This page has been archived and commenting is disabled.
The Mystery Of America's "Schrodinger" Middle Class, Which Is Either Thriving Or About To Go Extinct
On one hand, the US middle class has rarely if ever had it worse. At least, if one actually dares to venture into this thing called the real world, and/or believes the NYT's report: "Falling Wages at Factories Squeeze the Middle Class." Some excerpts:
For nearly 20 years, Darrell Eberhardt worked in an Ohio factory putting together wheelchairs, earning $18.50 an hour, enough to gain a toehold in the middle class and feel respected at work. He is still working with his hands, assembling seats for Chevrolet Cruze cars at the Camaco auto parts factory in Lorain, Ohio, but now he makes $10.50 an hour and is barely hanging on. “I’d like to earn more,” said Mr. Eberhardt, who is 49 and went back to school a few years ago to earn an associate’s degree. “But the chances of finding something like I used to have are slim to none.”
Even as the White House and leaders on Capitol Hill and in Fortune 500 boardrooms all agree that expanding the country’s manufacturing base is a key to prosperity, evidence is growing that the pay of many blue-collar jobs is shrinking to the point where they can no longer support a middle-class life.
In short: America's manufacturing sector is being obliterated: "A new study by the National Employment Law Project, to be released on Friday, reveals that many factory jobs nowadays pay far less than what workers in almost identical positions earned in the past.
Perhaps even more significant, while the typical production job in the manufacturing sector paid more than the private sector average in the 1980s, 1990s and early 2000s, that relationship flipped in 2007, and line work in factories now pays less than the typical private sector job. That gap has been widening — in 2013, production jobs paid an average of $19.29 an hour, compared with $20.13 for all private sector positions.
Pressured by temporary hiring practices and a sharp decrease in salaries in the auto parts sector, real wages for manufacturing workers fell by 4.4 percent from 2003 to 2013, NELP researchers found, nearly three times the decline for workers as a whole.
How is this possible: aren't post-bankruptcy GM, and Ford, now widely touted as a symbol of the New Normal American manufacturing renaissance? Well yes. But there is a problem: recall what we wrote in December 2010: 'Charting America's Transformation To A Part-Time Worker Society:"
one of the most important reasons for lower pay is the increased use of temporary workers. Some manufacturers have turned to staffing agencies for hiring rather than employing workers directly on their own payroll. For the first half of 2014, these agencies supplied one out of seven workers employed by auto parts manufacturers.
The increased use of these lower-paid workers, particularly on the assembly line, not only eats into the number of industry jobs available, but also has a ripple effect on full-time, regular workers. Even veteran full-time auto parts workers who have managed to work their way up the assembly-line chain of command have eked out only modest gains.
All of this should come as no surprise: we have covered the gutting of America's middle-class, and certainly the manufacturing sector, in the past.
What is however, quite amusing, if not shocking, is that just as the NYT was confirming what we have said for four years, Bloomberg came out with a piece extolling the renaissance that America's 99%-ers are supposedly enjoying. To wit:
Lower-wage workers saw bigger pay gains over the past year than the highest earners, reversing the trend from earlier stages of the recovery. While the improvement is nascent and minimal, the plunge in fuel prices is magnifying the effects.
Fatter paychecks bode well for economic growth as families at the lower end of the wage scale are more likely to spend extra cash than their wealthier counterparts, who tend to squirrel some of it away. That means the luxury categories such as private jets that dominated sales last year are giving way to the more mundane, including televisions and restaurant meals.
Really? America's middle class is earning more? Well, yes.... based on research by RBS and Goldman:
“For the first time, real paychecks of households in the middle class are not getting smaller anymore -- they’re getting incrementally bigger,” said Guy Berger, a U.S. economist at RBS Securities in Stamford, Connecticut. “This puts a little more strength behind consumer spending because you’re not very dependent on a small core of very wealthy households to power the recovery.”
Total income for those making less than $12.50 an hour climbed 3.8 percent in the year through October based on a three-month average adjusted for inflation, according to a Nov. 13 report by Goldman Sachs economists. The gain, which takes into account hourly wages, the length of the workweek and employment, exceeded that by any other group and compared with a 2.5 percent increase for those making $45 an hour or more.
Their bottom line: "The advance among the lowest earners was paced mainly by a pickup in hourly wages, while those at the upper end benefited more from a longer workweek, the report showed." See, on paper everyone is benefiting, just ignore the reality, which is this:
And then there is of course this:
What else does Bloomberg use to say the pain for the middle class if over:
Sentiment surveys are reflecting the improvement. Americans making from $15,000 to $25,000 a year have experienced the biggest jump in confidence in 2014 so far, according to data from the Conference Board, a New York-based research group. Those making more than $125,000 led the pack in 2013.
More jobs and cheaper gasoline are probably playing a role in lifting the average worker’s spirit. The unemployment rate dropped to a six-year low of 5.8 percent in October and payrolls are on track for their biggest gain since 1999, according to Labor Department data. Carpenter is among those benefiting. With a 25 minute drive to work each way, she was spending about $40 every week at the service station, she said. The drop in fuel prices has cut that to about $25 or $30. Combined with the raises, that means “I’ll actually be able to buy a little something this year” for the holidays, Carpenter said. “Last year I couldn’t.”
...
Stronger wage and salary growth is “essential to the macro outlook,” said Ellen Zentner, a senior economist at Morgan Stanley in New York. “You’ll get a more balanced consumer with spending across more income groups.”
Of course, there isn't any actual wage growth. There is a drop in gasoline prices, an increase in low-paying temp workers, a surge in waiters... and of course the all-important aspect of the "recovery" - hope, if only for what little is actually left of America's middle class.
So for all those - not in the 1% - who find solace that a Goldman spreadsheet says that are now earning more. Great. For everyone else, we go back to the words of Darrell Eberhart: "I’d like to earn more,” said Mr. Eberhardt, who is 49 and went back to school a few years ago to earn an associate’s degree. “But the chances of finding something like I used to have are slim to none."
In retrospect, there really isn't much of a mystery behind America's "Schrodinger" middle class; there is however a mystery as to who pays to collapse the wave-function of reality, allowing such propaganda puff pieces, which in the vein of Obamacare, seem to rely on one thing and one thing only: the "stupidity" of the American voter.
»
- 10742 reads
- Printer-friendly version
- Send to friend
- advertisements -
Breaking: MH17:
Who shot down MH17? NOW 47 Million Dollar reward for information
The GERMAN fraud investigation company Wifka has been charged with investigating the shoot down of Malaysian Airlines flight MH17. Their client is providing now 47 million dollars as a reward for information and evidence.
latest
http://tersee.com/#!q=MH17&t=text
Fart. You mean euros? Or Eros?
BREAKING NEWS: DefSec Hagel just resigned (was fired).
Oh, it's on like Donkey Kong in the Middle East now, baby. Shit just got real, yo!
Here come the boots on the ground and another broken Obama promise. Is anyone surprised?
EKM's gonna have a freaking field day with this one.
Just as with "Schrodinger's cat" thought experiment, it not an issue whether the cat is dead or alive as long as you never OBSERVE if it is!
Which is exactly what the Gubnint has been doing the past umpteen years with the economy by making up bullshit "recovery" numbers.
There is no mystery.
Gubbermint emplyees are doing well. All other jobs are going to hell in a hand basket.
Will the last Middle class worker please make sure all the others are buried?
Not really nice leaving them in the road...
Coming to MTV, the new reality show "The Proles of Detroit".....
Not at all.
Banksters love war. The sheeple are focusing on the banks now (finally)and a misdirection play is needed.
Pay no attention to the man behind the curtain as the banks will be holding your money hostage.
Bail in
Obola has the fix....import 35-50 million pennyless, illiterate illegals....who will suck the social safety net system dry and work for peanuts.
That will fix the Middle Class.
No, but it will please those "exceptional" businessmen and "brilliant" shareholders who'd fail without slave labor and other government subsidies. And isn't that what's really important?
"The chocolate ration has been increased to 20 grams per week..."
Yes, they believe it...DoubleThink...they make themselves believe it. Our new happy life...
Where is thy kitty. Time for a bath.
Http://Www.hedge.bz
No problem, central banksters got this shit! They just announced they'll be in charge of dictating where stawks should be, resume holiday festivities and various feasts and whatnot.
You have now entered the Twilight Zone.
In today's environment, finance, management excess and government take what used to be given to the value adding worker.
The parasites are winning and killing the host...
The host is extinct. The host was the middle class.
They (the oligarchs) are fighting amongst themselves over the phoney wealth created by the FED in a contest to see how much fake fiat wealth can be converted into gold, silver, real estate and weapons before the whole phony scheme explodes.
I'm so glad I'm part of the 0.01%. In mid-October I briefly fell out of the club, but everything's fine once again.
As I always say while sipping rum drinks from the aft sun deck of my 1000' yacht, "What are the poor people doing?"
The answer is always the same, "Who cares?"
The poor are devising a way to sink the 1000 foot yacht with .01% aboard.
The poor are too busy devising a way to eat.
So I guess a factory job is a superposition.
If you thought that manufacturing wages are plummeting now, wait until robots start replacing workers in earnest. The American middle class is now almost as mythical as the American Dream (you have to be sleeping to experience it), freedom in the land of the free, free and fair markets, and an honest politician in the home of the brave.
Whatever remnants of the middle class have survived from the 60s, they are being rapidly extinguished by low wages, high healthcare costs, no interest on deposits and increasing taxes and fees.
The American dystopia gets more perfect everyday.
You're right, of course. In 2 or 7 years time, we'll look back on today as the Golden Era.
"Hey, remember back in Nov of 14 when things weren't really, really, really, really, really fucked? They were only really, really, really, really fucked,"
"Oh, shit, yea. God, it was like I was having an orgasm 24/7, things were so good --- err, I mean, not so really, really, really, really bad."
"Oh, look, here comes Hillary, Michelle, and Nancy the dominatrixes!!! Wow! Look at the studs on their fucking whips. Hey, I got my cock out first! Do it to me, ladies. Do it to me. Who needs cock anyway in an ultimate dystopia."
Meanwhile, in earth orbit, the captain of the last extraterrestrial spaceship circling earth shook his head, and said, "Home, James"
ZH, you do realize that the difference between 10.33/hr in Sept and 10.34/hr in Oct is 40 cents more per week or $21/year ... so fuck you WE ARE ALL GETTING RICH RICH RICHHHHHH!
Super size McMeal Deal HERE I COME!
At a penny pay raise per month folks will be making like.....$10.58 by the time Obola leaves office. Now thats what we call a recovery. /s
If it gets bad enough the 1% will just leave. Like locust.
They leave to prey on new economies.
What is left at this point? They seem to have it all now.
At the rate things are going, there may be no place to leave to....
What is also needed is a graph that doesn't show a 100% increase----- in visual terms----that is barely perceptible, in real terms.
".... based on research by RBS and Goldman"
Anyone who believes ANYTHING that is excreted by either of these two organized crime syndicates, or their peers, is a complete and utter fool.
One is a well organized crime syndicate, the other is more along the lines of bumbline keystone copper allowed to hang around.
If GS says it, you can be sure their shears are sharpened for the next batch of sheep...
Middle class is thriving at the colleges and medical centers.
I bet that the cost per employee is going up very fast with all the new rules and regulations....the stiff get $10.20 an hour....but the cost to the company is more like $25.00 an hour with all the government regulation....so companies have to do more with less...and is GM hiring more factory workers now or more Attorneys...I go for the attorneys....
Attorneys don't have it so good these days either. There are plenty of NYC attorneys working at about $32.00 an hour.
Isn't part of this problem the fact that union dominated manufacturing for so long was over paying labor due to decades of raises far in excess of productivity gains? Maybe Mr. Eberhart's old job was never worth $18.50 an hour. Should he be able to make more? Of course. But in order to do so we have to start creating new businesses again and that's tough to do as long as we're operating under "you didn't build that" economic policies.
Yes, but to be fair
'Isn't part of this problem the fact that executive greed has dominated manufacturing for so long was over paying themselves due to decades of raises far in excess of productivity and revenue gains?'
Ask someone from the corporatocracy or .gov how the middle class is doing: "Recovering, ready to spend, all up from here."
Ask someone from the middle class how they are doing: "Going under, suffocating, sinking into poverty."
Isn't it awesome that the people that acutally build stuff get paid less than those that do not. Service economy ftmfw
The real 'Rich' live on estates.
The middle class lives in suburbia.
A casual drive through the suburbs reveals reality. Things are looking more and more like Detroit in most suburbs.
No one really disagrees with this, fundamentally. It is just that there are two kinds of people, those who acknowledge reality, and those who seek to avoid it.
There are always shysters who will produce statistics or other fantasy material for the second group to paper-over their windows with.
If the low wage people are getting bigger paychecks it's due to mandatory overtime. When you lay off half the company, the other half gets to make up the difference.
It's ok, at these pay rates they will still have holes in their socks.
I have relatives who work at Chrysler on the shop floor. All of them pull over 100K.
100K is the new 50K from yester year
Yester year? 1994 you mean?
I think 100K is middle class.
Schrodinger's cat outcome depends on the observer and if the observer is the government they ain't even looking for no cat.
No cat means no dead cat. No dead cat means no blame for said dead cat. No blame for said dead cat means no blame for mouse. No blame for mouse means no blame for stolen cheese. No blame for stolen cheese means no blame for unintended consequences. No blame for unintended consequences means two-legged rats are king.
I give this economy six more months. The "middle class" is truly just a jingle anymore. It means nothing at all. As a small business owner myself, I have never seen things as bad as they are now. No one has the disposable income anymore--or so it seems from my vantage point.
You are correct 100%
Christmas will be a small Visa/Mastercard affair for the few that have any room left on the cards. Of course the media will declare the season a victory and a new sign of recovery.
We have been in a depression since September 2008, PERIOD.
Why 2008?
We have been in a depression since September 2001, PERIOD.
What happened in September 2001 POOKIE?
Was your 401k/IRA routed by the tech bust like millions of others? Or are you referring to Mr. Greenspan turning on the credit faucet FULL WIDE OPEN.
These were certainly contributing factors to the real estate bubble mania which ultimately exploded the world financial system contracting GDP to depression levels weather or not GDP gains from 2001 to 2007 were in fact credit fueled by home equity, easy $$ etc. or not.
JR,
We really can't pinpoint any one event….
Speaking of credit, we could time machine back to 1971, 1981…. Or 1913… or 1865….
So no actual explanation for your contridiction?
Happy Thanksgiving!
"In retrospect, there really isn't much of a mystery behind America's "Schrodinger" middle class; there is however a mystery as to who pays to collapse the wave-function of reality, allowing such propaganda puff pieces, which in the vein of Obamacare, seem to rely on one thing and one thing only: the "stupidity" of the American voter."...
Put a brightly lit "neon sign" behind those words!
Lower-wage workers saw bigger pay gains over the past year than the highest earners, reversing the trend from earlier stages of the recovery. While the improvement is nascent and minimal, the plunge in fuel prices is magnifying the effects.
Fatter paychecks bode well for economic growth as families at the lower end of the wage scale are more likely to spend extra cash than their wealthier counterparts, who tend to squirrel some of it away. That means the luxury categories such as private jets that dominated sales last year are giving way to the more mundane, including televisions and restaurant meals.
Who writes this crap? Just more cut and paste propaganda from lazy algo authors. Comparing private jets and TV's are you serious. Yes and those taking in more the $300,000 a year tend to save while those making $40,000 tend to spend it. No kidding, $260,000 more per year would let you do that.
My favorite part of this piece is PRIVATE JETS giving ways to TV'S and RESTAURANT MEALS. WTF so some dude who bought a JET is thinking of buying a TV this year instead?
I know it's blasphemy to say it on this site, but wildcat unions and big government regulation are what changed the lot of the American worker in the '20s and '30s, allowing for a flourishing middle class in the '50s and '60s. We need some more of that again.
Nafta rang the deathnell-bell for the middle-class over 20 years ago. Why did so few people recognize that reality in real time then and some are only now starting to see that as fact? How many people continue to fail to understand the futility of their predicament, or believe that the next election might make a difference? That's what amazes me at this point. I don't think people are stupid, but they sure seem mighty slow.
This is what going with the "lessor" evil gets you over time.
Guillotine any and all, evil immediately, and this wouldn't happen.
An American, not US subject.
Laid off from a good paying 40 hr/week job.
Found 2 low pay, 29 hr/week jobs.
Employment just increased by 100 percent!
What's to complain about?
Prior to the GM bankruptcy a UAW worker had a base wages at plant approximately $31.75 hour with the average benefits at $19.25 an hour. If you include pension costs GM claimed in 2008 a UAW line worker’s cost was $73 an hour. At the same time, non union plants like Toyota in the south averaged full wage and benefits and pension at $47.25 an hour (Toyota was non UAW).
After the GM bankruptcy the UAW agreed to a $14 wage for new workers (it hit $16 in 2010). The UAW did this in 2007, when U.S. car companies were losing money and the union was trying to keep assembly jobs in the U.S. It was a profound shift, since the union had traditionally sacrificed jobs to preserve wages of its members on the factory floor. This has had a major affect on the driving all automobile and manufacturing wages down.
The upper class has all of the money, pays none of the taxes.
The middle class does all of the work, and pays all of the taxes.
The poor are there just to scare the shit out of the middle class!
- George Carlin
xref manhour productivity to viddy the real hororshow screwjob of the last 40 years, brothers...