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No Gains in Income



September 12, 2009 – Comments (4)

Mish has a post about how in the last decade incomes have not gone up and it is the first time this has happened in the 4 decades this information has been tracked.

Here is some of my thoughts on it...

First, it says it is corrected for "inflation."  In the context that they use the word inflation they mean corrected for price increases.  I say bs on how it has been corrected.  The consumer price index has been so manipulated the true increases to household costs have been understated for years.   It is pretty bad that they can't show household income increasing using data that has been grossly manipulated to understate increased costs.

I am looking at the tables and I don't believe for a second that poverty rates have gone down.  It seems to me that I constantly read about increased demand on food banks, increased homelessness and other indicators of poverty.  Some of the recent stories about homeless children say that those figures have doubled in the last few years.  I remember when I driving north to my job for the first time and there was a story about food banks and I remember this woman talking about how important the food bank was to her not just to help feed her kids, but for personal items like tampons.  She was a single mom that worked full time at a job that paid $10-11/hour.

I always kept a budget and I've always had a good memory for numbers and I know making ends meet at a low paying job when I was young wasn't that hard, but now I shake my head and I don't know how low wage earners do it.  Well, actually, there is a lot of evidence that they aren't making ends meet.

I get so sick and tired of media reports suggesting the baby boomers have been hardest hit by these problems because they are going to retire do not have time to recover.

How is that harder then a person who probably doesn't have the opportunity to ever own a home and have owning a home as a way to reduced living costs in retirement? Or finding a "good" job in the first place?

How is that harder just paying the cost of education takes a young person into their 30s these days?

I saw people paying for homes outright by the age that today's young people are really just getting started.  They don't have the job benefits the boomer generation had.  They have not had and are unlikely to enjoy increasing income as the costs of supporting a family increases.  Indeed, they do not have anything even remotely close to the job stability that boomers had.

Governments also did not have the levels of debt, and that debt will have to start to be paid back so although I can't say this is a truth now, it is likely they will also pay higher taxes their whole lives, especially with the boomer's government pension expectations.

I can not understand how anyone can say that younger people have a chance to make it up when the opportunity for that "chance" is slim and uncertain and the starting burden is so high... well, where exactly is this "chance" coming from?


4 Comments – Post Your Own

#1) On September 13, 2009 at 1:25 AM, AbstractMotion (< 20) wrote:

Well so far my understanding of Obamanomics is that basically we start with "hope", by some mysterious alchemical process this hope is transformed into "change".  This "change" makes everything better.  However details, as you can imagine, have been few and far apart.  To my knowledge Robert Gibbs has yet to confirm allegations of wizard involvement.


But on a serious note, we're kind of screw (the youth).  Every projection shows that entitlement programs are going to crush funding for necessary programs in 8 years.  I'd like to think at that point people would come to their senses, but honestly we're outnumbered and the bulk of the population will be 50+ in age.  Most of this group will have modest if any savings and be primarily concerned with maintaining their own standard of living (afterall that's what they've been doing for the past 30 years at least).  I don't really know what's going to happen, but I imagine US society will be become increasingly age polarized.  I suppose if I'm really lucky I'll make all my money off investments and avoid the FICA tax altogether, but I'm not counting on it. 

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#2) On September 13, 2009 at 7:22 AM, Mark910 (< 20) wrote:

It is hard to factor in the differences of the generation.  I am a baby boomer and the average house when I was growing up had no AC, no built in appliances and was a bit over 1000 square feet.  People on welfare today live in luxury compared to the way I grew up even though we were middle class and had a hard working father who was always employed.  I think Society has change so that it is hard for the new generation to maintain this incredible lifestyle bubble.  Just look around the world the way the other 99 percent live and its hard to say they US youngsters have it tough.

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#3) On September 13, 2009 at 5:43 PM, cthomas1017 (98.34) wrote:

I will establish my credibility on this subject stating my personal experience in helping the poor.  (It has been an active mission of mine for the last 10 years or so.)  I sat in a leadership role for a little over 2 years in one of the largest soup kitchen organizations in the country.  Two observations in my experience.

First, regardless of reality, too many people involved in leading these types of organizations invest themselves in growing the organization.  I was widely condemned after one meeting for asking if our measure of success was in how many meals we served or in how many people we helped not to need one of our meals.  (This was after the organization had published an almost gleeful press release that we had increased the number of meals served over the previous year by almost 6%.  This was around the turn of the century, so no need to use my anecdote to reinforce those in the original post above.) 

Second, the overwhelming majority of those using soup kitchens have exausted every other safety net available to them - especially families and friends.  Those safety nets would have been there had these individuals not been violent nor been thrown out because they were making choices that disrupted their friends or families' lives.  (crime, drug abuse, prostitution, etc.)  In my experience, probably 15-25% of those we served had mental/psychological issues that prevennted them from having any chance of entering the mainstream of society.  (That safety net was obliterated in the 70's & 80's - and not by mean spirited conservatives either.)

I guess my point is that using anecdotal evidence or the claims of those in a position of benefiting from claiming that their "clientele" has grown significantly should be taken with a grain of salt.  The bulk of people who have lost their jobs (and subsequently government subsedies) are leaning on family and friends and neighbors and churches right now - not heading to shelters and kitchens.  I admit that as the economy worsens, there will be a heavier burden placed on the charitable groups.  (I have heard that our monetary donations are down about 20% year-to-date, even though our largest summer fund raiser set records.  Material donations are up, but no where close to offset the massive reduction in money coming in.)

Using any charitable organization as a measure for the state of the economy is massively.  The bulk of the unemployed get help from their personal safety net and I attribute that to the goodness of the American spirit and how we step forward to help in the time of need.  That doesn't negate that we have a growing problem with people falling into a lower socio-economic class.  I expect the next 18 months to be even more challenging.  I'd even appeal to anyone reading this to get involved.  Even if you don't have funds to donate, your time can be so helpful!  (Please, don't just show up at Thanksgiving and Xmas.  That's the time we need people the least, especially those who;ve never worked the system before.)

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#4) On September 13, 2009 at 6:40 PM, alexxlea (60.77) wrote:

You list prostitution as disruptive to society, I find it hard to believe that you would find them to be the true perpetrators of the crime in this situation, and not the other members of society for actively serving as the market for such desperate actions. If that is how they force money out of people's pockets to survive, then it is on society's head, not the prostitutes. This is just the opinion of myself. We could extend the analogy to anyone who is forced to seemingly illegal means to procure incomes. There are markets for those activities only because there are so many participants willing to skirt the law to achieve one thing or another. If people are given the choice between a job to sustain oneself and a life of "crime" then that is usually not a hard choice. Sorry to throw this off topic reply in here. Human societies are almost by definition flawed to the point of no redemption when viewed by outsiders.

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