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The Troubling Decline Of Financial Independence In America
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
If you can't work for yourself and afford health insurance, something is seriously messed up.
By financial independence, I don't mean an inherited trust fund--I mean earning an independent living as a self-employed person. Sure, it's nice if you chose the right parents and inherited a fortune. But even without the inherited fortune, financial independence via self-employment has always been an integral part of the American Dream.
Indeed, it could be argued that financial independence is the American Dream because it gives us the freedom to say Take This Job And Shove It (Johnny Paycheck).
This chart shows the self-employed as a percentage of those with jobs (all nonfarm employees). According to the FRED data base, there are 142 million employed and 9.4 million self-employed. (This does not include the incorporated self-employed, typically physicians, attorneys, engineers, architects etc. who are employees of their own corporations.)
This chart depicts self-employment from 1929 to 2015. Self-employment plummeted after World War II as Big Government and Big Business (Corporate America) expanded and the small family farmer sold to agri-business or went to the city for an easier living as an employee of the government or Big Business.
Self-employment picked up as the bulk of 65 million Baby Boomers entered the work force in the 1970s. Not entirely coincidentally, a 30-year boom began in the 1980s, driven by financialization, technology and the explosion of new households as Baby Boomers got jobs, bought homes, etc. These conditions gave a leg up to self-employment.
Self-employment topped at around 10.5 million in the 1990s, and declined sharply from about 2007 to the present. But the expansion of self-employment from 1970 to 1999 is somewhat deceptive; while self-employment rose 45%, full-time employment almost doubled, from 67 million in 1970 to 121 million in 1999.
Financial independence means making enough income to not just scrape by but carve out a modestly middle-class life. If we set $50,000 as a reasonable minimum for that standard (keeping in mind that households with children recently estimated they needed $200,000 in annual income to get by in San Francisco), we find that according to IRS data, about 7.4 million self-employed people earn $50,000 or more annually.
This works out to a mere 6% of the full-time work force of 121 million, and only 5% of the employed work force of 142 million.
There are a number of reasons for the decline of financial independence/self-employment. I cover the fundamental changes in the economy in my book Get a Job, Build a Real Career and Defy a Bewildering Economy.
But there are other less structural reasons, such as nonsensically complex and costly regulations--a topic explained here recently by entrepreneur Ray Z. in Our Government, Destroyer of Jobs (August 12, 2015).
As many readers pointed out, these complexity barriers limit competition to Corporate America chains and provide make-work for government employees and politically protected guilds.
What's the difference between a Socialist Paradise where 95% of the people work for the state or a quasi-state institution, and a supposedly "free market economy" in which 95% of the people work for the state or a cartel-state institution? Given that the vast majority of employees are trapped in their jobs by the threat of losing their healthcare insurance, how much freedom of movement and non-inherited financial independence is available?
This reality is described in Health Care Slavery and Overwork (via Arshad A.)
True financial independence is probably even scarcer than these bleak numbers suggest. As a self-employed person myself, I have to pay my own healthcare insurance costs --a staggering $15,300 per year for bare-bones coverage for the two of us (no meds, eyewear, dental, $50 co-pay for everything, etc.).
Only 3.9 million taxpayers took the self-employed health insurance deduction. That's a pretty good indicator of how many taxpayers are actually living solely on their income, that is, they don't have a spouse who has family healthcare coverage via a government or corporate job.
That's a mere 2.7% of all 142 million employees. If you can't work for yourself and afford health insurance, something is seriously messed up.
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Ashley Madison CEO Noel Biderman has stepped down
Too late. He better find a good hiding place as I am sure not all of his members were 'law' abiding citizens and one or two maybe more angry enough to put out a contract on him or do the job themselves.
“If you can't work for yourself and afford health insurance, something is seriously messed up.”
That's because the US today resembles Soviet era East Germany more than it resembles the pre-Clinton United States.
>As a self-employed person myself, I have to pay my own healthcare insurance costs --a staggering $15,300 per year for bare-bones coverage for the two of us (no meds, eyewear, dental, $50 co-pay for everything, etc.).< And the idiots running this Shitshow can't understand why the economy just can't pick up and get going. Most people I know are just happy to get by, and are praying nothing bad happens unexpectedly- or they are out of the parade.
Thank you for this comment. We lived in USA for 20 years and we know VERY WELL what you are saying. Mu husband, an IT pro, was laid off for 18 months. We nearly went brankrupt and foreclosed upon. We had no health insurance for a while.
When my hubby did finally land a job (60% of former pay, fewer benefits, no pension), we knew it would not be long before he was given the boot again. So we moved to Singapore. No, Singapore is not perfect to be sure, but there is far more job stability and for those in IT and finance, that makes all the difference as we all know that life ends after 45 in those fields. Singapore also has national health insurance so we have a sense of relief that we NEVER had in USA.
Yet too many keep thinking that life in USA is paradise, when in fact it is anything but that.
Again, thanks for your comment.
Do they have health insurance as part of the "severance package"?!!
I think life insurance would be more important.
"If you can't work for yourself and afford health insurance, something is seriously messed up."
Exactly. The gubmint created these problems by stranging/interfering with the free market system. Get the GUBMINT the hell out of my bedroom, pockets, wallet, insurance, grocery story - out of my life in general. Stick with the U.S. Constitution and its limited gubmint restrictions.
Don't miss this fantastic account what's wrong with western economies (it's in the article above):
http://www.oftwominds.com/blogmay15/self-employed5-15.html
Sorry, I missed it.
Sorry, I posted the wrong link, here is the correct one:
http://www.oftwominds.com/blogaug15/destroy-jobs8-15.html
Here in California you pay $22K/yr for a health plan that pays nothing up to $4K and then it pays 60% of any expenses. No dental, optical, no nothing. You pay for everything yourself.
That is a policy created in an insurers Nirvana, by and for the health insurers- you pay the premiun, you pay most of the expenses. Face it folks, they made it cheaper to just die.
That is a policy mandated by the federal government (Obamacare) created by Dear Leader Obama and 100% democrat votes. Be sure to thank them for it.
Any unconstitutional law is void.
I don't disagree with you. I'm personally not willing to share a jail cell with Big Butch, never bending over, turning my back on him, to protest unconstitutional laws. It is a dilemma.
Obamacare, written in iits entirety by insurance industry lobbyists. Follow the money.
I'd give it a 50-50 partnership - Insurance Lobbyists and gubmint control of healthcare advocates (the socialists/Marxists).
Healthcare is not a problem. They simply leave it out of any discussions on inflation. Then act mystified why people aren't spending their gasoline savings. Duh.
Off topic:
Thousands breach Europe's wall of wire: Young migrant gets her hair tangled while scrambling into Hungary - as police say 700 children crossed border in just one day
Read more: http://www.dailymail.co.uk/news/article-3212601/Agonising-moment-young-migrant-girl-gets-hair-tangled-barbed-wire-scrambling-Hungary-police-say-700-children-crossed-border-one-day-alone.html#ixzz3k7UukIIa
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I wonder when Europe, if ever,will finally tell the U.S to push off.
When spy agency dirt about the chancellor's sex toys no longer matter...
Two question. What does this have to do with the US? How are flooding migrants into Europe a new problem?
Because they're coming from Syria. You know, one of the countries we're in the process of destroying. We exacerbate the problem by meddling in the middle east.
If we break it, we definitely don't buy it. Why would we? It's broken, for God's sake. Who would want to buy something after it's broken?
Exactly. Thats what I said when people were saying that about Iraq.
What that saying implies is an all-or-nothing mentality. It would be better said "if you break it you own it". As in Iraq becomes the 51st state. Or Syria, or whatever you are currently breaking.
And Libya.
It's time for the US and European powers to admit the de-colonisation of Africa was a mistake. If europeans won't govern African states, the africans will migrate to states where europeans govern.
"...they're coming from Syria..."
Yes, they are. Some are normal immigrants. Some are refugees. Some are Muslim radicals creating sleeper cells. Some are soldiers of ISIS. They are all coming. Europe had better learn how to differentiate - and fast.
It is getting to the point where people like me, a Canadian, want nothing to do with NATO, your CIA, homeland 'security', constant war mongering, murdering innocents because of 'suspicion' and hypocrital foreign policy.
We are supposed to be 'allies', but why should I kow tow to something that represents evil in my mind? If I think that way, a father of American citizens, can you imagine how many others in this world think?
The USA forgot humility. They are just a nation of peoples, nothing more, nothing less. The USA is not my overlord.
I agree with much of your sentiment, but with Russia pushing claims to Arctic territory, maybe you shouldn't espouse severing all ties.
Plenty of us in the USA agree with you.
I'm an American and I want nothing to do with the things you mention either. I'm appalled by the so-called leaders of this country and the brain-dead morons who support then actively or through ignorant patriotism.
On a positive note, it appears this behemoth is poised to die by 10,000 self imposed cuts. The down side is how much 'collateral damage" it creates in the process.
So American George, are you of the North, South, Central, or Latin America?
i dont like any of that either. But I do give 40% of my income to support it. Youre welcome
Thank you, Cheshire Baghead.
much much cheaper being Switzerland - from many aspects - there is no reason for Canada to participate in the chaos - Russia has no designs evn in the Artic they have plenty of opportunities without the Canadian cake offshore
you know things are bad when you are trying to sneak INTO HUNGARY
Eastern Europe right now is one of the best places to be. Under the radar of the elitists yet much more civilized than the third world. And the women in Hungary, mmmm.
That is another reason to always carry a pocket knife.
Why do you need a reason?
That mess is unfortunately always on topic.
Baby boomer bankster parasites also entered the market and multiplied.
I have family that works in healthcare. One quote that always sticks in my head is the frustration around breaking a limb. Something we Americans have been doing since the forging of this country. And it costs thousands of dollars now. If we cant figure out how to affordably cast a broken limb then everything after is auto-fubar'd
My girlfriend worked freelance for a few months while we relocated for my new job. We had plenty of money for healthcare yet it still took months to get. She was completely lapsed on healthcare and if she had any serious problem it would have bankrupted us.
If you work and cannot afford food, housing, and other basic necessities, something is very, very wrong. Which there is something very, very wrong with the monkeys running the financial system.
They want you just able to survive and maybe reproduce that is it. No extra, if you have extra you are a threat because you may have time to fight the decline. We are being slowly boiled in a pot like a frog.
You may have learned about the "tragedy of the commons" in school, where everyone vies to claim a share of some public resource (originally common grazing land), causing it's depletion/destruction.
Today's commons is the working person's paycheck.
Reproduce? Check with Billy Gates and the Georgia Guidestones.
supposedly "free market economy" ---telling the truth--- and Obamacare is the threat ---you are in a Fascist pardise folks----kneel or die--
To CherryPicker - I applaud your comment and this coming from an American.
They brought what's to follow upon themselves.
I'm 67 and you're right. It was easy to be self-employed since 1973 until healthcare was taken over by banksters. In the new century (2000+) it became increasingly harder to pay the health premium. Bailed out in 2006. Kids were over 18 and out on their own, and dropped all coverege until 65. Was lucky to be healthy. Old saying: Do not regret getting older; it is a privilege denied to many.
We now live in a society that promotes anti-family policies.
They don't want you breeding.
Population control.
Old saying: Do not regret getting older; it is a privilege denied to many.
My grandma used to say "it's better than the alternative";)
Same age as you, GRD, ans walked away from the corporate world in 1976 to work for an independent sales agency, then started my own in 1980. I went the Sub S route, however, so I am technically not part of those statistics. No matter, it has still gotten progressively worse and more expensive to operate. I provided health insurance, and a very substantial pension & profit sharing plan. In the late 90's, I started to noticed that health insurance was becoming a bigger challenge every year. Our plans renewed in April, and it reached to point where I started dreading the meeting with the insurance agent even more than the tax deadline. Up until that time, we could keep our policy with the same company for years with moderate increases. It morphed into a game of gotcha on rate increases, and if you didn't shop around, you were seriously gouged. The policy choices also became more complicated, especially when weighing the health issues of the various employees. Small companies tend to become a lot like family, and you are aware of everyone's personal circumstances. As the prices crept up, we shifted to HSA's with higher deductibles. Healthcare costs ate into the funds available for pension & profit sharing, and our business was struggling with many changes in the economy and our customer base, too, so around 2007, we closed out the pension plans and gave everyone their money to put in IRA's. After 2008, we downsized to just my partner, myself, and an office manager. We kept healthcare, but had to battle and connive (with the help of a good independent agent) to keep "group Plan" status. Now, the office manager has retired, and both my partner and are past 65, both still working from home offices.
Working for yourself has never been easy, but it used to be much more rewarding and satisfying. Now, it is far more frustrating and downright scary as pockets of profit get gobbled up by large competitors, and the smaller and mid-tier businesses that were our customers have been driven out of business, either gone bust or just quit.
11b40- Thank you for sharing your story. I am in a micro business work from home myself and have only one employee. I had to learn coding and database management to keep it profitable. Also had.to reinvent myself and sectors I served based on bubbles. This is what gets hard as one gets older. I feel blessed I can still make a decent living and retain some of my innovative spirit.
Big government vs.Innovative private sector goes.in cycles. The chart bears this out. Companies are beginning to position for the Save and Invest economy and small business renewal. It will take time for this transitiom. The next several years have a lot of challenges and headwinds.
Damn Martians running this planet!
Securitize health insurance loans - problem solved.
Better to work for oneself, as a true American under "Annuit Coeptis" and Godly Capitalism's "Invisible Hand," and thereby maintain the blessing of good Health from God alone - dismissing the whores of the Rockefeller AMA, who would kill us all if given the chance.
Were that not the case, long ago, as a body of "healers" they would have spoken out about Monsanto, 9/11, Dallas, Memphis, Sandy Hook, Charleston, Boston, and the latest manifestation of satanic false-elite pathocracy, Roanoke's patently obvious hoax.
This self-employed person joined a "legal" sharing ministry. Obamacare is catastrophic insurance at cadillac rates.
Yes indeed, more important for corporations to sell our data and profit and use more scoring algorithms to deny us less access. That's the name of the game with evil algos..
Consumers have become the Dupes of Hazard at the mercy of technology we have no access to..
You have the six degrees of Bob Rubin running HHS and now Obama nominated Andy Slavitt, former Goldman banker and United Healthcare Algo Man to run CMS too...tell your senators to vote NO on his confirmation.
http://ducknetweb.blogspot.com/2015/05/privacy-duping-of-america-intangible.html
Here's an archived post on Burwell's City bud she hired at HHS..
http://ducknetweb.blogspot.com/2014/08/burwell-hhs-secretary-hires-legal.html
A 10 year housing surge is on the horizon, according to NAR. This will be due to millenials and hispanics buying homes.
http://realtormag.realtor.org/daily-news/2015/08/26/10-year-housing-surg...
Realtor mag needs to lay off the lysergic acid diathalamide-25. The millenials are going to buy houses with . . .what? They aren't going to kick over there rice bowl anytime soon. Why the fuck would they buy a house? They already have one.
As far as the hispanics go, at least locally here they tend to rent and the one's who purchase usually house 3 generations under one roof, sometimes four.
As another self-employed individual, I can confirm those numbers.
Take a look at the number of self-employed people working online that have moved out of the US. You may be surprised.
Being self-employed is completely doable, but it's a lot of hard work. Not many people are willing to work 12-18 hours a day, seven days a week, no vacation for several years or more until they're able to secure enough customers/income to remain solvent...especially if you have employees. It helps if your personal overhead costs remain minimal (Ramen noodles? Again?!).
As a manufacturer, I have not only healthcare premiums to consider, but General Liability, Workers Comp, Product Liability, Personal Property and a whole slew of other expenses including engineering and the carrying costs of inventory (including obscolescence).
However, IF you succeed, there is no better feeling than being the "King of Your Domain"...even if your kingdom is small and pissant.
"However, IF you succeed, there is no better feeling than being the "King of Your Domain"...even if your kingdom is small and pissant. "
Obama says you didn't build that.
If you cut up a carrot and a stalk of celery, then you built that Ramen noodle soup, Obie be damned.
Years ago, I used to have a small bulletin board for all the required govt diktats: EEOC, L&I, etc.
Today I have to devote an entire wall to required govt dikats. There are several dozen govt phone numbers and web sites by which employees can air their grievances. The bold red letters, the warnings, the exclamation marks, a casual observer might conclude that my employees and myself are in a state of war, and they would be treated like slaves, by me, if not for their benevolent govt.
Fuck them. If they want their shit on my wall, they should have to pay rent.
"...something is seriously messed up."
Both fascism and socialism hate the self-employed. They want to deal with a mass of workers who have a union boss or other representative who can be bought, co-opted and controlled.
Seconded. It has been said that "corporate america is the tax collector for the welfare state."
What these stats don't show is the blackmarket. Fk the gov't raw!!!!
They might not seem fair to those who play by the rules, but you just read all about how the rules are fkd.
The harder the gov't presses, the more shit squirts out the sides and here I am baby!
So you're saying that you are the shit squirting out the side? Ewwww.
"This does not include the incorporated self employed". The only self-employed people I know who are not incorporated earn their living on the black market.