BMW dealership. joke is: need an education? read the BMW manual.
White flight. Leaving California to the Mexicans.
It's not the "middle class" that's declining in Calfornia, it's that hard working whites are leaving and the Mexicans that came in can't maintain first world conditions. Look at Mexico - that's your future America.
time to enlist to be employed?
http://covert3.wordpress.com
Remember when they built airplanes in California, and semiconductors?
Before I left CA, I had to drive to Las Vegas to buy some paint for my boat (Zodiac), because the paint couldn't be sold or shipped to CA.
So, duo, you transported an illegal VOC product across state lines. You are an unconvicted felon and an environmental saboteur. By now, you're on the no-fly list with Achmed the Dead Terrorist and Alec Baldwin. Welcome to the America of Three Felonies A Day.
http://online.wsj.com/article/SB1000142405274870447150457443890083076084...