Thursday, October 04, 2012

Inconvenient Middle Class Truths

“the middle class . . . has been buried the last four years”

--Joe Biden

Fact: the middle class is doing poorly under Obama/Biden.  We earlier mentioned that since the Great Recession ended in June 2009,  median household income in America has fallen 4.8% under Obama.  Here's more:
  • From MarketWatch’s Ruth Mantell:
The Census report . . . showed that inequality increased in 2011. One gauge showed that inequality increased 1.6%, the first annual gain in the almost-two-decades of available data.
  • From Jim Tankersley, National Journal:
a 40-year-old man with a high school diploma earns 5% less today, in real terms, than he did in 1980, while a college graduate who’s 40 earns 25% more than before. The jobs available to high school graduates today also offer less prospect for rising pay. Levy’s research suggests that a male high school grad in 1980 could expect his income to grow by about 75% before peaking in his mid-40s, versus just 61% today.

So you think young college grads are making out? Think again. Of course, it is even worse if you don’t make college.
  • From Jordan Weissmann, the Atlantic: “About 1.5 million, or 53.6%, of bachelor's degree-holders under the age of 25 last year were jobless or underemployed.”
  • From Robert Samuelson, Washington Post:
A study from economists at the Kansas City Federal Reserve reports: Fewer than 60% of college freshmen graduate within 6 years; student debt now totals about $1 trillion; for 25% of borrowers, annual repayments exceed $4,584; default rates are almost 9%. "Defaulted borrowers may be sued, tax refunds may be intercepted, and/or wages may be garnished," the report notes.
Only one-third of children born to the poorest fifth of Americans graduate high school with at least a 2.5 grade-point average and without having become a parent or been convicted of a crime [emphasis added]. . . Brookings Institution [] economist Isabel Sawhill notes that gaps have widened between the children of poor and well-to-do families on school test scores, college attendance and family formation.

Where will the middle class find jobs? No small business creation, no jobs.
  • From Steve Huntley, Chicago Sun-Times:
Small businesses are a prime generator of jobs, yet fewer new firms are being established. According to the Bureau of Labor Statistics, the number of startups peaked at 667,000 in 2006 and has declined ever since, reaching 548,000 in 2009 and dropping again to 505,000 in 2010, the first full year of the recovery.
“The state of entrepreneurship in the United States is, sadly, weaker than ever,” observes Tim Kane of the Hudson Institute who analyzed the numbers. He cites “anecdotal evidence that the U.S. policy environment has become inadvertently hostile to entrepreneurial employment.” That includes uncertainty over taxes and regulations, among them the looming new taxes and rules from ObamaCare.
So if “President Obama is fighting to grow the economy from the middle class out,” as his campaign website proclaims, it’s not showing in the results.

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