Census data shows a record 46.7 million Americans live in poverty. Over 40,000 dollar stores now permeate the United States.
Census data is always released in September for the previous year. As far as comprehensive data goes the Census is one of the best measures that we have. The latest Census figures merely reflect an economy that is crushing the American Dream. It also helps to highlight why so many people have profound doubts regarding this so-called recovery. The latest Census figures show that a record number of Americans now live in poverty. The total number of Americans living in poverty is 46.7 million. We also have a large number of Americans working in low-wage jobs and being perilously close to being in poverty. This is not what people have in mind when we talk about a recovery. The problem, of course, is the financialization of the system where a massive bull run in stocks simply went to consolidated wealth into fewer hands. Big banks got bigger while household income reverted back to where it was in 1989.
How subprime loans keep the bubble going: Subprime auto loans continue to grow as credit worthy customers drop out of the market.
Low interest rates create an environment that encourages debt based spending. In regards to monetary policy, this is how you grease the wheels to get the economic engine spinning. As part of your financial arsenal this can be used in moderation but the Fed has been using maximum credit leverage since the economy imploded and this short-term fix is now running into its seventh year. The outcomes are expected with inflation running rampant in credit heavy items like housing, cars, and college tuition. But with housing, big banks and investors have crowded out regular buyers thus pushing the homeownership rate lower. So credit based spending has been in full effect with auto loans and student debt. As many credit worthy Americans were deep in debt, the temptation to go into subprime loans has accelerated dramatically. Subprime auto debt is running rampant. Student debt is now the most delinquent debt class in America. Subprime debt is once again super charging the debt fueled market.
The American Dream deferred: Looking at the 4 horsemen of middle class destruction. Student debt, household income, low wage jobs, and FIRE economy dominance.
The angst that is being manifested in the political arena is largely being brought on by economic uncertainty. There is a general underlying anxiety of living in a United States with a weakened and invisible middle class. We are heading directly into that scenario with both eyes fully wide open. Many of the new jobs added since the Great Recession ended have come in the form of low wage employment. Low wage jobs are largely made up by lower wages of course but also, a lack of employment security and rising healthcare costs are forcing families to shoulder a larger financial burden as employers shift costs directly onto them. The problem with rising costs is reflected by stagnant income growth for households. Adjusting for inflation, American families are making what they did in the 1980s. Our young workers looking for better opportunities go to college but then leave with an insurmountable level of student loans. This debt burden delays household formation and puts a clamp on consumer spending. Finally, it would seem for the last couple of decades, the only segment of the economy thriving is that of the financial and banking sector. In other words, the American Dream that once rewarded hard work in mass is becoming a mere mirage in the midst of crony capitalism and financial speculation.
Record shattering 94 Million Americans not in the labor force: The army of non-working Americans continues to grow.
The employment numbers released a few days ago left much to be desired right before entering into the nationally celebrated Labor Day holiday. Not many people can enjoy the “labor†part of the holiday since those not in the labor force has hit another stunning record. The latest gloomy figures show that 94 million Americans are not in the labor force. This category added a stunning 261,000 people while overall jobs added came in at a lackluster 173k. When we dig into the employment figures we find that many of the jobs being added are also coming in the form of low wage jobs. The market is coming to the grim realization that something is fishy with how the employment figures are reported. We supposedly have the lowest unemployment rate in seven years yet somehow we now have 94 million Americans not in the labor force with hundreds of thousands of people dropping out each month. Those finding work are largely in McJobs with low pay, no benefits, and job security that resembles the lifespan of a fly. The army of non-working Americans continues to grow.