The Collapse Of The Economic Middle In America
On October 5, 2011, 4:34 PM by Savannah Cox
How thirty years of class warfare have destroyed the middle class and the American economy in the process.
As the United States economy withers away into a ghost town, the truth is that has been eroding for years; it is only now in the darkest of hours that one can hear the violins play while the foundation of the United States – the middle class – crumbles into debt and unemployment. “Public Home Auction” signs are now more prevalent in American neighborhoods than the once familiar white picket fence; the average American’s erstwhile dreams of prosperity have been held hostage for years by social negligence and politically sanctioned acts of corporate predation.
As a consequence, the hopes and future of many Americans are shackled by the ball and chain of seemingly interminable economic woes and unemployment anxieties made that much heavier by the great disparities of wealth that currently suffocate the perishing American middle class. The picture, then, is certainly a grim one: national poverty has hit a nearly 20-year high, unemployment rates remain stagnant around 10 percent, and many now speculate that the generational sobriquet of today’s 20 and 30-somethings will not begin with the words “prophet” or “hero” but rather the word “lost.”
Though for some, particularly the top decile of wealthy Americans, the outlook is not so dour. Reaping the benefits of across the board marginal tax rate deductions doled out by Ronald Reagen while simultaneously capitalizing on the profits from unregulated financialization, the economic elite took home nearly half of the wealth the United States in 2007. Such a disparity hasn’t existed since 1917, and so dramatic that it even eclipsed that of the “roaringly” disproportionate distribution of wealth seen in the precarious peak of the 1928 stock market. The benefits of this system have come in deluges for those chosen few, yet for everyone else have “trickled down” into a seemingly ceaseless drought.
Recently, a few dissenting members of the fiscal elite and political establishment have tried to salvage what’s left of the marrow of the increasingly anemic American economy with their proposal of a modest tax increase on those earning more than $1 million a year. The goal of the Buffett Tax, named for the high-ranking business rogue Warren Buffett, is to ensure that the top 1 percent pay at least the same annual percentage of their earnings as the middle class.
One would assume that after years of economic growth disproportionately enjoyed by the upper class, it would be the lower and middle class who would first cry of injustice of the Buffett Rule’s modest attempts to rectify economic inequality. Rather, it was Senator Paul Ryan, resident sycophant of the wealthy, who made the first of many hyperbolic and rather ironic claims that the proposal of the Buffett Rule was nothing more than Obama initiating class war.
Conversely, middle and lower class Americans have been intimidated into silence by years of economic insecurity and predation. It is the facts accompanied by the stories of those brave enough to share their suffering that must speak for the invasive growth of poverty. And make no mistake, the facts suggest that it is not the elite and unscathed few who should be angered and outspoken, but rather the masses.
In the United States, the current population of those living in poverty is 46.2 million. These individuals earn less than $11,100 per year; or for an average family of four, around $22,000. Keep in mind that these numbers reflect what the U.S. Government Federal Poverty Guidelines deem “not enough” as opposed to what is sufficient. Despite President Bush’s minimum wage increase from $5.15 per hour to a more tolerable $7.25 while in office, this increase did not correspond with the last 20 years of inflation, thus meaning that the real value of minimum wage is only $4.42 per hour, or 26 percent less than it was in 1979.
According to the US Department of Health and Human Services, a full-time minimum wage worker who works five 8-hour shifts every single week of the year earns approximately $13,624. Although these earnings do not take into account additional healthcare or transportation costs, this salary technically enables him or her to scrape past the poverty level. However, if he or she is the only one able to work in a family of three, this person is almost 25 percent under the $18,310 poverty level for a family of the same size.
While Bush does deserve credit for the Economic Policy Institute’s 2009 estimate that a full-time minimum wage worker’s salary would put his or her two person family above the poverty linefor the first time in over a decade, the unfortunate truth is that for larger families, this wage increase would improve nothing. According to the National Low Income Housing Coalition, in order to afford a two-bedroom apartment at 30 percent of an individual’s income (also known as the federal definition of affordable housing), a full-time minimum wage worker in a median state would have to work 87 hours per week, or almost 13 hours a day every single week of the year.
Inevitably due to housing prices, individuals and families are unable to stay afloat and subsequently sink even deeper into poverty, and soon have no place to call home. While the definition of homelessness is a contentious one, in 2007 the National Law Center on Homelessness and Poverty estimated that 3.5 million people are likely to experience homelessness in a given year. To put this number into context, imagine that the entire state of Connecticut does not experience a regular or adequate nighttime residence at some point throughout an entire year. As more stringent ID and address voting registration requirements increase in states like Texas, it is much more difficult for the homeless population to vote. As a result, those who can legally help the most do not hear their voices, and consequently they cannot be answered.
Even more have begun to lose their once-firm footing in the middle class and have now joined those beneath them in the dregs of impoverishment. Sixty percent of households saw their income fall last year along with a 7% inflation-adjusted drop from a 1999 peak in median household income for middle class families. While the alleged “face” of homelessness is difficult enough to accurately define, the growing group of impoverished individuals is even more so. The potent cocktail of global market slow downs and slumps, cheap overseas labor, and a lack of government regulation that allowed rapacious lenders to manipulate high-risk and largely unfit borrowers into subprime and adjustable-rate mortgages, has resulted in a hangover so massive that even those who once considered themselves safe from poverty and economic strife now experience what was once thought confined to the lower class.
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