Middle Class fACTs

People are more important than profits. Families are more important than market share.

by state graphic


“Nearly one in three Americans who grew up middle-class has slipped down the income ladder as an adult, according to a new report by the Pew Charitable Trusts.”


Long-term unemployed are ‘trying to take any job at any wage’

For Chicago area residents Janet Edburg, Paul Jordan and Andy Gebel, this Labor Day is no different than last year’s, or Labor Day 2009 — they’re still unemployed.


Wage gap widens in Delaware

The wage gap between the richest and poorest Delawareans has widened sharply since 2000, with many in lower-paying occupations enduring a lost decade of wage growth.


The fallacy of post-industrial prosperity
By Harold Meyerson, Published: September 4

Of all the lies that the American people have been told the past four decades, the biggest one may be this: We’ll all come out ahead in the shift from an industrial to a post-industrial society. Yes, we were counseled, there will be major dislocations, as there were during the transition from an agrarian to an industrial economy, but the America that will emerge from this transformation, like the America that emerged 100 years ago, will be one whose citizens are ultimately more prosperous and secure than their industrial-era forebears.

What a crock.

On Labor Day 2011, the America that’s replaced the vibrant industrial giant of the mid-20th century is a basket case. We’ve lost the jobs that created the broadly shared prosperity that made us the envy of the world. In their place, when we’ve created jobs at all, they’ve generated neither prosperity nor security.

The most prescient writer on post-industrial America offered a sobering perspective. In his 1972 book “The Coming of Post-Industrial Society,” sociologist Daniel Bell predicted a future of service jobs, rising consumption, compensatory entitlements and wars over taxes.

Even as Bell’s prophecies began to be borne out, though, the champions of the new economic order — from General Electric’s Jack Welch to every New Democrat and any old Republican — assured us that America would flourish as a post-industrial innovator in the new global economy, crafting the cutting-edge technologies whose actual assembly we could relegate to less-skilled workforces on distant shores. Thirty years ago, when defenders of American manufacturing first suggested that the nation commit to a “domestic content” standard in the goods we bought, they were howled down by nearly every economist and editorial writer in the land. (A friend counted 98 newspapers that editorialized against it, and none that wrote in favor.)

Today, the economy that arose on manufacturing’s ashes has turned to ashes itself. The Wall Street-Wal-Mart economy of the past several decades off-shored millions of factory jobs, which it offset by creating low-paying jobs in the service and retail sectors; extending credit to consumers so they could keep consuming despite their stagnating incomes; and fueling, until it collapsed, a boom in construction.

We are only now beginning to understand the toll this economy has taken on America’s workers — and on our working men in particular. A stunning study from Michael Greenstone and Adam Looney of the Hamilton Project, published in the Milken Institute Review, reveals that the median earnings of men ages 25 to 64 declined 28 percent between 1969 and 2009. Within this age group, the median earnings of men who completed high school but didn’t go on to college fell 47 percent, while the median earnings of male college graduates also declined, if only 12 percent.

Part of this decline stems from the shrinking share of working-age men with full-time jobs, which fell from 83 to 66 percent between 1960 and 2009. The other part stems from the fall in inflation-adjusted median yearly earnings of working-age men who have full-time jobs, which have shrunk by about $5,000 since the mid-’70s. Combined, write Greenstone and Looney, these two declines explain why the earnings of American men “haven’t been this low since Ike was president and Marshal Dillon was keeping the peace in Dodge City.”

Anyone seeking to understand the pessimism, frustration and rage of working-class men needs to begin here, with Greenstone and Looney’s two-by-four-to-the-head tale of decline. White working-class men in particular have become a disproportionately receptive audience for those who scapegoat immigrants and minorities for the damage that has actually been caused by economic and political elites blissfully blind to the devastation ushered in by their vaunted new economy.

Since that new economy blew up three years ago, many of those elites have been disabused of the financial fantasies that ordinary Americans long ago ceased to entertain. The fact that Greenstone and Looney’s study emerged from the Hamilton Project — a pillar of new-economy thinking, founded by Clinton Treasury secretary Robert Rubin — is evidence of a paradigm shift in economic vision. From centrist Democratic groups such as the Progressive Policy Institute and Third Way, to economists such as Hoover Institution Nobel laureate Michael Spence, to chief executives and former chief executives such as Dow Chemical’s Andrew Liveris and Intel’s Andy Grove, the new watchword for America’s future — however challenging it may be to get there — is manufacturing.

Post-industrial America turned out to be a bust. The time for neo-industrial America has arrived.


Labor Day blues
By Robert J. Samuelson, Published: September 4

On this Labor Day, there is little good news about labor. We have entered a long period of crushing unemployment and downward pressure on wages that may well transform the nation’s economic and political landscape. There was no job growth in August, and the overall numbers are stupefying: 14 million unemployed; nearly 9 million part-time workers wanting full-time jobs; 6.5 million who want jobs but have given up looking and are, therefore, not counted in the official labor force. People are only gradually recognizing the magnitude of the problem.


Is ?
Published: Sunday, September 04, 2011, 9:00 PM

By Olivera Perkins, The Plain Dealer

CLEVELAND, Ohio — Deborah Normand is making $10,000 less a year, but she feels she’s among the lucky ones.

She went from working as an office manager for a wholesale business to a clerical position, and it took a year and half for her to find that job.

“I am happy to be working,” said Normand of Berea.

According to a new report by Policy Matters Ohio, Norman’s job experience may be the new reality.

Most hourly wages of workers in Ohio dropped faster during the last decade than their counterparts in any other state, according to a report by Policy Matters Ohio that was released today. ( See the results on our poll of workers worried about being laid off and vote yourself.)

The report confirms what local economic experts have seen for years: Ohio has suffered massive job loss in the last 10 years or so especially in manufacturing, which created and sustained the state’s middle class. And most of those jobs seem not to be coming back. Ohio’s latest unemployment rate is 9 percent.

“I just didn’t expect us to come in first (in the rankings),” said Amy Hanauer, executive director of Policy Matters, the non-profit, liberal research organization focused on economic policy.

“Wages are shrinking, jobs are elusive, long-term joblessness is the highest on record and men’s employment is the lowest on record,” she said in a press release.

The study said that Ohioans saw the median hourly wage drop by 86 cents between 2000 and 2010 in inflation adjusted dollars. That meant that the median wage went from $16.02 to $15.16 per hour.

Nationally, the figure increased 51 cents from $15.49 to $16.00.

Ohio was one of only 10 states to see wages drop during that decade. Tennessee, where wages dropped, 73 cents an hour, from a median of $14.53 to $13.80, came in second. Michigan, where the median hourly wage decreased 70 cents, from $16.60 to $15.90, ranked third for wage decline.

The Policy Matter study supports other data showing how workers, often those in the middle class, have lost ground. Such findings include:

• People who worked in Cuyahoga County lost a combined total of $5.2 billion from their paychecks between 2000 and 2010, according to an analysis of payroll data of residents’ wages compiled by George Zeller, an economic research analyst. The inflation-adjusted figures showed that Cuyahoga residents lost more from their paychecks than their counterparts in any other county. The statewide total was $17.7 billion.

• Since 2000, Ohio has had more than one-fourth of the net job losses in the United States.

• The share of new hires in greater Cleveland making at least $20 an hour dropped from nearly 15 percent in 2001 to roughly 12 percent in 2009, according to a Plain Dealer analysis of inflation-adjusted federal data.

• Only one in four of people laid off during the Great Recession found full-time work; and half of the new jobs paid less, according to a report released last week by the John J. Heldrich Center for Workforce Development at Rutgers University in New Jersey.

For more than a year, Normand followed what the experts said would lead to a job: Volunteering. Job counseling. Sending out resumes and filling out on-line applications daily. Then she had to have the honest talk with herself. In her 50s — a time when she thought she would be settling into her dream job — Normand had to shift to working her way up from the bottom.

“When you’re older, it is harder to get a job,” she said. “The longer you have been out of work, the harder it is to get a job. There are some places that don’t even want to look at you if you have been out of work longer than a year.”

Though she is working, Normand is struggling.

Nancy Ruffner stood in line at the job fair with thousands of others at an event sponsored by U. S. Rep. Marcia Fudge early last month at Cleveland State University. She spoke to many qualified people who had been out of work for months. Ruffner was laid off in July from her job as a staff coordinator for a nonprofit agency that she said lost funding because of state budget cuts.

When a position paying “slightly less” that had benefits came along, she took it.
Ruffner also considers herself lucky. She found something in her field with a growing company, which she hopes offer her the chance to move up. Ruffner hasn’t lost hope of her middle-class dream.
The Policy Matter study says more workers will have to abandoned their desires for a middle class lifestyle because wage inequality is growing.

“Readers could be forgiven for assuming that nobody is winning in today’s economy,” the study states.

“But as has often been the case in this generation, in fact productivity is high and growing, and incomes at the very top are ballooning. The growth is simply not being shared.”

The study said workers at the very top were the only to see their wages increase between 2000 and 2010, those in the middle and lower experienced the most wage loss. For example, the study says that only workers in the 90th percentile — or the top 10 percent — who had a median hourly wage of $31.92 in 2000, saw them increase to $32.68 in 2010.

At the 50th percentile — or median — wages fell from $16.02 in 2000 to $15.16 in 2010.

Another example was the growing gap in wages between the lowest paid workers and the highest paid. In 2010, the 90th percentile worker made 4.14 times what the 10th percentile worker, with a median of $7.89, made. In 2000 the gap was 3.91 times.

James Sherk, a senior policy analyst in labor economics at the conservative Heritage Foundation in Washington, D.C., said such comparisons are flawed because they don’t take benefits into account.

“That is going to be a larger share of your income if you are making $30,000 a year, than $90,000 a year,” he said.

Proving disparity often sparks debate, said Veronica Kalich, an economics professor at Baldwin-Wallace College. It draws upon not only numbers, but sociological terms like “middle class.” It deals with percentiles, which often do not contain equal numbers of people. It often doesn’t take into account how factors such as education influence a person’s ability to find a job and advance. People with college degrees, for example, have the lowest unemployment rates.

But the true debate is often centered on what it takes to become and remain “middle class,” and whether it has become harder for the average Ohioan to do during the last decade.

In terms of official definitions, “middle class” has meant a “household” earning between $30,000 and $80,000 a year. A household can contains “one” person or it can have many, she said.

Individual workers often measure middle class in terms of lifestyle. Whether they can afford a house, buy a car, take an occasional vacation or send the kids to college.

Zeller said as manufacturing jobs disappeared, it has been harder for Ohioans to remain middle class using either definitions. The mean annual earnings for a manufacturing job in Ohio for the third quarter of 2010 for example was $51,682 and non-manufacturing it was $46,517. For a field like retail, which has become popular among many of the non-educated workers, the mean average is $24,333.

He is optimistic by recent trends like Cuyahoga County regaining 1,729 manufacturing jobs — a 2.6 increase — during the last year or so. But many of these jobs don’t pay what the old manufacturing jobs did. For example, a recent United Automakers Workers agreement requires entry level workers to make about $14 per hour, roughly half the wage made by more senior workers.
Sherk said pursing a manufacturing strategy was risky for other reasons.

“Increasingly it is not a worker on the assembly line, but a robotic arm or computerized system that does that,” he said. “If you can produce more with a lot fewer workers, it is going to be difficult for companies not to do that.”

Local economist Jack Kleinhenz, also an economic forecaster, said experts and policymakers have know what ails Northeast Ohio for years, now it is time to work on a viable plan.
“There are no easy solutions,” he said. “It takes time for a region to transform itself.”


What little growth in income that Ohio has seen follows the national trend: It is concentrated among the state’s most-affluent residents. According to the new “State of Working Ohio” report from Policy Matters Ohio, the median wage in Ohio, adjusted for inflation, has fallen 0.5 percent since 1980, but it has increased 17 percent for those at the 90th percentile (those who make more than 90 percent of everyone else).

The report also says the median wage in Ohio has declined more than in any other state since 2000.

Nationally, an analysis of tax-return data by economists Emmanuel Saez and Thomas Piketty, from the University of California, Berkeley, and Paris School of Economics, respectively, found that the bottom 90 percent of earners took home 65 percent of all income in 1980. That number dropped to 54 percent by 2008 — and most of the gains went to the top 1 percent, which in 2008 included those earning more than $308,000.

In 1986, the wealthiest 1 percent took in 11.3 percent of all income, according to IRS data. By 2008, that number had grown to 20 percent.

“At the bottom end, there is no wage growth, and people are having a hard time getting work,” said David Cay Johnston, a Pulitzer Prize-winning reporter and author who has written extensively on America’s tax system. “People who have an education are pulling away.”


Middle class ‘hard to define’

By Jim Siegel
The Columbus Dispatch Sunday September 4, 2011 8:42 AM


Read between the lines of help-wanted ads
By Kurt Ludlow
Sunday September 4, 2011 9:48 AM

Since graduating in May from Keystone College north of Scranton, Pa., Deniece Gans-Torruellas has put her communication degree to good use.

She’s been communicating with — or trying to communicate with — a long list of prospective employers.

The 22-year-old, who’s living in Columbus with her grandfather, has applied for more than 100 jobs so far.

“Sometimes, you just lose hope,” she said, scrolling through screen after screen of online employment listings. “You’re like, ‘There’s nothing out there for me. No one’s going to call me back.’  ”

That’s why Gans-Torruellas was thrilled to get a call about her application for what had been described in an online recruitment ad as a marketing position.

Her excitement grew when she was invited to a face-to-face interview.

Not until a second interview did the would-be employer reveal that the “marketing” job might not be quite what Gans-Torruellas had imagined.

“It was a door-to-door sales job,” Gans-Torruellas said. “It was disappointing, to say the least. It’s not like I’m above that kind of work — I’m not. It’s just not what I was looking for, and I felt taken advantage of.

“I felt so stupid afterward.”

Janice Worthington, executive director of Columbus-based Worthington Career Services and an employment counselor for more than three decades, said Gans-Torruellas got duped — just like a lot of job-seekers she has heard from recently.

“The problem with that is not that it’s a straight-commission cable-TV (sales) job,” Worthington said. “It’s the misrepresentation.”

These days, employers know that they have the upper hand: With the unemployment rate still hovering near 9 percent, many people are scrambling to find any kind of steady income, even if it means lowering their expectations or dispensing with their usual healthy skepticism.

Some job listings aren’t ads for jobs at all: They’re sales pitches for career-marketing services. In other words, the companies that place those ads want the “applicants” to hire them — not the other way around.

And, unfortunately, some recruitment ads are out-and-out scams intended to obtain sensitive personal information, such as Social Security numbers, birthdates and bank-account numbers.

Now more than ever, Worthington said, applicants need to read every line of a recruitment ad — not to mention what’s between the lines — very carefully.

They should be wary, she said, of any ad that glosses over what the job entails, that promises unlimited income potential, that downplays the experience or credentials required, or that uses “ fluffy words” to describe the ideal candidate.

“  ‘Highly motivated self-starter with extremely good people skills’ — that’ll appeal to everybody,” Worthington said. “So all of the people who are feeling desperate for a job and rejected — they’re all going to come flocking to something that might be a spider web.”


About Jerry Frey

Born 1953. Vietnam Veteran. Graduated Ohio State 1980. Have 5 published books. In the Woods Before Dawn; Grandpa's Gone; Longstreet's Assault; Pioneer of Salvation; Three Quarter Cadillac
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