Americans' Standard of living plummets

I am not sure how the lower middle class can expect to ever regain the value it once had. The need for blue collar workers is really going down with the coming of age of computers and moving jobs overseas. In theory I suppose this is the free market at work with the standard of living beginning to even out globally as more countries begin to receive more investments from US companies. That means money is moving overseas into the pockets of laborers instead of those in the US.

IMO part of this has to do with unions. On an engineering field trip to the Port of Norfolk, I was shocked to learn that the average dockworker makes 6 figures! Those seem like some exorbitant wages and I have also heard it is mostly a family job passed down through generations. Well guess what, as more and more automated ports come online, the port authority is not going to pay those huge salaries and eventually the dockworkers will be out of jobs for the most part.

Why pay more for something that can be done cheaper? That is the real issue here. I suppose tariffs can be considered to make it more uneconomical for companies to shift overseas but that means prices go up due to increased cost of importation and I dont know if companies would even consider moving manufacturing back with the many regulations placed on domestic plants. Its kind of shocking to tell the truth.

Perhaps I should load up on gold and silver, those seem like a solid investment...

Unions have very little to do with it, if anything they merely get a larger piece of the pie then companies would like to pay, but they are a small part of the overall economy.

Do think this is subject is one of the realities of Globlalism, only instead of workers in a few industries being targeted after being isolated, the effect has spread throughout the economy.

Be that as it may, we are in the longest recession in US history, and what is worse, no ideas are coming forward to approach the problem(s),.

How exactly would Keynsian pump priming work when the country is in this much debt? How would "tax cuts stimulate the economy" work when A) so many are now on the public dole, including companies B) taxes are already low and to cut them would require yet more..public debt?

The fact is the cost of living and standard of living is far less overseas. With the advances in technology over the last even 30 years, the free market is not confined to just a country or even a continent. I think there will be a period of time where developing countries will better their standing of living while the US standards may slide. If the scale tips too far in favor of other countries, that will slide back in favor of the US. Eventually, I think the free market will even out on a global scale, but that seems like a long way off with many bumps in that road.

What worries me about this economy is innovation. IMO, innovation is what drove the prosperity of the 20th century. I just dont know if that innovation will necessarily continue on the scale of the previous century.

"pacadermng67 wrote:

The fact is the cost of living and standard of living is far less overseas. With the advances in technology over the last even 30 years, the free market is not confined to just a country or even a continent. I think there will be a period of time where developing countries will better their standing of living while the US standards may slide. If the scale tips too far in favor of other countries, that will slide back in favor of the US. Eventually, I think the free market will even out on a global scale, but that seems like a long way off with many bumps in that road.

And that is the race to the bottom in a nutshell, and Global Corporations reap the benefit.

What worries me about this economy is innovation is IMO, innovation is what drove the prosperity of the 20th century. I just dont know if that innovation will necessarily continue on the scale of the previous century.

Uhm, sure, 50 million Edisons' are tucked all over the country just inventin' away.

"padre31 wrote:

Uhm, sure, 50 million Edisons' are tucked all over the country just inventin' away.

Please enlighten me as to why the 20th century saw such an increase in the Standard of Living...

"pacadermng67 wrote:

Please enlighten me as to why the 20th century saw such an increase in the Standard of Living...

-bimetallic currency standard, your "silver and gold" actually was "money" now "money" is simply paper
-protectionism *gasp*, but it's true, we prospered because we both sold domestically and exported heavily

"pacadermng67 wrote:

Please enlighten me as to why the 20th century saw such an increase in the Standard of Living...

High taxes on the rich, which led to income redistribution, and a generally peaceful environment for labor relations with corporations and the government recognizing unions right to exist and collectively bargain(New Deal legislation). Companies in non-unionized sectors had to compete with unions by offering living wages and benefits. We also were the world's creditor not debitor. Even Republicans like Eisenhower supported this. That all started to change during Nixon's term, who broke up the Bretton Woods arrangement and got us off the gold standard. Jimmy Carter continued with deregulation. Reagan broke the unions, cut taxes on the rich massively, raised taxes on everyone else, ran up the debt to drown the government in order to defund social programs for the poor and middle class, and let corporations write legislation by allowing lobbyists to infiltrate Congress to pursuade the Democrats(especially Boweival Southern conservative Dems) into doing so. Bush sr. made sure the drug war broke up rights movements. Clinton signed welfare reform, NAFTA, the repeal of Glass-Stegal and ignored speculation bubbles in the housing and technology sectors. Bush Jr. tore up whatever was remaining of environmental and labor laws by placing corporate lawyers at government posts assigned to oversee industry, privatized government services, and reversed the surplus into a deficit to continue to defund the government by spending recklessly and by signing two massive tax cuts for the wealthy. Allowed inflation to rise while wages stagnated or declined, due to low paying service jobs replacing blue and white collar work. Let the oil companies create an energy bubble which raised the cost of living and the price of gas, cutting into any disposable income the middle and working classes had to spend to keep the consumer economy going. Bailed out Wall Street without doing anything for Main Street when the speculation bubbles burst. Obama(heavily funded by Wall Street) lets corporations write the stimulus and health care acts, ignoring economists suggestions for improving the economy for the short and long term. No actual jobs bills or New Deal like legislation to help workers during Great Recession. Further tax cuts for the wealthy. More bailouts for corporations but none for Main Street. Democrats, despite holding majority, tear up legislation that could help average workers and families in order to cater to conservative interests. Public gets angry, elect Republicans/Tea Party(funded by wealthy interests like the Koch Brothers) to kick out Democrats. Republicans then work to block any legislation to raise taxes on rich and cut subsidies in order improve deficit problem and block any legislation to help economy unless it caters to the rich and corporations. Waste time attacking the President while doing nothing for workers still suffering from bad economy. All Republican contenders for President all want to help big business and do nothing for workers as well. And it continues on and on.

We have no party that represents working people in this country any longer. That is why our standard of living has plummeted, in a nutshell.

I sort of agree FS, but differ on things like:

-regulations being reduced, that was needed, they did go overly broad
-especially on Civil Rights, the idea of privacy is quite dead

The "surpluses" were directly related to Clinton moving us to a Globalism orientation, that was a short lived time when the US actually exported more, it has been downhill since then.

As they say in my econ class "in the long run, it will all even out (comparative advantage etc, btw, Economics mathamatical practices are to "math" as a witch doctor is to medicine.. i digress)

What is really funny is the champions of "deregulaton" never talk about their failures, such as several energy companies colluding to raise natural gas prices in the yr 2000 or so, it is quite funny to listen to the backpedaling about how that could happen when the market deity was supposedly at work.

Income disparity is a major factor, IMO. The elite "earn" much higher incomes now than before whereas the commoners income has slid down. However you like to label it, there is only so much wealth to go around, or in this case, money. But money is wealth and since it is finite, if we want more, we just print more. But that usually adds to the problem as the $ is devalued, prices rise, the elite gain more of the "new wealth" . Even tho we are off the gold standard, there is still only so much gold. There are way too many variables involved for any one person to get any kind of grip on it. But, I would expect the global economy, which is here to stay, to eventually level out evenly from country to country. I wouldn't be surpised if some day there is only one currency throughout the entire world.

Padre

how much of this do you think is from high energy prices?

"anditsgood wrote:

Padre

how much of this do you think is from high energy prices?

Not as much as it will effect us tbh, up until now retailers have been hesitant to pass along the increased costs to consumers, that is now changing with the CPI rising, and the CPI is a poor measuring stick as it is political skewed to underplay the effect of inflationary pressure on items people use each day along with items that generate wealth.

this is just to 2007 and would be much wider today even. As the gap widens and widens, ie top earners making more, it allows less to be earned by others. As stated earlier, we can only print so much money. So, in the long haul, can capitalism even survive, as we know it. If it fails, then what?

What is clear to me is that the 'job creators' have never had it so good, and it's been several years, and the economy is still swirling the crapper. There is no trickle-down, there never will be.

If you look at the chart you'll see after Reagan's numerous tax reform bills and other "trickle down" measures are passed, the middle and bottom LOST income throughout the 80s. The beginning of the greatest transfer of wealth in history.

"pocoloco wrote:

What is clear to me is that the 'job creators' have never had it so good, and it's been several years, and the economy is still swirling the crapper. There is no trickle-down, there never will be.

Not in a Globalist reality, they more or less run the place.

"FinSane wrote:

If you look at the chart you'll see after Reagan's numerous tax reform bills and other "trickle down" measures are passed, the middle and bottom LOST income throughout the 80s. The beginning of the greatest transfer of wealth in history.

And hence the huge problems of today. The "99%" have less to spend each day.

"DeDolfan wrote:

this is just to 2007 and would be much wider today even. As the gap widens and widens, ie top earners making more, it allows less to be earned by others. As stated earlier, we can only print so much money. So, in the long haul, can capitalism even survive, as we know it. If it fails, then what?

I have no idea how these numbers were arrived at. They seem way out of line, as far as I am concerned. I know that is 1979, I earned a little over $13,000. In 2006, the year I retired, I earned $110,000. This income was certainly not in the top one percent of wage earners, but it exceeded the 281 % increase the top one percentage were said to have increased over this same time period. In fact everyone I know was earning at least two hundred percent more in 2007, compared to what they were earning in 1979.

"padre31 wrote:

http://www.cnbc.com/id/44962589

This is a really bad situation economically speaking, lowering incomes meets rising inflation, so less money that also buys less when you do have any money to spend.

Which is an economics conundrum, in theory inflation means "more money in people's pockets", reality is quite the opposite, less money buying less goods, which is not supposed to happen.

Which does create something of an interesting opportunity, it also means the more things people do for themselves, the more valuable that production becomes.

This to me, is the way forward for Americans, as a slightly embarrassing example:

I'm taking a mathematics of finance class right now, and we've reached the point of the future value of money in terms of single sums and annuities etc, so I thought I'd need a financial calcualtor which costs a little bit.

Happened to be messing around with my ancient PDA's calculator and noticed:

TVM/%

It has a "time value of money" function..that I'd never bothered to learn it had...

Or one could say that the supply of money rises faster than the amount of goods produced

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"jw3102 wrote:

I have no idea how these numbers were arrived at. They seem way out of line, as far as I am concerned. I know that is 1979, I earned a little over $13,000. In 2006, the year I retired, I earned $110,000. This income was certainly not in the top one percent of wage earners, but it exceeded the 281 % increase the top one percentage were said to have increased over this same time period. In fact everyone I know was earning at least two hundred percent more in 2007, compared to what they were earning in 1979.

The numbers are real and verifiable

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"jw3102 wrote:

I have no idea how these numbers were arrived at. They seem way out of line, as far as I am concerned. I know that is 1979, I earned a little over $13,000. In 2006, the year I retired, I earned $110,000. This income was certainly not in the top one percent of wage earners, but it exceeded the 281 % increase the top one percentage were said to have increased over this same time period. In fact everyone I know was earning at least two hundred percent more in 2007, compared to what they were earning in 1979.

i don't know how they arrived at them either but the dollar has inflated around 281% during that time period. Question is tho, did you retire in the exact same job capacity in 2006 that you worked in 1979? The numbers indicate you likely didn't either by various promotions or even changing to a better job. I think perhaps this graph only shows the tendencies in comparing the different income levels and only illustrates the growing disparity.

"maynard wrote:

The numbers are real and verifiable

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Just because the numbers are said to be real and verifiable, doesn't make it true. Heck, according to the government figures, inflation over the last three years has been nearly zero. Of course if you had to purchase gas, food, health insurance, or any other type of insurance, you know that the government is lying about the real inflation rate.

As I stated earlier, everyone I know were making well over 200% more in 2007 then they were making in 1979. I am sure that a small percentage of individuals were earning a smaller percentage over this time period, but I think the vast majority of working Americans were well above the figures shown in this chart.

Perhaps the disconnect comes into play when "everyone I know" is used Jw?

For example if in the medical professions, ones income will have grown exponentially, if in the steel industry, one will have seen ones incomes plummet.

"DeDolfan wrote:

i don't know how they arrived at them either but the dollar has inflated around 281% during that time period. Question is tho, did you retire in the exact same job capacity in 2006 that you worked in 1979? The numbers indicate you likely didn't either by various promotions or even changing to a better job. I think perhaps this graph only shows the tendencies in comparing the different income levels and only illustrates the growing disparity.

Yes, I did work in the same occupation all those years. I started out as a police officer in 1978, earning a little more then $12,000 a year. I did move up in the ranks over the course of my time in the department and when I retired as a Lieutenant in 2006, I was earning a base salary of $110,000 a year. I do know that police officers who started in 1979 and earned $13,000 a year at the time, were making a base salary of nearly $60,000 when I retired. Of course most of these officers made a great deal more because of the large number of overtime hours they worked each year.

I am sure that in many occupations, if you never get promoted and if you work in the same position for over 25 years, your salary increases will be limited to some degree. I just have to wonder why anyone would want to work in a job where your salary remains basically the same, from year to year. In today's job market, I can understand staying in a job where you are at least getting paid something every week. Yet, from 1978 to 2007, there were certainly opportunities for most individuals to find jobs which would have allowed them to make more money in a different occupation or perhaps the same occupation, but with a different company.

I changed careers four times in my twenties, in an attempt to earn more money each time. Once I found a career path which paid a decent wage and allowed for upward mobility, I decided to stick around until retirement. I realize that job opportunities are not as available today as they might have been in the late 1970's, but I still know many young men and women today who are doing quite well in the job market and the vast majority of these individuals are working in the private sector, not in law enforcement.

"padre31 wrote:

Perhaps the disconnect comes into play when "everyone I know" is used Jw?

For example if in the medical professions, ones income will have grown exponentially, if in the steel industry, one will have seen ones incomes plummet.

I live in South Florida, where we really don't have industry type jobs. The closest thing to an industry here is construction. Up until this latest recession, the pay of construction workers in South Florida had certainly risen well over 200% from 1979-2007. My response to the figures posted, were regarding salary increases over those years only. I certainly understand that since 2008 , unemployment has risen and salaries have not increased in most occupations over the last four years.

I think many people are stuck on salaries over the last four years and are not taking into account how much the average salaries did increase over the time period listed in the chart. I will admit that since I live in South Florida and we were not affected by industries closing their doors, as happened in many states, I honestly don't know many people in my personal life who didn't have very generous salary increases from 1979 to 2007. Of course this doesn't mean that a lot of individuals in other areas of the country saw these same type of salary increases. I apologize if my view of the salary structure in the United States appears myopic. I guess that is one of the disadvantages of living in an area which has never relied on industrial jobs to employ a large percentage of the town or cities population.