Be Very Afraid: The American Economy Is Cannibalizing Itself, and We the People Are Going to Pay

[xchrom]

http://www.alternet.org/economy/be-very-afraid-american-economy-cannibalizing-itself-and-we-people-are-going-pay-huge-price



So how to explain this paradox?

As of November 1 more than 47 million Americans have lost some or all of their food stamp benefits. House Republicans are pushing for further cuts. If the sequester isn’t stopped everything else poor and working-class Americans depend on will be further squeezed.

We’re not talking about a small sliver of America here. Half of all children get food stamps at some point during their childhood. Half of all adults get them sometime between ages 18 and 65. Many employers – including the nation’s largest, Walmart – now pay so little that food stamps are necessary in order to keep food on the family table, and other forms of assistance are required to keep a roof overhead.

The larger reality is that most Americans are still living in the Great Recession. Median household income continues to drop. In last week’s Washington Post-ABC poll, 75 percent rated the state of the economy as “negative” or “poor.”

So why is Washington whacking safety nets and services that a large portion of Americans need, when we still very much need them?

It’s easy to blame Republicans and the rightwing billionaires that bankroll them, and their unceasing demonization of “big government” as well as deficits. But Democrats in Washington bear some of the responsibility. In last year’s fiscal cliff debate neither party pushed to extend the payroll tax holiday or find other ways to help the working middle class and poor.

[TomClash]

1. And if you are in the top 10% . . .

. . . And you advocate for the worker, the poor, the sick and the dispossessed, they ignore you, isolate you, marginalized you.

There is really only one solution.

[99th_Monkey]

26. If they don't kill you

Like they did to JFK & RFK.

[TomClash]

38. Shhhhh . . .

. . . or everyone will think you are "crazy."

[Berlum]

2. "Fail, America, Fail." - Republicon Starve-the-Beast Freaks (R)

[reformist2]

3. Here's a little fact to tell a Republican living on Soc Security

A full-time worker making minimum wage still makes LESS in a month than
what the average senior citizen gets in Social Security.

[A Little Weird]

4. Is that true??

Wow, I would like to use that on some of my family members. Do you know an official cite where I can verify that?

[JDPriestly]

31. If the federal minimum wage applied in all states, that would be quite true.

But Washington and California have higher minimum wages than the federal minimum wage (many workers in California), and New York is getting a minimum wage of $9 per hour while California is moving up to $10 per hour.

Here is the minimum wage chart, state by state.

http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

About 18 states have a higher minimum wage that $7.25 per hour.

The average Social Security monthly benefit is $1,269 per month. A 40-hour week times 50 weeks is 2000 hours times the federal minimum wage of $7.25 equals $14,500 divided by 12 equals $1208 except, as we have seen the average minimum wage across the country is higher than $7.25. So Social Security on average pays about the same, maybe even a little less than minimum wage.

[A Little Weird]

35. Thanks for the explanation

Some of my right-wing uncles have made comments about how little my grandmother gets in SS. I will point this out to them. It probably won't change their minds (they are too ensnared by the propaganda) but you never know.

[duffyduff]

39. Exactly. Furthermore I loathe the insinuation in that post that says seniors are doing so well

when in fact they are NOT and are gradually doing far worse.

"Average" means just that, and many, many, many people on SS are getting a LOT less than 1200 a month.

[JDPriestly]

40. Right. Whereas the minimum wages is that -- the minimum.

Theoretically, people do not earn less than the minimum wage although many, for example, many waiters and waitresses in restaurants, do earn less.

[Bohunk68]

13. ok, at 40 x $7.25 x 4.3 (weeks in a month)

It equals $1247. My SS check gets deposited today and is $813. That is only 2/3 (roughly) of the minimum wage and yes, I am in the half that does get less than average. Remember when you go quoting averages that you also acknowledge that because it IS an average, that half are below. That's a huge percentage.

[magical thyme]

17. citing an "average" most certainly does NOT mean that "half are below."

If 999 people get 1 dollar and 1 person gets $10,000, than the average is 10,999/2 = 5,499.50

You will not that half of the people (500 in above example) are *not* getting under $5,499.50.
999, or 99.9% of the people are "below."

"Average" is used as a synonum for "mean," not for median. When citing statistics, median is used for half above an amount and half below it.

The fact is, it may be *more* than half that don't get the average, or it may be *less* than half that don't get the average.

[Myrina]

21. Nope.

If 999 people get $1 dollar and 1 person gets $10,000, than the average is 10,999/100= 109.99

[magical thyme]

36. oops! yikes....

that's what I get for doing arithmatic while posting before my 2nd cup of coffee!

But the principal is the same. (2nd time I've posted that this morning, lol)

[JDPriestly]

32. The highest Social Security benefit is about $3,300 per month. Nobody gets $10,000 per month.

That reasoning is irrelevant.

Here is the minimum wage chart, state by state.

http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

About 18 states have a higher minimum wage that $7.25 per hour.

The average Social Security monthly benefit is $1,269 per month. A 40-hour week times 50 weeks is 2000 hours times the federal minimum wage of $7.25 equals $14,500 divided by 12 equals $1208 except, as we have seen the average minimum wage across the country is higher than $7.25. So Social Security on average pays about the same, maybe even a little less than minimum wage.

[rgbecker]

18. Actually, you are thinking "Median".

The "average" will not show where the "halfway" point is but rather is skewed based on where the greatest number lies. For example, if ten people average $1247 in pay that could mean almost anything...

person #1 - $1000
person # 2 - $1000
person # 3 - $1000
person # 4 - $1000
person # 5 - $1000
person # 6 - $1000
person #7 - $1000
person # 8 - $1000
person # 9 - $1000
person #10 - $3047

or :

person #1 - $100
person #2 - $100
person #3- $100
person #4 - $100
person #5 - $100
person #6 - $100
person #7 - $100
person #8 - $100
person #9 - $813
person #10 - $10857

The "Median" on the otherhand, which is often much more meaningful, shows what the guy in the middle of the list is getting...in case 1 above it would be $1000 and in case 2 above it would be $100. This is why many statistics from the census bureau are shown as "median" rather than average...or in addition to the average. In the case of Social Security, the average is running close to the Median throughout the database.

Here's the data on retirement beneficiaries...of 39 million the median and average are both around $1200/month.
http://www.ssa.gov/OACT/ProgData/benefits/ra_mbc201306.html

[JDPriestly]

41. Except that Social Security benefits top out at, if I recall correctly, about $3,300. And very few

get that. The lowest benefit is 0. The median would mean more but I don't find the median Social Security benefit.

[rgbecker]

42. I couldn't find it either, but if you....

add up the numbers on the left (all ages) at the link till you get to 18,696,000 (1/2 37,392,000) you'll get there it in the $1200-1299/mo. range. Very interesting to me that the average and the median were so close. But remember this is only the retirement benefits not any disability benefits or payment to survivors related to workers. Those all receive benefits generally less than the retirement benefits.

http://www.ssa.gov/OACT/ProgData/benefits/ra_mbc201306.html

lots of numbers at that link on all the benefits etc.

[JDPriestly]

44. The median and average are so close because the difference between the highest and lowest

benefit amounts is not that great. I actually thought the current average or median rates were slightly over $1300 per month. But my research shows me that it is lower than I thought. If you listen to the Republicans, you think that people on Social Security are robbing the country blind. Actually, the average/median payment is just enough to keep a person above the poverty level. Just a little higher than the poverty level. If the minimum wage is raised, the revenue coming into the Social Security fund will also go up just a little. But we need to raise the cap.

[reformist2]

23. The point is that 160 hours of work per month ought to amount to more than a Soc Security check.

[Skittles]

25. they'll take care of that, by reducing SS benefits

[Art_from_Ark]

28. In my mom's case,

she would be absolutely ecstatic if her monthly Social Security check were the equivalent of 160 hours of minimum wage work.

[JDPriestly]

33. It does in many states.

http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

California is raising the minimum wage to $10 per hour. New York is raising it to $9 per hour.

That is a lot of workers.

[JDPriestly]

29. Actually, it's about the same:

The average monthly benefit for a retired worker on Social Security is $1,269.

http://www.ssa.gov/pressoffice/basicfact.htm

Assuming you work full-time, 40 hrs. per week and have two weeks off for holidays and sick leave, you work 2000 hours per year. $1,269 times 12 equals $15,228. Divide $15,228 by 2000 and you get $7.61. While the federal minimum wage is $7.25, many states including California have a higher minimum wage. And the minimum wage in key states like California and New York is scheduled to rise much faster than Social Security will.

On Sept. 25, 2013, California Governor Edmund G. Brown signed into law a bill that will raise California's minimum wage from $8 to $10 per hour over the next two-plus years. Assembly Bill 10, which was signed by Governor Brown at ceremonies in both Los Angeles and Oakland, will raise California's minimum wage from $8 to $9 per hour effective July 1, 2014, and from $9 to $10 per hour effective Jan. 1, 2016.

This new law will make California the state with the highest minimum wage in the country. By comparison, the federal minimum wage is $7.25 per hour, and the state that currently has the highest minimum wage, Washington, has a minimum wage of $9.19 per hour. In his State of the Union address earlier this year, President Obama proposed raising the federal minimum wage to $9 per hour but has yet to do so.

http://www.mondaq.com/unitedstates/x/266804/employee+rights+labour+relations/California+Minimum+Wage+To+Be+Raised+From+8+To+10+Per+Hour

New York is bringing in $9 per hour.

ALBANY, N.Y., March 29 (UPI) -- The New York Legislature approved a $135 billion budget that included a $9 minimum wage and a middle-class tax rebate paid for by the "millionaires tax."

Gov. Andrew M. Cuomo, Dean Skelos and Jeff Klein, Senate Majority Coalition co-leaders and Assembly Speaker Sheldon Silver announced early Friday the passage of the 2013-14 budget before the April 1 deadline -- marking a state budget approved before the deadline for the third year in a row.

http://www.upi.com/Top_News/US/2013/03/29/New-York-approves-9-minimum-wage/UPI-91321364537092/

California and Washington have a lot of workers. Enough to raise the average of the minimum wage to above $7.25.


Once New York wages go up, Social Security average benefits will be below minimum wage.

[dreamnightwind]

5. We need the opposite

We need to expand the safety nets. Jobs are stagnant, wages aren't keeping up for those lucky enough to have a job. Older workers need earlier access to retirement benefits or Social Security, as companies for the most part aren't hiring older workers.

I didn't like the payroll tax cut, though, thought it weakened Social Security and set a bad precedent. There should be a different mechanism for getting more cash into the hands of the poor.

[dotymed]

7. Yes, the "payroll tax holiday"

Hurts SS.
The way to get money in the hands of the little guy is to tax the wealthy.
Tax dividend income at (at least) the same amount that we tax wages.

[KurtNYC]

6. real wages (buying power) have been declining since 1979

now the birthrate has declined to below a replacement rate. While the article focuses heavily on the stock market, the bigger share of real wealth is in real estate and the future of real estate looks pretty poor.

Declining demand -- fewer kids, fewer families -- and declining ability to pay have to lead to a decline in real estate values. Trillions of dollars in value reduced by even 5% is trillions lost. The 30-year mortgage is an American creation which seems designed to keep people paying interest throughout their working career. The grand bargain was that you worked your ass off for 30 years and then you can retire without house payments. What really made this work was that houses used to go up in value. So if one bought a house in 1983 for $60,000, one would pay about $100,000 over the 30 years but would have a house that is today worth $140,000 or so.

But what if home values continue flat or decline? Add in damage from more frequent hurricanes or the turbulence of cities abandoned by government and banks (Detroit) and you have a financial black hole. If the price of oil spikes again, you have a shift in real estate values because homes that are more expensive to heat or to commute from may become un-workable. Detroit is the first modern ghost town in America. Unfortunately it will not be the last.

[marmar]

11. The 700,000 of us Detroiters would beg to differ, but I suppose I get your point.

[KurtNYC]

16. I grabbed Detroit because so many are familiar with it but

here are the top cities for population declines:



http://online.wsj.com/news/articles/SB10001424052748704461304576216850733151470

I currently live in a small town, who's population is half what it was 100 years ago. Empty factories and vacant buildings and almost no leadership toward renewal. Just eeking out a little less year by year -- perhaps that is why the "cannibalism" in the OP headline grabbed my attention.

[JDPriestly]

30. That is good for the environment.

[eilen]

12. We won't be able to sell our home for a while for any decent price.

The house across the street is going into short sale (very sad, family broke up and one of the couple had major spending/debt issues) and the house next door is now for sale as the owner died in a tragic auto accident. His daughter makes close to minimum wage and cannot afford to keep it.

So we just concentrate on paying off debts and fixing it up as we like it--making it comfortable for us.

However, I live in the rust belt which has seen what the rest of the country views as recession for as long as I've been able to vote. I don't think we saw a boom as some cities like Nashville have (we have a similar population). However, I am grateful for living in a place so beautiful. I took my dog to a park with lots of trails to hike on and it was free to enter and she could run free--it didn't cost anything extra than what we already pay in taxes and the people I did encounter there were really nice, down to earth. Our property taxes are higher than most d/t our county's needs (I live in upstate NY) but our schools are very good; I'd say even our so-called bad schools are better than some you see in other places, they just have higher challenges--poverty and the PTSD children have from living in violent neighborhoods-- the teachers are well prepared and dedicated; the physical facilities are aging and could be much improved. The county seat -- Syracuse has financial problems like other cities do mostly related to pension obligations and other mandates and the fact we have had prior unscrupulous mayors who were not good stewards and put the city behind. Mayor Lee Alexander is one such person who did go to prison.

But we have seen major employers and industries leave and not come back. The most recent threat is Lockheed Martin leaving. Schumer convinced them to stay but for how long? Chances are they will bolt. There was a gun manufacturer who left to S. Carolina (not really torn up about that one). I'm convinced our county and city's future lies in new economy strategies and there are nascent organizations set up already to develop those. Instead of being in the same horrible decline and losing hope of things getting better, I prefer to frame our situation as one in transition. While Detroit may seem like the canary in the coal mine; it is more a cautionary tale--one that may surprise us in the end and be inspirational. Detroit's story is not yet ended.

[KurtNYC]

15. What scares me is that I am not hearing any vision for the future.

I don't buy into just calling 2008 a "recession" and implying that things will eventually go "back to normal". There is no going back. We are in a new phase economically. The population growth and having Europe in post-war recovery that put us on top in the 1950s is gone forever. The economy is now like a slot machine that doesn't payout any more. It's time for a new game but the current one may have to crash completely before any meaningful transition can begin.

A new economy would need more jobs, perhaps with less hours worked by each person. And wages adequate to sustain our standard of living. But the current world economy uses the USA to be the consumers who fuel growth in overseas factories by buying increasingly on credit. We are spending money we don't make any more in order to prop up the illusion of "normal" for as long as possible.

I'm hopeful that Detroit and other cities will transition. People are very willing to better the places they make their homes but they need a vision that involves them, one that they can plug into and help make a difference.

[grasswire]

27. Obama himself said the jobs are not coming back.

Not ever. We 47 percent are living in a different mindset than the rest. We think Washington wants to create jobs. Apparently that isn't the case. They are thinking global economy, and Vietnam is the next huge place jobs will go because workers there will work for 25 cents an hour.

[Laelth]

8. k&r for the truth, however depressing it may be. n/t

-Laelth

[marmar]

9. k/r

[cantbeserious]

10. The Oligarchs And Corporations Own And Control The Politicians That Own And Control Us

eom

[Dustlawyer]

14. Democrats included, they are almost all bought off!

[raouldukelives]

19. I think it is part of the zombie fascination making the rounds.

What Wall St can exploit, it has pretty much exploited. Resources are tapped out, small business and local companies the world over have been gutted and robbed, the only thing left is us.
The walking dead are out there everyday on the front lines in nice suits with expensive MBA's. They were promised the wealth of kings and the only recourse available to them anymore is ourselves.
At this point, if you choose to help them catch and consume others, you'll make it a bit longer than most. But they will eventually point and call for your flesh as well.

[woo me with science]

20. Corporate thieves, corporate fascists. nt

[bvar22]

22. Wanna hear something really scary?

The Sequester was a proposal that originated in the White House.

http://www.npr.org/blogs/itsallpolitics/2013/02/19/172425370/whose-sequester-is-it-anyway


http://www.washingtonpost.com/blogs/fact-checker/post/obamas-fanciful-claim-that-congress-proposed-the-sequester/2012/10/25/8651dc6a-1eed-11e2-ba31-3083ca97c314_blog.html



So the Sequester is just another SCAM too?

Have you noticed that NOBODY is responsible for cutting Social Programs these days? Through this latest clever scam, no politician must face the Home Voters and admit that they cut Meals-on-Wheels, Head Start, closed Libraries, or the myriad other "social" programs that help the Working Class & The Poor.
It is always "The Sequester" that is causing it.

When you think about it, this is BRILLIANT Political Strategy to lend Plausible Deniability for the cutting of Social Programs to everyone involved, Democrats and Republicans.

http://www.democraticunderground.com/10023612281

[xchrom]

24. the blue links of death is looking for you! nt

[adirondacker]

37. Mmmm. Some mighty fine tea they must be drinking in DC. nt

[dchill]

34. K & R.

[woo me with science]

43. kick