A Shift In The Economy

Many of the jobs former President Bush's recovery plan are low-wage, low- or no benefit service and retail jobs. Many have called these jobs the 'new middle class' - the working poor. The overall growth in jobs masks a harsher reality for many families trying to maintain or build a middle class standard of living.

Key among them is ongoing debt coupled with paycheck paralysis.

More and more people each year are graduating from college or university starting their new life with a huge amount of debt, often $25,000 or more. Then they try to support themselves on lower wages than their parents made, in comparable dollars.

A generation ago finishing high school was all what was needed to get a job and to have a reasonable amount of financial security. Now a college or university degree is a basic requirement and not just any degree, look at all the people working in low paying jobs with a degree that can't find work in their chosen field. Today, there is a greater push for a Masters or PhD's becoming the minimum requirement.

In the last 30 years compensation for somebody with a university degree has actually decreased, when adjusted for inflation. The $8 and hour wage has not gone up in over twenty plus years while the cost of living has more than tripled.

Personal bankruptcy nationwide, before the Recession of 2007-?, exceeded 2 million, the highest annual level on record. During this recession it has more than doubled and the recession is not over.

So are these 2 million people Scofflaws?

For people who may not be familiar with the word scofflaw, it is a person who habitually violates the law and avoids their responsibility to their creditors, to pay their debt.

Credit counselors around the country are saying that people are coming into their offices can’t afford to pay even basic living expenses much less make the minimal payments toward their debts. All this while Corporate profits have reached record highs with senior managers and CEO's incomes having grown faster than the cost of living, now often 480 times higher than the lower wages they pay.

People are working longer hours for the same or a lesser amount of money each year.

From November 2003 to March 2004 when job growth increased the average hourly wage dropped by a little more than 1 percent. Companies, despite the fact they are showing profits, are reducing health care benefits, retirement funding and other benefits. Over the years many companies have declared bankruptcy in order to get rid of pension liabilities to their employees.

Yes, but there are Tax Cuts, aren't there?

Tax Cuts have to be paid for by somebody, and that often falls on people like you and me. If tax cuts were financed largely or entirely with spending cuts, or if the tax cuts were financed through a combination of spending cuts and a progressive tax increases, this is what experts project:

The net result seems to be net tax cuts for about 20-25 percent of households, financed by net tax increases or benefit reductions for the remaining 75-80 percent of the population.

So 75 to 80 percent of Taxpayers will be worse off with tax cuts.

The "losers" are going to be low- and middle-income class.

The trade deficit for last year is estimated to have swollen to another record high, above $700 billion, increasing America's indebtedness to foreigners. At some point in time these foreigners are going to want their money back.

Then what's going to happen? Are we going to have learn Chinese and carry a little red book by Mao?

Think again, if the U.S. cannot pay its debt the world will come knocking demanding payment.

A Shift In The Economy

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