Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19
Is the Stock Market Making a V-shaped Recovery? - 11th Aug 19
Precious Metals and Stocks VIX Are About To Pull A “Crazy Ivan” - 11th Aug 19
Social Media Civil War - 11th Aug 19
Gold and the Bond Yield Continuum - 11th Aug 19
Traders: Which Markets Should You Trade? - 11th Aug 19
US Corporate Debt Is at Risk of a Flash Crash - 10th Aug 19
EURODOLLAR futures above 2016 highs: FED to cut over 100 bps quickly - 10th Aug 19
Market’s flight-to-safety: Should You Buy Stocks Now? - 10th Aug 19
The Cold, Hard Math Tells Netflix Stock Could Crash 70% - 10th Aug 19
Our Custom Index Charts Suggest Stock Markets Are In For A Wild Ride - 9th Aug 19
Bitcoin Price Triggers Ahead - 9th Aug 19
Walmart Is Coming for Amazon - 9th Aug 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

In Obama's America, the Harder You Work, the Less You Make

Politics / US Politics Aug 06, 2013 - 12:49 PM GMT

By: Money_Morning

Politics

Garrett Baldwin writes: The harder we work, the less we make. That seems to be the mantra of the Obama recovery. That is, if we have a job.

In the last four years, real median household income has fallen during both the recession and the recovery. Amazing. It's like still standing in the muck after the ebb tide.


According to Sentier Research, the June median income in the United States sat at $52,098, or 3.9% lower than in June 2009, the month tagged as the start of the recovery.

The median income of Americans continues to decline (adjusted for inflation), increasing concerns about the long-term health of the middle class and consumer purchasing patterns.

Still, it's not just the last five years that has seen the middle class take a steep dive. The trend, adjusted for inflation, is much worse.

The current income level now represents an 8% drop beneath its post-dot-com peak of $56,648 in February 2002. For the record, the median income represents the very middle of a salary distribution, meaning if 101 individuals were standing in line according to their income, the 51st person would represent the median. This contrasts from the mean, which would represent the average of all income levels.

This precipitous decline is bothersome to economists, as the stagnation of American incomes has prevented the economy from getting its mojo back in recent years. Consumer spending represents approximately 70% of the economy, most of the spending driven by the middle class.

Despite recent commitments to "bolster the middle class" and to focus on "high-paying" jobs across the country, the Obama administration has failed its citizens, and catered heavily to corporate interests and centralized planning that have hammered workers across the country.

No longer can this be defined as a left or right issue, but rather one that is up-or-down.

Will the middle class rise in the America, like it did for six decades before the millennium, or will government incentives continue to provide financial opportunity for the few at the expense of the rest?

Today, we highlight three important causes of this salary stagnation, and, more important, what Americans can do about it.

Technological Innovation and Outsourcing

Technological displacement has played a vital role in the U.S. economy. Financiers' ability to outsource manufacturing jobs has had a significant impact. Also, the ability of companies to utilize new technologies and standard practices has made processes more efficient and cost-effective.

Nonetheless, robotics, advanced analytics, and lean manufacturing have certainly taken their toll on employment and corresponding pay. Today, technology has become so advanced in the manufacturing sector that the related jobs can be divided into two classes with significant gaps in salary: the higher-paying jobs in engineering and analytics that tell technology what to do... and the lower-paying jobs where technology tells the worker what to do.

As technology continues to wedge a stronger divide in the workforce and impacts salaries, Americans are best poised to learn new skills and trades related to these systems and focus intensely on math and science in order to improve their knowledge and corresponding pay.

Government Intervention in the Markets

Median income will continue to fall as government intervention in the marketplace gives companies more incentives to outsource jobs or shift workers from full-time to part-time. The recent implementation of the Affordable Care Act and the lackluster recovery have spawned millions of part-time jobs at the cost of reliable streams of income.

In 2013 alone, part-time jobs have accounted for 97% of all job growth, a significant and troubling tally that exhibits the incentives created by bad government policy.

Given that companies with more than 50 workers who cash a check for 30 hours of work are mandated to have healthcare coverage, more employers have shifted to a part-time model. Nonetheless, many part-time and low-income workers were unable to afford healthcare in the first place.

Now, as workers who are more educated are willing to accept part-time jobs, this will place a strain on lower-class workers and push them into even lower-skilled positions. As a result, the downward spiral of median income will continue unless government is willing to remove the barriers that make long-term underemployment a sound business practice for employers.

A Crisis of Confidence in the Financial Markets

Perhaps one of the most unnoticed causes of the median household income decline centers on American confidence in the markets. Since 2008, market shock has had a dramatic impact on the mindset of the American investor.

Middle-class Americans have drastically lost confidence in the financial markets. Even though the markets are roaring to all-time highs, only 50% of Americans own stocks, either individually or through funds.

The most pronounced decline in stock ownership lies among the middle class. In 2008, two out of every three middle class Americans owned stocks.

That figure sits at 50% today.

In addition, the distribution of market gains over the last four years has been heavily skewed toward the richest Americans. Currently, the top 1% of income earners own 38.2% of all stock, signaling that while median income falls, the gains of the markets lie in those with the money to benefit.

What to Do About It

Although the middle-class's uncertainty about the markets is warranted given its contempt for Wall Street and market manipulation with the Federal Reserve, there are opportunities.

You simply need to know where to look and develop an effective strategy.

That is why our Keith Fitz-Gerald created the 50-40-10 portfolio, an investing strategy that makes it possible to capture global gains and dividends from safe, international companies and protect your assets by using defensive tactics.

The median income trend will continue so long as government continues to create incentives for companies to do more with fewer workers, and as companies continue to chase processes and technologies that enable leaner, lesser-paid workforces.

As these companies do so, their profits will continue to soar, while Americans who don't invest will watch their income share grow smaller.

Here's some more insight on why companies aren't hiring now.

Source :http://moneymorning.com/2013/08/05/in-obamas-america-the-harder-you-work-the-less-you-make/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules