The epic crisis in retirement savings: Vast majority of Americans unprepared for retirement. Median retirement savings for those 25 to 34? Zero dollars.
If actions are a method of gauging interests Americans have little desire or ability to prepare for retirement. In fact, the amount of money saved for retirement is absolutely shocking on the low side. When you mention that the American per capita wage is $26,000 people seem shocked. This figure doesn’t coincide with the spend happy media’s perception of the American family. Even after the lows of the recession, much of the employment recovery has come via low wage jobs and cutting back pay. Saving money can only be accomplished if people have enough left over each month after necessities are taken care of. Many financial blogs seem to speak to a small portion of society and fully ignore the overarching data. For example, the median retirement savings amount for those 25 to 34 is $0. That is right, the majority of young Americans don’t even have a penny saved to their name. Do not think that as you move up the scale that things get all that better. We have an epic crisis when it comes to saving for retirement.
Let us count the ways of inflation: While the CPI understates inflation Americans are living out the days of a contracting standard of living.
Americans are experiencing the impacts of inflationary pressures on their pocketbooks. The Consumer Price Index (CPI) used by the Bureau of Labor and Statistics does a poor job of measuring inflation because it uses derivative measures to reflect the price of things we can readily get. The most obvious example is the measure used to value homes. The CPI missed the first housing bubble and is now missing the rampant rise in home prices again. Why? The CPI uses a measure called owners’ equivalent of rent (OER) which is a hypothetical measure of what you would get if you rented out your house. Yet as we know in many expensive markets, someone may rent a home for $1,500 but the full carrying cost of owning the place may be $2,000 or more even after tax advantages are considered. The bottom line is the Federal Reserve has pointed to the CPI as sufficient reason to continue using Quantitative Easing even though we are seeing large banks and hedge funds flooding the housing market. No inflation? Let us count the ways.
The scam of unpaid internships: How companies exploit free labor from students under the guise of unpaid internships.
Many people have taken on internships that were unpaid merely to learn some transferable skill or to build a solid network. This was okay in a time when graduating students had little debt and higher education was more affordable. Today some companies have used interns as a source of free labor without adding any benefits for the interns. It is interesting that in the last year there has been a growing movement against unpaid internships. It is bad enough young Americans are underpaid so why add insult to injury and have them “work†for free? Most internships require students to receive some sort of takeaway that may include gaining new job skills or learning a new trade. However, as has been the case many times over, many students are used as errand runners fetching coffee or other menial tasks. This isn’t to say that all unpaid internships are bad or don’t serve a purpose. However, the Black Swan ruling is showing an underlying trend of problems with our unpaid internship system.
Suppressing wages and increasing corporate profits: The tough math behind the current economic recovery.
It should come as no surprise that the stock market is a very poor barometer on the financial health of Americans. We think of the stock market as a temperature gauge on how well Americans are doing. If that is the case, the record breaking highs in the stock market should reflect a very happy and well off economy. That unfortunately is not the case. There has been a deep structural shift in the last decade which only accelerated since the recession engulfed the nation. Corporations have increased profits largely by chopping wages and other compensation to employees. This is part of a global low wage trend that is now fully rolling over the United States. New data reflects this deeper morphing of our economy and also explains why many working and middle class Americans are finding it harder to keep up with the changing winds of the economy. Suppressed wages, higher corporate profits, and less compensation. What you would like to see is profits trickling down into the pocket books of Americans yet that is not the case.