The Five-Step Process to Cheat the Middle Class Worker

[xchrom]

http://www.commondreams.org/view/2013/01/14-2

***SNIP

1. Boost productivity while keeping worker wages flat.

The trend is unmistakable, and startling: productivity has continued unabated while wages have simply stopped growing. Improved technologies have reduced the need for workers while globalization has introduced the corporate world to cheap labor. In effect, the workers who built a productive America over a half-century stopped getting paid for their efforts.

***SNIP


2. Build up a financial industry that has no maximum wage.

This is where the money is. In 2007, before the financial crisis, a Harvard survey revealed that almost half of the school's seniors aspired to careers in finance. The industry's share of corporate profits grew from 16% in 1980 to an astonishing 45% in 2002.

***SNIP

3. Keep accumulating wealth created by the financial industry.

Experienced schemers have undoubtedly observed that over the past 100 years the stock market has grown three times faster than the GDP. The richest quintile of Americans owns 93% of such non-home wealth.

***SNIP

4. Tax yourself as little as possible.

The easiest and least productive way to make money - holding on to investments - is also taxed at the lowest rate. In addition to the capital gains benefit, tax ploys like carried interest, performance-related pay, stock options, and deferred compensation allow hedge fund managers and CEOs to pay less than low-income Americans, and possibly even nothing at all.

[Scuba]

1. 5. Lend out your excess money to people who can no longer afford a middle-class lifestyle.

They won't pay you a living wage, but they'll lend you money. Think about it.

[xchrom]

2. +1

[pipoman]

4. Modern day "scrip"

Scrip is a term for any substitute for currency which is not legal tender and is often a form of credit. Scrips were created as company payment of employees and also as a means of payment in times where regular money is unavailable, such as remote coal towns, military bases, ships on long voyages, or occupied countries in war time.

snip

Workers had very little choice but to purchase meals and goods at a company store. In this way, the company could place enormous markups on goods in a company store, making workers completely dependent on the company, thus enforcing their "loyalty" to the company. Additionally, while employees could exchange scrip for cash, it was rarely done at face value. Scrip in this context was valid only within that area or town where it was issued. While store owners in neighboring communities could accept the scrip as currency, they rarely provided a 1 for 1 exchange. This was to avoid the risk of having coins/currency that were worthless anywhere else.

http://en.wikipedia.org/wiki/Scrip

[kentuck]

5. I remember "scrip"...

as a kid, and my Dad was paid with "scrip" to work in the coal mine. He could cash it in at the company store, usually not too far from the mine, for flour, cornmeal, salt, lard, and beans.

[harmonicon]

12. "prole chips"

This is what a huge number of people can't seem to grasp. While we can talk about a worker's wage in terms of dollars, and the economy at large in terms of dollars, these are not the same things.

Workers are paid in prole chips, and they can use their chips for things like housing, cars, and entertainment. While someone may get $30,000 of chips in a year, this is not the equivalent of 1% of $3,000,000, and even less than 0.01% of $30,000,000 because what the money can actually be used for is completely different. While the $ symbol is the same, the actual function of the money is completely different.

However, one way this system is kept in place is by duping a majority of the people who are payed in prole chips to thinking that they're a part of some "middle class" which does not exist. Functionally, there no longer is a middle class. There is a tiny percentage of those at the top and the proletariat. If we refuse to face this basic truth, we're fucked.

[JDPriestly]

18. But that is only half the story. The financial sector and the wealthy loan their money to the

government, pay too small a portion of their money in taxes and then complain because the government owes too much money.

Think about that. Instead of paying enough in taxes to cover the cost of living in a healthy, beautiful, prosperous America, the rich LOAN money to our government and then COMPLAIN because the government owes (them and itself) too much money.

This is the case at all levels of government from the top to the bottom and all the way back up. They pay too little in taxes and then complain that the government is going broke.

And to top it all off, they have the unmitigated gall to BORROW money in the names of their banks and OVERCHARGE in the names of defense contractors from the very government that they claim has too much debt.

Now that takes nerve.

[Scuba]

20. That's why they call 'em "banksters".

[4Q2u2]

22. TARP

Banks took the money interest free. It was supposed to get them to loosen the purse strings and get back to lending money. What did they do, they bought Treasury notes with that money and got free interest from the tax payers. Here is the best part, those Treasury notes were being sold to Fund TARP.

[pipoman]

3. I would make it 6

move all of these down 1 and make #1, "Engage in "free trade" with 3rd world countries with no mandate for the 3rd world country to enact worker and environmental protections"

Oh, and allowing states to override laws securing the collective bargaining rights for workers would be right up there too..

[safeinOhio]

6. One step would counter it.

Tax wealth, not income.

[4Q2u2]

7. Pay With What You Have

They always say that the top 2% pay 99% of all the taxes in this country. Even if that is correct? Do you not pay with what you have. They really never make mention of the other top 1% who pay their debt to this country with blood. I am pretty sure there are no Platinum spoon babies serving or have served in Iraq and Afghanistan. It takes both coin of the realm and citizen servitude to their fellow Americans. No one can stand on one leg for long. It is also another way we have perverted money over all else. That is another step in how to destroy the middle class. Money above all else.

[Hotler]

8. I have no hope. I see no future. n/t

[daleanime]

10. I see several....

the only happy ones are where we change this, nothing good comes from letting it stay as is.

[plethoro]

11. The system is imploding now. There are

approximately 3 decades left and the 1 per centers will eradicate themselves. That will give hope to future generations. But, you are right--none now. But it is for far more reasons than simply finance. It is our morals and depravity. We are ancient Rome without the chariots. Good luck to you.

[harmonicon]

9. There are middle class workers?

I had no idea. I think I'd like to know more about that part.

[ieoeja]

16. People who make good money, but are not independantly wealthy.

I, for instance, paid off my house last year. Then a basement wall started leaking, I tore off the drywall and discovered that my house sits on wooden pilings with clay tiles stacked in between with it all covered by polyurethane. It must have lasted decades this way, so I will probably just patch it.

Aside from my 401(k)**, my savings is shit. And I am 50 years old which doesn't give me much time to save for retirement.

We have roughly 400 people in this office. There are a few low paid mail-room jobs. And a few jobs in the $250k to $800k range. Most are in the $40k-$150k range putting them in middle class. And there must be 10s if not 100s of thousand such workers in downtown Chicago.

I know a guy who puts up scaffolding. On skyscrapers. He makes very good money, but he is not independantly wealthy. Ditto a union pipe-fitter.




I don't trust the 401(k) any farther than I can throw a fund manager. I probably wouldn't even use it at all if not for the profit sharing and immediate 50% employer match. Back in 2000 I moved all my money to the "Short-term, Government Guaranteed" fund the day the Supremes chose GWB. This fund never earned more than 1% to 2%, but it never lost money. And there is ALWAYS a big drop in the market when a Republican first takes office.

I lost 50% of my money. In the lowest-supposedly-almost-no-risk fund.

And this is where "over the long haul" investors piss me off. Sure, I only had that one huge. But that 50% drop probably wiped out two decades of investment gains. And, of course, lost all the compounding it built up, so that has to be rebuilt.

I assumed another big cash-out would occur in 2008 with a Republican leaving the White House. So I had my 401(k) in a true, almost-no-risk fund which we added after the 2001 debacle. I dodged the 2008 disaster. Then took advantage of a TARP fund and did quite well knowing I was investing in something desiged specifically to lose money. I'm no money manager, but even I had seen enough bullshit in the market by then to realize that something designed to lose money would almost certainly be an investment fortune the first few years.

The stock market is really, really stupid. I mean, GroupOn with a $1B debt comes up with a plan for paying down the debt: offer to essentially sell that debt to the market by going public. And the market ate it up! Then were shocked to discover the price plummeting because the company has never made a profit and had no plan on how to make a profit short of selling it to people on the market.

So you have to ask yourself, what morons would buy that stock? Given that 401(k) fund managers aren't investing their money.... The fund said it would invest heavily in well established IT stock. $1B debt is pretty well established. And they do get paid to buy and sell stock. So here's some stock the 401(k) participate had no idea we were going to buy for them. Suckers.

401(k) is a ponzi scheme. As long as we have more workers contributing, values will keep going up "over the long haul". What happens when we have more retirees withdrawing money? The fund managers will have to start selling stock instead of buying it. What do you think is going to happen to the stock market when all the 401ks out there are selling? The 401(k) bubble is going to be the greatest burst of all times.

[harmonicon]

19. That's not what middle class means though.

Sure, that's what it means now, but only to keep the working class divided against itself.

What was the middle class became the nouveau riche and are now our current "one percenters." The old aristocracy is largely gone, though it hangs on in some places.

The middle class were the business owners and bankers. The middle class had servants. Towards the end of the industrial revolution, and especially after WWII, there was a push to provide the working class with many "comforts" of the middle class. This is when there was a push to homeownership (but only the spectacle of ownership, as it is likely that the bank will own the house far longer than the person living in it ever will after paying down a mortgage), the personal automobile, vacations (though even this is now disappearing), etc.

Simply having these once-luxuries available to the working class does not make that section of the working class the class equivalent of the middle class, as they do not own the means of production. They do not own the factories and the banks, but are rather beholden to them.

Furthermore, the Reagan-era demonization of the poor and working class was more successful than I imagine was even intended, and that's the real problem we're now dealing with. Step one was getting the working class to self-identify as middle class. Step two was getting those same people to actively participate in their own selling-out through a campaign of demonizing "the poor" - slitting their own throats.

Someone making $150,000 a year (and most aren't - the median is less than half of that) isn't in the middle of the person making $15,000 and the person making $2,000,000. If you're working for your money, you're working class.

[hfojvt]

23. someone making $150,000 a year is not working class

they are upper class, and they know it. Most of them do not have a nickel's worth of solidarity with those making $20,000 a year.

[harmonicon]

26. Keep telling yourself that.

It's exactly what the real elite - those with the type of wealth that can actually buy influence - want you to think. You're making their job much, much easier.

[hfojvt]

27. sure I am

like it is my fault that the $150,000 crew doesn't give a shit about the bottom 50%. It's the bottom 50% that gets 13% of the national income, not the top 49%. The top 1% gets 20% leaving 67% for that 49%. Most of them have no more interest in sharing income, wealth or power with the bottom 50%.

The top 20% is quite able to buy influence as well. That's why 65% of the recent tax cuts went to the top 20% and only 18% went to the bottom 60% - because the top 20% wants it that way. Not because people like me are rejecting solidarity with the top 19%.

When it comes to sharing tax cuts it is
$600 billion for the top 1%
$700 billion for the top 4%
$1.1 trillion for the next 15%
$111 billion for the bottom 20%

Yeah, sure, it is all about solidarity for that 80th-95th percentile. They don't have any real power. It was just a fluke that the tax cuts favor them.

[YoungDemCA]

24. America never really had an "old aristocracy"

Old money, yes, but not a landed gentry like Europe did.

[WinkyDink]

13. Finance is not an "industry."

[Ikonoklast]

14. The funniest thing is, if left unchecked, Finance is going to destroy the very system it thrives on,

like a parasite that kills its host.

That is a dead certainty.

[Stainless]

15. "Zeitgeist: The Movie"

My nephew recommended it so I watched it on YouTube on Saturday. I was blown away! There are three movies and they are all available to watch for free. The part about how money is created and manipulated occurs at the beginning of the second film:"Zeitgeist: Addendum". I will finish watching the series this week and I'm sure I will be amazed by what I learn.

[Smilo]

17. No money for pay raise excuse

No pay raise for two years, but I have seen the top tiers and upper management get their raises and bonuses - I was told sorry there is no money, now go to work and expect me to call evening and weekends and any time of day - although not legal because I am hourly paid, I make myself available - I have no choice - speak out and lose the job.

And there are many people like me and those that are being screwed even more.

[Follow The Money]

21. then blame your victims for the economic mess you made and demand more

n/t

[xchrom]

25. +1