5 Trends That Are Destroying The Middle Class In America

Tyler Durden's picture

Authored by Michael Snyder via The American Dream blog,

The middle class in America has been shrinking for decades, and our leaders seem powerless to do anything about it. Two years ago, the middle class became a minority in this country for the first time ever. In other words, the middle class now accounts for less than 50 percent of the population. But back in the early 1970s, the middle class made up more than 60 percent of the population. I have often compared being in the middle class to playing a really bizarre game of musical chairs. When the music stops playing each month, more chairs are being pulled out of the middle class, and most of us are just hoping that we will still have a chair for the next go around.

Earlier today, I came across a USA Today article that discussed some of the factors that are slowly but surely eviscerating the middle class. I am going to share four of those factors with you, and at the end I am going to add one extra one.

First of all, the article pointed to a decline in manufacturing and the rise of “service jobs” as one of the key trends that is changing the nature of work in America…

‘Once dominant industries, like manufacturing — which paid well even without a college degree — have been overtaken by service sector jobs, most of which are low-paying, according to the Bureau of Labor Statistics.’

In the old days, even if you didn’t have any higher education you could support a middle class family by working in manufacturing. We were the greatest manufacturing society that the world had ever seen, and Detroit had the highest per capita income in the entire country. But after decades of sending manufacturing jobs overseas, manufacturing’s share of the U.S. economy is at an all-time low and formerly great manufacturing cities such as Detroit have become rotting, decaying hellholes.

Secondly, the USA Today article pointed to the rising cost of a college education

‘The cost of getting a college degree is up more than 1,000% since 1978, according to Bloomberg.’

This is a particular pet peeve of mine, because I am still paying off my old law school loans. We encourage our students to get as much education as possible and to not worry about all the debt, but then millions of them find themselves financially crippled and without good jobs once they graduate. This makes it extremely difficult for a lot of our young people to enter the middle class.

Thirdly, the USA Today article brought up stagnant wages and the rising cost of living

‘Decades of stagnant wages mean both parents must often work to make ends meet, creating a need for child care and elder care that didn’t exist in 1950, for example, when two-thirds of women were full-time “homemakers” aka caregivers, according to the Bureau of Labor Statistics.’

Once upon a time, a single income could easily provide for a large middle class family in America. But today so many families have both parents working, and yet many of them still find it very difficult to pay the bills each month. In fact, surveys have found that somewhere around two-thirds of the entire country is living paycheck to paycheck.

Fourthly, the USA Today article mentioned “the gig economy” as a major issue

‘The gig economy (Uber, Airbnb) has exploded, giving workers more control and flexibility, but fewer benefits or legal protections.’

Independent work and contract work have become major societal trends, and this isn’t going away any time soon. These types of jobs do not typically come with health insurance, retirement benefits, etc. and so this is something that our nation is going to have to wrestle with.

Fifthly, I would like to throw in the decline of small business and entrepreneurship in America. Working for yourself or starting a business have always been ways to lift yourself up into the middle class in this country, but today it is harder than ever to become independent. The government is absolutely killing small businesses and entrepreneurs with rules, regulations, red tape and high taxes, and little relief appears to be coming our way any time soon.

At this point, the percentage of Americans that are self-employed is hovering near the all-time record low, and if we hope to have a thriving middle class ever again we need to get this fixed.

We also need to train our young people for the jobs of the 21st century. At one time we had one of the best education systems on the entire planet, but today our system of public education has become a global joke.

And I am not exaggerating one bit when I say that.

To give you an idea of how badly the quality of our workforce has declined, I want to share with you something that the owner of a small manufacturing company posted in an Internet discussion forum

I own a small manufacturing company. Most of the assembly work is done at a bench, with hand tools. The work is not difficult, but quality and consistency is paramount.

 

We are entering into our busiest time of year, and steady growth combined with losing one of our senior bench techs has caused me to run some ads (after spreading the word around to friends and associates).

 

I have been involved in the manufacturing business for about 30 years, and have seen thousands of resumes.

 

The last couple weeks I have been reviewing a couple dozen resumes a day. What I am seeing now, is stunning and disappointing. When did people stop learning how to compose a sentence? When did they decide that a resume composed of two sentences is somehow complete? The poor level of spelling, grammar, and frankly effort has me perplexed and perpetually face-palming.

 

So far, I have two resumes that were not immediately round-filed. Just two.

 

If this is the current state of our potential work force, we are in trouble.

That really resonated with me, because I have heard pretty much the same thing from so many business owners over the years.

Decades of following the “progressive agenda”, and I am talking about both Democrats and Republicans, has been absolutely disastrous for our society.

We desperately need a complete and total cultural revolution, and that means returning to the values and the principles that this nation was founded upon.

If we continue on the same path that we are currently on, the middle class will continue to deteriorate, and our nation as a whole will continue to decline.

We can do better, and we must do better.

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hongdo's picture

The state I live in split one professional license into 5 seperate licenses and one business license into 4 seperate licenses each with increased fees.  Eight licenses now needed where two were required a few years ago.  No loopholes - pay the license fees or quit.

You don't include county and local business property taxes and gross receipts tax you pay whether you make any money or not. No loopholes.

I get stupid form serveys from the state and feds requiring listing of all employees and hours and earnings.  All say complete and return or go to jail.  Takes time. No loopholes, they will keep calling.

As long as I have been involved, the Fed income taxes have not been drastically changed, but employer paid FICA and required workmans comp insurance have increased a lot.  I have 3 filing cabinets of paperwork I am required to keep for no other reason than taxes.  And I have to pay an accountant for no other reason than weekly and monthly state and federal tax filing that I used to do myself until it got too time consuming.

BTW, I am not going to quantify these for you as that would be as big a pain in the ass as what I get from the gov.  Figure the total tax rate for each additional dollar earned is about 60%. You learn to save and file every fucking receipt.

Start your own business if it is such an easy ripoff.

BTW, I don't disagree with you on the big corporations, you got to be big to play in crony capitalism.

 

 

 

Juggernaut x2's picture

That is such BS- CNBC(for once) had a good piece on the fact that the average individual pays DOUBLE in individual income taxes on an inflation-adjusted basis as that individual did in 1963.

Benito_Camela's picture

Link? Furthermore, corporations have way more loopholes now and  most Fortune 500 firms don't even pay any taxes when all is said and done. 

 

But I'm all ears (or eyes). If you can find a link I'll consider the data that conflicts with what I've read and observed. 

 

P.S. I never said ANYTHING about the "average" individual, did I? I was talking about the very rich and corporations. 

Endgame Napoleon's picture

You must not realize how much welfare is issued to prop up single moms in independent households so that they have no social pressure to marry their children's fathers. Accountability, ha, what it does is to provide employers with a workforce that is incentivized to accept low wages, thereby lowering wages for people who can't reproduce their way into free groceries, free or reduced-cost housing, monthly cash assistance, free daycare, free energy and a Child Tax Credit amount that, at the $6,269 max, takes a childless worker 4 months of full-time work to earn. Hard work does not pay anymore. These moms do not work hard. Consult the "Earned Income" screens at the Department of Human Services for proof. They are required to work 20 hours per week. Or better yet, go to a call center or a financial services back office, seeing how many cubicles are empty due to momma-clique members who leave work early every day and for whole mornings and weeks, too, citing kids. CA traced $96 million of its EBT money to casinos and out-of-town hotels. Other states have traced it to tattoo parlors. Copulation and reproduction pays more than work.

https://www.google.com/amp/losangeles.cbslocal.com/2013/11/19/cbs2-inves...

https://www.google.com/amp/s/amp.cnn.com/cnn/2015/04/07/politics/kansas-...

https://www.google.com/amp/s/amp.bangordailynews.com/2016/03/10/politics...

VK's picture

That's what the oligarchs want. A three tier system with the upper class, a tiny bourgeoise that serves them and a vast proletariat underclass that's basically slave labour. Then they can live out their pharaonic fantasies of being Demi-gods. The western elite are choosing to destroy their own societies. They have no loyalty based on religion, race or culture, what counts is the power, their main addiction.

Juggernaut x2's picture

The US jewish population,  with only 2% of the population,  controls approximately 50% of US wealth- so is the "they" you are referring to?

LittleGreenMan's picture

Power, Money, and Pizza.

Endgame Napoleon's picture

That is what it looks like. I am still hoping that Trump is BatMan, a true exception. BatMan saving Gotham.

moonmac's picture

With such low pay and a very high cost of living today's manufacturers get lucky if their job candidates can read and write in Spanish.

GoldRulesPaperDrools's picture

I would claim that the quality (and quantity) of the applicants you get is a function of what the position is paying.  If you don't pay very much (or think you shouldn't have to pay much), don't be surprised when you get very few and very poor applicants.  If you want to pick from the best people, you have to pay the best money (or at least better money than your competitors or other companies looking for the same quality applicant).  Some of these businesses seem to forget that labor is a resource just like anything else; the more better labor you want, the more you have to pay for it.  You can't expect to get the same quality of people today at compensation that's been stagnant for the last decade.

Endgame Napoleon's picture

Immigrants get the copulation/reproduction-based welfare/taxfare as well, and they split expenses, living in multi-family dwellings. Sometimes, two or more mommas live in those houses, bringing in $450 or more apiece in monthly EBT alone. Illegal immigrants got $4.2 billion in those $3,337--$6,269 Child Tax Credits in one year. I think of the years my ex and I struggled to come up with money to pay a business loan, two rents, operating expenses and quarterly taxes every few months, stressing out about it. Would a customer walk through the door with a bulk order to save us just in time to pay Uncle Sam thousands in taxes, when we're making a pittance in net income, although generating close to six figures in sales? You just get to keep a third. All these citizen single moms and immigrants, both legal and illegal, have to do is work a low-wage job, have sexual intercourse in or outside of marriage, and Uncle Sam gives them everything from free housing to $6,269 checks at tax time. What chumps we were.

zipit's picture

Some folks got Ubered.

farflungstar's picture

"In other words, the middle class now accounts for less than 50 percent of the population"

 

         How can that not have been the plan?

Benito_Camela's picture

There really do need to be some changes to the tax code where small businesses are concerned. Thing is, neither side seems to be willing to do it. Bush made a few minor changes, but they weren't very effective. There has to be a way to differentiate small business owners from the super wealthy in terms of filing protocols, period. That said, I work for a small business, always have save for a few short stints with big-time corporate America. I've seen the financials and there is greed in small business - one owner (my direct manager as I was 2nd in command, working for a simple salary) wrote himself a $1M check at the end of 2006, that in addition to his salary (which was north of six-figures) rather than re-investing it in the business or giving raises. I eventually relocated, but since then a significant portion of that firm's revenue has dried up and they were unable to retain employees; they downsized their office space and now primarily do work for clients with Mexico manufacturing operations. 

shovelhead's picture

The owner took his profits instead of giving them away?

Why, that dirty bastard...

There oughta be a law.

Benito_Camela's picture

That's not what I wrote you stupid, insipid fuck. I said he refused to RE-INVEST IN THE COMPANY OR HIS EMPLOYEES.

Let me know if you have any trouble understanding those very simple business concepts. I know jar-heads sucking a military pension like you have never had a real job in the real world, but you still have time. 

hongdo's picture

Start you own company and invest in your employees.

Benito_Camela's picture

Wouldn't start a company in this environment. Which was kind of the point in the article. Reading comprehension is your friend.

Mind your own fucking business. I'll call what I've experienced like I've seen it. 

Dammit Walter's picture

99% of the laws should be removed.  Use a chainsaw, not a scalpel.

The problem is big crony businesses vs small business.   The crony-capitalists can afford to buy legislators to enact laws to snuff out their competition, and to give bribes (cough) sorry campaign contributions to politicians.

Affordable Care Act (Obamacare) is a perfect example of how horrible government treats small businesses!  Funny how oxymoronic the govt names are allocated like "Afforable" Care, and Military "Intelligence", and Department of "Justice", but I digress.

If you can't pay, you can't play.  That, my friend(s), is the real problem.  Not re-investment.  A smart business man will always re-invest to the approriate level -- or go out of business.  

Have a great day folks!

Benito_Camela's picture

true, and he did end up losing a signficant portion of his business. that said, he probably hasn't taken a cut to his personal compensation and likely downsized because he realized his own limitations and future inability to invest back into the business and pay employees accordingly. his business, his choice. but coulda employed many more people. 

also, a good portion of the business that year was MIC-related, so 80% of his "bonus" was paid for by the taxpayer. 

GunnerySgtHartman's picture

I said he refused to RE-INVEST IN THE COMPANY OR HIS EMPLOYEES.

And as the business owner, is that not his prerogative?  Where is it written that he must "reinvest" that money into the company or his employees?

Endgame Napoleon's picture

It is not. But there are incentives to do those things. That is not right.

Endgame Napoleon's picture

And you pointed out that they moved business operations to a foreign country. That should not be rewarded, but often is.

Endgame Napoleon's picture

I have worked for two Jewish-owned or partly Jewish-owned businesses. One paid $2/hr more than most businesses around here and had above average retention in a state with very brutal employee turnover rates, albeit they had a couple of *amazing* staff members---amazing in a bad way. One of those was very Christain. One was Jewish. The other business was one of the most unique in that field in the whole country, a true gem, according to people in very high positions in the field. They did not pay as much to some, but to people who worked there for many years, they also paid way more than average for the field and were decent human beings in general. I left voluntarily to do something else, but will always be glad I worked there. I just do not believe that Jews are any different than other groups in terms of the cutthroat nature of today's work world. There are excellent, better-than-average, average and awful ones. I live in an area of the country with mostly Christians, and though I am interested in preserving Western culture, like the rest of you, I can assure you that many Christains, very much including Christains with a bunch of cutesy family pictures on their desks, are often super-cutthroat. Many of them will do ANYTHING in a $10/hr job.

In.Sip.ient's picture

Now why would they make it easier for small business???

 

Are you NUTZ???

The entire point of making it difficult for small business is

to prevent them from competing with the PTBs favorites...

 

Got it?!?

 

Sheesh...

 

Benito_Camela's picture

Yup. I get it. The owners don't want any competition. 

innertrader's picture

IF YOU TRULY want to CHANGE things in this country, READ THE FAIRTAX!  The FAIRTAX would be so BULLISH AMERICA that it would blow everyone, including me, AWAY!  Consider this a challenge!  Everyone, that's not on the government tit, needs to read the FAIRTAX!!!  DO NOT read some socialist interpretation of it, read the actual law!  It's before Congress and it needs our support!!!!!

 

VINCE FOSTER!

SETH RICH!!

TRIUMPH with TRUMP!!!

Delving Eye's picture

"Most of the assembly work is done at a bench, with hand tools. The work is not difficult, but quality and consistency is paramount."

Since when is knowing how to spell or write a complete sentence a requirement for assembly work??

btw, the father and son who landscape my property are Hispanic -- the father can barely speak English -- but he makes a very good living because he charges a fair price and the lawns he takes care of have never looked better.

Angry White Guy's picture

You're part of the problem.  Anything wrong with hiring an english speaker?

bookofenoch's picture

Can't find em! Americans don't want the work!!!

not dead yet's picture

Plenty of white guys doing the work if you only looked. White guys are usually small business that has to charge more because they aren't working under the table for dirt cheap. Most of the Mexican lawn work I've seen is pure crap. Especially their own lawns. Like the Mexican neighbors on each side of me.

Delving Eye's picture

I hired my non-English-speaking fellow purely as a matter of convenience. He was there.

After my husband died, my son and I mowed our lawn until recently when our ride-on John Deere had a fuel leak and a dead battery. A couple hundred to be towed and fixed. Plus, my son works fulltime and is in school fulltime. I'm pretty handy for 64, but mowing over our hilly terrain gives me lots of anxiety.

So I asked Sal and his son Brian to mow after they finished my neighbor's. They were done in 10 minutes, nothing fancy (no weed-whacking, etc.), for $40. Saved me agita and a couple of hours' work. And he's on call -- no contract, like most "white guys" demand.

So, yeah, I guess I'm "part of the problem" as Angry White Guy (no kidding!) above so glibly described it. Too bad. Well worth it.

Angry White Guy's picture

That's complete horseshit.  Open your eyes.

Genby's picture

USSR is gone. The Western Capitalism doesn't need "middle class" (as a propaganda tool) anymore.

Now, back to classic rich/poor - bourgeoisie/proletariat division described by Marx and Lenin.

Genby's picture

The so-called "middle class" was artificially created in the U.S. in 1950-60s as a propaganda tool in the Global Class War.

Endgame Napoleon's picture

No it wasn't. We had a lot of ramped-up industrial capacity after mobilizing for WWII. Instead of staying in the workforce to dilute the wage pool, the Rosie the Riveters went home to raise their children. They were not bored with their children. That meant more job availability at higher wage levels for breadwinners, whether the breadwinners were single men and women without children or men who supported whole families in middle-class style on one income. Fake feminism is a middle-class killer.

shovelhead's picture

Wait...What?

There's a plan?

whatswhat1@yahoo.com's picture

Indeed, over time, humans invariably elect those that are most reviled, least deserving, and we get our just deserts.

Kefeer's picture

The devil knows this all to well.  Arrow up!

Angry White Guy's picture

The Fed is responsible for most of this.

Herdee's picture

$6 Trillion on useless middleeast wars that went nowhere. 

shovelhead's picture

How can you say the haven't gone anywhere when they ain't done yet?

Benito_Camela's picture

$6Tn seems like a low ball number. 

venturen's picture

that is modest money compared to what Obama gave to the richest. Obama was the death knell...he truly has contemp for 90% of the country and should be jailed

rejected's picture

"and our leaders seem powerless to do anything about it"

Electing and calling these parasites leaders is your first problem Mike.

" What I am seeing now, is stunning and disappointing. When did people stop learning how to compose a sentence?"

I met many a tradesman that weren't language majors but were top grade machinists, pipefitters, electricians etc. In my time any menial job working with some hand tools never required a Resume. In fact, they would laugh if you sent them one. In my day managers wanted to look you over, talk to you, see if you were knowledgeable in your trade whereas today they seem to look for proper sentence structure, all 'T's' crossed and 'I's' dotted and a well laid out resume with pretty pictures.

If you want to blame someone for a poor education then I would recommend starting with the school systems everyone thinks so much of. I'll bet he pays school taxes. If your business only produced 16% of usable product how long would you be in business? Well, that is the educated product the school systems today produce. And no one holds them responsible while they indoctrinate a child to different lifestyles but that same child cannot do basic math.

GoldRulesPaperDrools's picture

The problem with the school system is that, by law, they have to warehouse, using taxpayers' dollars, all the biological waste product that either can't be educated or don't want to be educated.  Let the schools shed themselves of the junk and they'll do better.  Expecting the schools to wave a magic wand and turn disinterestesd or incompetent students into AP-prep candidates is totally unrealistic.  That's not to say that the schools can't be more efficient and stop spending time and money on stupid stuff.

There was recently an article posted about six schools in metro Baltimore where NOT ONE STUDENT PASSED THE STATE'S MANDATED PROFICIENCY TESTS.  NOT ONE.  You can't tell me that the outcome is entirely the school system's fault.  When not one student can pass those exams there are other issues which aren't politically acceptable to address.

Lost in translation's picture

I suspect that state-mandated testing of human flotsam that has zero interest in learning was calculated for effect. To wit, that teachers would become overloaded, overburdened, and stress out/burn out attempting to pass the unpassable, as the system itself cartwheels into failure.

The raison d'être thus being provided ("poor test scores are the fault of poor teachers") for the State to eliminate all teachers and staff, and ending local control via school boards. What follows we can only speculate upon, but my best guess would be imported foreigners to work as poorly-paid/tightly-controlled State agents teaching an Orwellian, One World indoctrination curricula.

Like I said, just a guess...

I am Jobe's picture

We got NETFLIX. Ha all we need

not dead yet's picture

I've known plenty of people who do not do well writing or composing stuff but are fantastic workers who show up every day and give their best. What that employer forgets he's looking for a worker not someone to write his biography.

Kids don't have skills because they are given none. When the subject of the decline of technical high schools comes up invariably the "intelligent" educators call them "schools for dummies." Same goes for apprentiships. The system has been taken over by those who claim only a liberal arts education is a real one and without one cannot reason or think. When the STEM thing hit the media a few years ago the educators used that as an excuse to lengthen the school day and year where they added music and other liberal arts classes. When the liberal arts people took over they arrogantly and ignorantly said the US would be the brains and the rest of the world would do the work and arranged their agenda accordingly as if Americans are the only intelligent life on the planet. Thus a crappy education where no one graduates high school after 15 years of classroom, they want kids to start as young as 3, with any skills for getting a job. College costs are so high becasue their propaganda campaign about going to college or be a loser, Obama was great at plugging everyone should go to college, so it is a sellers market and no matter how high they crank the fees the suckers take the bait. The latest research says 67% of the recent high school grads are going to college. In other words half those people are suckers who should not be there and will never get a job that requires a degree. If colleges got back to only admitting quality students, not the current if you're still breathing you qualify, their would not be high fees or a student loan crisis.

Lots of ignorant people defending the system claim  it's the best in the world because so many foreigners go to school here. Lots of those foreigners are here on athletic scholarships, gotta have the best jocks, or they come here for the world renowned college parties and the ease of getting laid. Especially the rich kids who buy their way and get to stay even when their grades suck because they aren't the brightest or their main goal is the parties and sex which are unavailable or taboo in their home countries.