In the U.S. what is happening to the middle class?
I just read an article from @zer0hedge about Walmart and Amazon and things they are doing that are signalling that they are aware of the demise of the middle class in the United States. That made me realize it was again likely a good time to talk about something I've spoken about in the past that I don't think many people consider.
I believe most people are aware of concepts of the middle class shrinking. It has been something I've been hearing about for at least 40+ years of my life. Yet, we tend to spend a brief amount of time thinking about it. We look for quick explanations. We look for quick suggestions on what we can do about it. Essentially we are looking for that big red EASY button. We want our information provided to us in an EASY way. We want any solutions to problems to be EASY. We want someone else to come up with those solutions so that it remains EASY.
The problem is that life isn't supposed to always be easy. We need some challenges to help our mind expand and grow just like we need different exercise to strengthen our muscles. Our mind needs exercise as well or else we risk it becoming stagnant, and more receptive to someone else making or decisions for us. In some cases it may even atrophy.
My interest in the middle class and what is happening there actually came from an odd direction. Coming from odd directions seems to be the norm for me. I find odd directional thinking refreshing, and adhering to the status quo as distasteful. I must be a rebel at heart.
My focus on the middle class actually came from considering the topic of MINIMUM WAGE. Now the normal discussions on minimum wage increases are that if the job becomes too expensive for the employer they will automate, or simply go out of business. Another common argument is that prices will eventually adjust as all those business have to increase their prices so they can afford to pay the new wages. It may take a bit but these price adjustments will eventually happen and we'll be back in the same situation where we have people demanding to increase the minimum wage.
Historically these things have indeed happened to varying degrees every time we have increased the minimum wage. Yet, my odd directional thinking gave me a glimpse at something else one day. It was something I've actually never seen anyone else ever talk about. Yet it is important. It ties directly into this entire Walmart and Amazon article posted by @zer0hedge.
Has anyone really emphasized what truly happens to the middle class due to minimum wage?
The middle class is clearly not the target for minimum wage increases. This would indicate that there likely is some proverbial line beyond which people are considered middle class. Everything below that is lower class in a purely financial scope of things.
My observation was that minimum wage increases cause erosion from the lower side of the middle class. In the long run I believe increasing the minimum wage is not only kicking the tin can down the road, it is in the long term creating more and more lower class by eroding them from the middle class.
If you happen to be on the lower part of the middle class and thus you get no wage increase from a minimum wage increase then as prices adjust and rise and inflate to compensate for needing to pay higher wages as they always do. Soon the lower class is back in the same position they were in before the minimum wage was increased.
Yet there are more of them. There are less middle class.
As the prices compensated and adjusted the purchasing power of ALL salaries/wages decreased. This included the people in the middle class. So the lower part of the middle class after this adjustment will now be in the lower class, and the middle class will be smaller.
We look for the easy solution. Keeping us lower class is beneficial to some entities, people, and organizations.
If you are poor and struggling the obvious easy answer is "I need more money". So when someone advocates for increasing the wages there is a cheer "Yes, increase the minimum wage". This cheer is not shouted just by the people that need the wage increase. Humanity as a whole tends to like to focus on how they are helping other people. We like to reach out and help others. We like to talk about how we've helped people, or donated to charities, etc.
So if someone proposes what seems like an easy solution and it feels good we have a lot of people cheering it. They usually don't actually stop to think things through. They don't really play out the scenario as a mental simulation and attempt to project what might happen over time. They don't really look at past implementations and see how the observations of the aftermath of those might impact these future simulated mental projections. That takes too much effort.
Instead they cheer on the "Easy" solution which it turns out really isn't a solution and in the long term seems to make the problem worse each new time the issue comes around.
People also operate on short term memories. They remember how when the minimum wage increased for a few months they could buy more food and do more things. That is enough. That is all they focus on. They don't really stop to wonder why if that was true they are right back in the same place asking for a minimum wage increase.
We have a population way too fixated on easy answers, easy questions, and feel good projects. We need a population that is not too lazy to actually seriously think about things. So how do we make that happen?
Ah yes, the infamous easy button. There are lots of places to lay blame... I tend to point to the origins as being rooted in the 1970's "positive self-esteem movement," when the first prizes for simply "participating" were given out. That has nothing to do with economics, of course... but quite a lot to do with a subtle shift in the collective mindset; a shift in people's perceptions of "what it takes" to get from point A to point B.
One of the things I have been tracking for a long time (pretty much since college) is meta economic patterns. We have been "losing ground" for a really long time... no matter what "numbers" might be available.
If you compare the "number of effort hours" required to acquire "one unit of typical lifestyle" in 1950... to the same relationship in 2017, we are SO HOSED... because the basket known as "typical lifestyle" has been inflated so much faster than effective buying power.
We're also hampered by the fact that our ever "faster" world is eroding our psychological capacity to project long term... we keep being taught how to "think in tweets" when we really need to be looking at 20, 50, 100-year time frames.
Edited to add: I tangentially wrote about some of this a while back, if you feel so inclined: https://steemit.com/life/@denmarkguy/sorry-folks-life-doesn-t-have-an-easy-button
That could be. I was born in 1970. I thus was in my first 10 years of life then being raised by my hippy parents. So I was totally unaware of that movement. :) I was raised on a lot of Peace, Love, and Flower Power though.
Meh... it was that whole "Little Johnny mustn't be made to feel bad about not running as fast as the other kids, so let's give him a medal simply for 'running' so he doesn't feel left out," thing.
Of course, it devalues true talent/ability, and meanwhile "Little Johnny" knows perfectly well that he didn't really "win" anything. But now he has been trained that he can "get something" without really putting much effort into life... and meanwhile those who excel also regress towards the mean because "why bother TRYING" when you get a prize, regardless.
I don't remember that happening until the 2000s when my kids were in school. I never got medals or knew people who did in the 70s and 80s for competing and not winning.
Might be it was more prevalent in Europe where I grew up.
Hah I barely managed to squeak in an up vote for your article... I saw 7 days and thought I might be too late.
Thanks... I actually wasn't "fishing;" I thought it had already expired this morning.
just leaving a comment here to remind me to to give this a full comment later, brain is a little off now
There's a war against the middle class... it's what threatens globalism! I'm going to do a post about it in a day or two.
shoot me a reply as well, a reply on any blog will work;>
https://www.zotero.org/stevedisme/items/q/neoliberal
if any of these look like they will help, let me know and I'll get you the pdf
Posted from chainBB
Will do! Thanks
Shoot me a reply when it is up. I don't want to accidentally miss it. There is a ton of activity on here so that is easy to do these days.
Will do... I'm using Africa as a model- why the globalists don't allow value added there, while taking it away here at the same time.
Here you go, my friend! As the old saying goes- read it and weep!
https://steemit.com/economics/@richq11/the-war-on-the-middle-class
I hadn't considered the "eroding" of the middle class before.
The @zer0hedge post reminded me of something I read a few weeks ago about Don Foss stepping down as the head of Credit Acceptance Corp, one of (if notTHE) largest sub-prime auto lenders.
He reportedly unloaded a buttload of his former company's stock after retiring.
What does that say about the lower end of the middle class?
upvoted and resteemed
Ugh... I hadn't heard about that. I have a mental picture of us all being lead around by some grinning maniac holding a red easy button like it is brains and we are a hoard of zombies looking for a meal.
Sadly, I think "The West" has come to the 3rd Generation in the saying that:
The 1st Generation starts a company builds the foundation.
The 2nd Generation comes along and builds a successful business on that foundation.
And the 3rd generation comes along and runs it right into the ground.
I wonder if in the long term this is the slow slippery slope back towards a feudal system? us and them. If so the concept of crypo's at least give a shining beacon of hope towards a future where the people begin to wrestle financial control away from centralised institutions .. we shall see.
I believe in reality that we have exactly had that for some time. Look at how the law is applied different to people depending upon status.
Yes and with politicians, banking interests and big business as modern royalty, I can certainly see your perspective and I have to say I agree. It's strange but at the same time I feel optimistic that a change is brewing .. and in my moments of reflection I remember that it's always darkest before dawn.
There is a clash. They didn't foresee the doors the internet would blow wide open. They are open and information is flowing. They are scrambling to regain control. Let us hope they do not.
I have my fingers crossed my friend.
They should be considerate at least for once. I so much buy your story @dwinblood Thanks for sharing!
Yup, great summary of how it works. Moving goal-post fallacy of sorts lol. Put a new marker here for +$2, but then the prices need to go up to compensate., so +$2 to the prices. Then nothing changed, except the middle class never got the bump.
Each time the "poor" minimum wage goes up, it makes the middle class get closer to that minimum wage lower end class, not raising the minimum wage class higher.
Simple math for all our great "leaders" to understand right? hehe
As for how to change this. As you say and I do in my work, it's the pleasure trap "feel-good" focus, which I have an intro presentation on it done for posting.
My work into truth, moral truth and consciousness/psychology, has led me to identify the WHY/root causal factors as such: #3 pleasure -trap "feel-good" focus, #2 belief over verifiable truth, and #1 consciousness itself as the root lack of self-knowledge from which these secondary falser modalities of living develop. All my main original work seeks to develop understanding on these topics to overcome our conditioned limitations. Evolving consciousness is the key. Truth will set us free :)
I've done my time(and then some)in retail...27 years in so far...
Here is my take on it from one who sells to the public at retail pricing.. Ok, so your government decides people need a raise to catch up with inflation(or so that is the excuse they tell you, when the truth is that they need to grow the tax base without enacting a tax increrase). well they are usually announced six months to a year before they take effect...or lead time. during this lead time retailers, manufacturers, raw material companies, energy companies, etc.. begin to increase their prices to offset the new wage increases. So i want you to think about thiss for a minute or so... raw material increases their pricing for steel, plastic resins, etc. Well the manufacturers now have an increase to their costs, both in material costs AND wages, so they increase the prices for their goods to offset these increases. So now, the wholesaler is paying more for the manufactured goods, and their wages...so you guessed it, they increase their prices to offset their increased costs as well... Finally, the retailers, the retailers have increased costs of doing business as well...except not only do they have to pay for increased merchandise costs, wages, but they also have to pay for increased costs of advertizing, insurance(all forms of insurance including property/liability/medical/shrink-loss, etc.), etc...
But i'm starting to get off of my main point... which is, The minimum wage is a ficticious wage to begin with. It was never meant to be a "liveable" wage but a standard minimum wage a single person could survive on... By the time you ever see 1 cent of that increase......Pricing is likely to have increased by 2% more than the wage increase you will recieve. Think i am wrong? ask an older person who began working 25 years ago and ask them if their wages buy more or less than they did 25 years ago... I began working back in 1985 for 3.85hr..... my wages, although far less than i make today bought more goods and services than my wages could ever buy today... unless a government decides to be fiscally conservative and runs a surplus, and inflates the value of their currency, your wages will contunially be worth less each economic cycle... any time you hear a politician talk about raising the minimum wage you should beat his ass, and tell him to cut spending and reduce the debt, before anyone gets a raise. your money will go much further if they would eliminate the debt... and add value to the currency...
I actually have lived through a few of these. I remember when the minimum wage got bumped to $3.50/hr and I worked at an A&W restaurant. It pissed me off. It was like $3.35/hr or something like that before that.
I was pissed because I had gotten a raise to $3.50/hr for hard work. Then the minimum wage kicked in and suddenly I was training and supervising people that made the same as me. My raise suddenly no longer mattered. It didn't matter that I had to work hard and consistently to get it.
Yet I saw it other times and I do remember times when for a VERY short period of time I could buy more stuff. It was really short. Yet apparently that is enough for the masses to buy up this bullshit and keep repeating the same mistake over and over.
So I agree with you. I have been aware of this for a long time. What I don't hear people really discussing is the fact that all of those increase impact everyone. So the middle class actually shrinks. Every time it is done in the long run it creates more people that can't get by. The amount of people needing the wage increase perpetually increase and the middle class begins to erode away.
well.... the middle class shrinks, and is more noticeable today because of the megachain multinationals who have an excessive buying power from companies to get better rates and discounts....and my favorite... the rebate for exceeding sales targets... the old mom and pop businesses simply cannot compete with that kind of system that rewards the big companies while continuing to put pressure on the little guys to sell for cost or below cost to compete... a lot of people think it's just happening in reatail. It's everywhere though... dental chains, funeral home chains, homebuilders who have grown so massive that their CPF(cost per Sq. ft.) to build a home is around 1/10th that of local builders...etc.... i could name close to probably 100 professions that used to be the backbone of the middle class that has come under fire from mega corporations... one of the first to go by the wayside was the local butcher shops back in the early 70's...supermarkets all but done them in...
The Fourth Turning is an interesting book.
How so? I haven't heard of it.
The Fourth Turning: An American Prophecy - What the Cycles of History Tell Us About America's Next Rendezvous with Destiny - by William Strauss and Neil Howe.
Hmmm.... I'll have to go research it in a moment.
I haven't read it myself, but the summary of it's premise are interesting, common sense ideas
Steem off! This is the end
You lost me.