"Poorer Than Your Parents?" New Study Shows 81% Of Americans Worse Off Than In 2005

Tyler Durden's picture

Submitted by Michael Shedlock via MishTalk.com,

The McKinsey study Poorer than Their Parents? offers a new perspective on income inequality over the period 2005-2014.

Based on market income from wages and capital, the study shows 81% of US citizens are worse off now than a decade ago. In France the figure is 63%, Italy 97%, and Sweden 20%.

 

The numbers for the US and France differ radically once transfer mechanisms like food stamps and Obamacare subsidies are taken into consideration.

Extent of Flat or Falling Incomes

Flat or falling incomes

The first set of numbers is easily believable. But the second?

Who believes 98% of the US is better off after transfer payments are taken into consideration?

The study also shows that 90% of French are better off than in 2005 taking into account government giveaways.

I do not believe those numbers. We would not see so mach anger in France, the UK and the US if those numbers were true.

The numbers in Italy, however, are easily believable. The study has some points that I do agree with.

Points of Agreement

  1. The hardest hit are young, less-educated workers, raising the spectre of a generation growing up poorer than their parents.
  2. The economic and social impact is potentially corrosive.
  3. Nearly one-third of those who are not advancing said they think their children will also advance more slowly in the future, and they expressed negative opinions about free trade and immigration.
  4. If the low economic growth of the past decade continues, the proportion of households in income segments with flat or falling incomes could rise as high as 70 to 80 percent over the next decade.
  5. Even if economic growth accelerates, the issue will not go away: the proportion of households affected would decrease, to between about 10 and 20 percent—but that share could double if the growth is accompanied by a rapid uptake of workplace automation.

Points 2, 3, and 5 explain Brexit and the rise of Donald Trump in the US, Marine le Pen in France, and Beppe Grillo in Italy.

As is typically the case, the article failed to discuss why?

The answer is the monetary policies of central banks benefit the wealthy and those with first access to money at the expense of everyone else.

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Jason T's picture

culture.  

so much of both decline and degree of inequality is do to culture.  beliefs and value ..how spend time and money.  ..from destruction of nuclear family to explosion in leisure time, especilly among poor.

you reap what you sow in a free society.

nuubee's picture

Free? I suppose I do still have the freedom to go on the government dole. You might have a point.

Shocker's picture

Things have definitely got worse since 2005, just look around

Layoff List: http://www.dailyjobcuts.com

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BorisTheBlade's picture

They did. And consider that any historical data is a rear view mirror. If one opens one's eyes and survey the road ahead one will likely see that there is none, bottom is in no way near.

VinceFostersGhost's picture

 

 

 

Soooooo 29.5 hr/wk bartending jobs is not the American dream?

JamesBond's picture

Burger King around the corner has a sign up:  Help Wanted  $11.00 per hour.  Should cover uber bill but the young lady sitting beside me can't take the job because it would cut into her Tinder addiction.  The young today.  Go figure.

 

 

PT's picture

Took 11 years to figure out how bad things were in 2005?  In 2005 I was distressed because I knew the world had gone mad but no-one else seemed to notice even though it was so obvious.  All you needed was a pen, a piece of paper and a calculator.  In fact you could just use rough estimates - you didn't even need the calculator.

Crash Overide's picture

Obamanomics brought to you by Carl's Jr, fuck you I'm eating!

 

aurum4040's picture

Do ceo's who make 140 times the amount of their employees reap what they sow or rape what they see? 

de3de8's picture

I don't think a study was necessary to know this.

junction's picture

In 2008, Citadel almost went out of business. If not for the 800 billion dollars the Bush administration immediately poured into Wall Street with the TARP program, Citadel would have gone belly up.  Who knows how much other taxpayer money and loans were really sent to the friends of Bush as the market collapsed.  The loans the Treasury and the Fed took out on behalf of America's 320 million people were never really paid off, just transferred to derivatives and, a much smaller portion, to the National Debt.  So now Kenneth Griffin of Citadel can go on a buying spree in Manhattan, spending over $100 million for a newly built apartment on Central Park West or South, knowing that the American taxpayers are the ones who really are footing the bill, thanks to his Bush and Obama crony capitalists. 

Wikipedia: During the 2008 financial crisis, the firm's Kensington and Wellington Funds lost 55 percent of their value by the end of the year. Griffin said, "we were losing hundreds of millions of dollars a week, if not more. CNBC parked a van in front of Citadel, waiting to break the story of our demise."

centerline's picture

As if the ponzi is going to just going forever?

How about figuring out roughly how many jobs were created (directly and indirectly) as a result of the financial frauds perpetrated on the world over the last few decades?

Reversion to the mean is going to be a bitch.

Son of Loki's picture

NY Obamacare users facing double-digit premium hikes in 2017

http://www.msn.com/en-us/money/healthcare/ny-obamacare-users-facing-doub...

One moar reason the peeples be broke.

cheech_wizard's picture

I actually took the time to read that...

The new premium hikes ranged from as little as 8 percent for Aetna Life individual users, to a whopping 80 percent increase for the unlucky policyholders of Crystal Run Health Insurance Company, an insurer that covers parts of the Hudson Valley and Catskills.

"While premiums are increasing nationally, New York's rates are comparable or lower than rates requested and approved in other states," DFS Superintendent Maria Vullo said in a statement.

"More than 50 percent of consumers buying plans through the NY State of Health will receive a tax credit offsetting the increases in premiums, and for some the credit will result in lower actual premiums," Vullo said.

"DFS will continue to protect consumers and ensure access to healthcare, while maintaining a vibrant and competitive New York insurance market," she added.

Standard Disclaimer: In other terms, you're fucked, and I'm lying. When in doubt, always hire a woman to lie and eventually take the fall. The fairer sex will never be prosecuted despite everything they've done. Maria Vullo should hire some people that are experts at deleting e-mails and destroying hard drives. She's going to need them soon enough.

 

SweetDougisaTwat's picture

I have thought for years about the wholesale improvement to our society of repealing womens' suffrage, and forcing all of the fairer sex back into the home--out of politics, at least.

And, for all of my non-fans today--you have to pass it first to find out what's in it.  Gee, thanks mom!

Angry White Guy's picture

I'm sure I'll get down voted to infinity, but I as well have thought about this rather 'inconvienent' truth.

CheapBastard's picture

Somehow, the MSM will spin this and blame Obama's failed policies and increased poverty on whitey, same as BLM has repeatedly done the past few months.

de3de8's picture

Yep,soon Trump will take over for Bush as the boogeyman

SomethingSomethingDarkSide's picture

I heard The Catholic Church has TONS of property that is just begging for confiscation! 

buzzsaw99's picture

many of the boomers are worse off because they blew all their money on stupid shit. fuck 'em.

ZeroPoint's picture

Boomers were sold a lie that they would all be high level executives and able to check out at 55, siping Mai Tais on Wai Ki Ki beach. Some of them tried very hard to get there by killing each other (and their children now).

 

 

Swamidon's picture

Always interesting to see nitwit Millennials talk about what they don't know.   If you're so smart (LOL) then figure out why most of you are such huge Losers.   Or ask a Boomer, we know.

SweetDougisaTwat's picture

Third generation syndrome, huh?  The grandchildren of the Successful are always incompetent fuck-ups.

hendrik1730's picture

I agree. The average millenial or whatever they are called nowadays is not able to repair his bike tire. Replace a burnt out lamp. Fix some simple plumbing or electrical problem. Repair any stuff using their o so tender hands. But, they ALL have traveled the world at age 30, went scuba diving in Ceylon, know all the bars in Berlin, kept studying some weird stuff we never heard about till age 37 and at age 40 still have to start working and are flat broke because of loans for whatever funstuff. But WE are the wrongdoers, we are the profiteering oldies, us who finished our studies at age 20-25 ( depending on university studies or not ), worked from 20-25 till 60, looked after our own children, started to finally do some traveling at age 45 ( house mortgage paid off ), paid for THEIR extended studies and now we in the end want to claim the few remaining golden years for ourselves. How selfish can someone get hey ......

canisdirus's picture

After all, there are millennials that are over 34 years old.

Amy G. Dala's picture

I think boomers are on the whole doing quite well.  They invented (and sold)  $500 telephones, $50K station wagons,  $500K houses.  They are enjoying fixed benefit retirement plans, full social security benefits and cheap taxpayer subsidized health care.

It is mathematical reality that the boomers will reap multiples of what they put in.

Particularly in the public realm.  Boomers invented the "double-dip" (working same job they retired from, collecting paycheck and benefits simultaneaously) and "pension spiking" (cramming overtime and vacation time into final year of employment . . .usually make more money in retirement than working).

Guess who pays for this life of leisure?  Cry not for the boomer.

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) Aug 8, 2016 10:07 AM

Worst off than their parents?  Why not just marry their neighbors?  R Kelly is 49 and about to get married to a 19 year old, in his defense at least this one is legal...

hooligan2009's picture

as usual with McKinsey reports, the analysis is contrived and manipulated. Another triumph of inaccuracy of non-contiguous data.

See the footnote of the chart:

Data for each country are the latest available: Sweden, 2013; Netherlands, 2014; United Kingdom, 2013/14; France, 2012; United States, 2013; Italy, 2014; disposable incomes, 2012 market incomes. Population-weighted average of 25 advanced economies.

The study refers to data that is at least 20 months out of date - the US data is compiled using 2012 market incomes (four years out of date if a mid-year point is used) against 2013 for the other data - I suggest this is not the latest data available and could easily be corrected even just using Wikipedia's extracts of the national accounts for each country.

No doubt the message is the same but as with all research of this type, it does not reflect the degree of the message or reach an informed conclusion of presenting an alternative - e.g. what if thw Fed Funds rate was 3% (consistent wiht inflaitonof 2%) or the equity markets had not been "goosed" by ZIRP< NIRP and QE.

Typical of McKinsey - as deep as a puddle whilst charging two arm and a leg for poor quality drivel from recent post graduate students with no "bottom" (real world, relevant, experience).

jamesmmu's picture

Something puzzling me. One of the major reason the rally is so powerful is that 2Q consumer spending up 4.2%, but consumer credit is weaker. How can this happen? Somehow ppl start using cash to purchase?

Duc888's picture

 

 

 

Hillary will raise taxes, so everyone will be rich.

Heavenlysunshine's picture

The old cowpoke says: "I spent most of my money on cigarettes, whisky and wild, wild women.

The rest I just wasted!"

Swamidon's picture

Telling people what they already know and using questionable analysis to do it.  I'm guessing the important thing is publish or perish?

NEOSERF's picture

Every day 10,000 boomers go on the dole that is chronically underfunded.  Every year 28,000 more kids get hooked on heroin.  Every year pensions fall further behind on promises to pensions, every year debt funding eats up a greater % of ever local, city, state and federal tax bill.  Only the middle class will be called upon to cover the gaps so there is almost no way life will be better in that sphere until there is a reset.

rejected's picture

"The hardest hit are young, less-educated workers, raising the spectre of a generation growing up poorer than their parents."

Hell, They're the only ones that can find work! This education BS is far more overrated then it should be.  What good is a design engineer , electrical engineer, aeronautics engineer, IT or Computer Science degree if there is very little production in the u.s or the low wage engineers are imported with the rest of the garbage? Heck, very few have the savvy to even consider an engineering degree due to the PC oriented safe space dilapidated lower grade government school systems. Even the Universities themselves are PC, safe space riddled money pits whose entire premise is to get as much of that 'free' government money as possible!

They have wasted their time and our money going for the gold only to end up working MacD's or, if they do find a engineering job, it's salary is about the same. I know a bartender that makes more money than a friends kid who is working as a engineer at a shipyard.

Stop with the education bullshit. It's been inflated away like our money and almost as worthless. When everyone has a degree it becomes worthless, like the HS Diploma has and the the Grade School Diploma behind it. 

Oh, by the way, Mike... Spectre was a James Bond Movie. From an uneducated layperson.

 

nufio's picture

the percentage of IT employees who refused to upgrade their skills from COBOL keep commenting that studying engineering is a waste of time. This is just bullshit.

https://nces.ed.gov/programs/digest/d15/tables/dt15_322.10.asp

lumping all graduates together into one category is asinine as the number of useless majors for the benefit math deficient high school graduates has exploded since data was being collected.

The point I am trying to make is summarized for those who are unable to read tables. I downloaded the excel on the link and sorted based on what fields have been growing in the time frame.

From 1970 to 2014

Total Bachelors degrees granted  grew from 839K to 1869K  

So I took that table and sorted based on the highest growth 

Ranked by highest growth:

Business grew by 242K  (Obviously satisfying a societal need of business graduates to shuffle papers, funny thing is in most tech firms, magament below VPs are not business majors)

Health professiosn grew by 173K   ( I am not sure what is lumped under health profession. is this eveything that can be considered premed. We certainly arent graduating 173K doctors every year)

Psycology grew by 79K  (because society needs 120K new psychologists every year)

Communication and journalism grew by 77k

Biological and biomedical sciences grew by 68K ( oh now, whats in health professions is even more suspect)

visual and performing arts grew by 66k  to 97K graduates every year (WTF!)

Finally Computer and information sciences grew from 2K in 1970 to 52K in 2014.  Every year the 65K H1b cap is oversubscribed by 4 times. Which means companies apply for 200K visas for foreigners while US graduates only 50K CS graduates every year, one of the fields with the highest growth, because everyone wants to be a psycologist or salesman or fucking perfmormance artist.

Almost at the bottom is MAth and statistics which actually shrunk from 1970 from 24K to 20K, Ha ha. almost a rouding error.

Engineering techologies (which i am guessing includes all fields of engineering) gtew from 5K to 16K  LOL

We graduate 120K new psychologists and 100K new performing artists and 170k graduates in social sciences and history every year.

Basically if you did one of these shitty hobby reading worthy degrees, you have no excuse to complain. which is the majority of the population. I guess poor parenting and enabling universities to growing these departments to ridiculous degrees have a good share of the blame.

 

 

 

 

PT's picture

Engineering wanna-bes are good at math.  They don't take on debt without a very good reason.