The Decline of the Middle Class:

Thursday, December 6, 2007

Another Day, another 50 cents and if you figure inflation then about a quarter.

The decline of the middle class:

First let’s take some mathematical facts into consideration about the decline of the middle class. If you take the average annual income or the net worth of all Americans, then take the top 25% for the upper class, the middle 50% for the middle class, and the lower 25% for the lower class and see what percentage of the population is in each group. Then use this same formula and compare to 20 years ago. The Upper and Lower class has grown and the middle has declined. So what does this say? The wealthy is getting wealthier and the poor is getting poorer and the middle class is disappearing. This is a mathematical fact.

I don’t oppose the wealthy but I believe that the greed is out of control. I am not in favor of redistribution of wealth. I also believe in the middle class working man/woman. If you look at the gap between the wages that are being paid for the typical employee and the corporate managers, it has never been as great as it is now.

I was in business for 25 years. It has gotten very hard for small business to compete today. We have so many government regulations, tax disadvantages, high medical cost, foreign competition, and the never ending quest of people to sue; it is extremely difficult to stay in business. Small business has accounted for over 50% of the patents and new products that were being made in this country and accounts for a large portion of the middle class. Small businesses are disappearing. It is becoming Wal-Marts, Lowes, Home Depots, and chain stores that are large enough to have a legal department and with purchasing power to import goods. We end up with companies like Wal-mart that pay people less, keep them under 40 hour work weeks without benefits, and treat them as a number on a time slip. In the end we loss completion and we have little or no savings for the consumer. So what does this mean? We will make less but pay more. Our life style will deteriorate.

Many people believe that the wealthy does not want this to happen because it would in effect limit consumer spending. It is true that it would but it would not hurt their life style and that is what we are talking about here. The amount of money that you make is not a true measuring stick of your life style. But it is the gap that determines that. For an example: in a third world country you can hire full time domestic help for $25.00 or less a week. Now how many of us would not have someone at that rate cooking our meals, doing our laundry, and cleaning our house? Would it not improve our life style?

Where I work we use mostly Mexicans in our plant. A few years ago this was unheard of in this area. They are hard workers and they get paid a wage that you can not reasonably live on. Because of this import labor and the high unemployment in the area, companies are paying less than they have in years. It is supply and demand. It is now a buyers market in the manufacturing labor market.

So why am I becoming a truck driver? Someone has to deliver the goods make in China to the Wal-Marts.