Get used to the idea that you will never retire: GAO report shows that half of Americans 55 and older have no retirement savings at all.
Some of you might remember the glossy highly produced advertisements back in the early 1980s when Wall Street decided it was time to turn American retirement plans into casinos. The slow and agonizing death of the pension plan was supposed to be replaced by the beautiful and wonderful world of the 401(k) plan. Save for 30 years and in the end, you will be a millionaire just like your friends on Wall Street that sincerely care about your financial future. Of course since then, we have found out about junk bond scandals, mutual fund fees that make loan sharks look conservative, and of course the financial shenanigans of giving people toxic mortgages that were essentially ticking time bombs of destruction. This was the industry that was put in charge of helping you plan for your future. We are now a generation out from those slick ads and the results have been disastrous for most Americans. A recent analysis found that half of US households 55 and older have no money stashed away for retirement.
The Average Net Worth by Age: The massive financial chicanery brought on by housing equity figures and the new real estate bubble.
The best indicator of wealth is your net worth. Take you assets and subtract out your liabilities. It should come as no surprise to most Americans that half of this country is living paycheck to paycheck. One third of Americans have zero dollars for their net worth or in many cases for young Americans, have a negative net worth thanks to mountains of student loan debt. The latest data from the Census and Federal Reserve show skewed views on net worth figures. First, the recent housing bubble led by investor money buying single family homes isn’t really helping most Americans. In fact, the home ownership rate has fallen for about a decade now. Investors are thrilled as they leverage cheap funds to boost their own net worth but the main driver of net worth building, housing, is now being held by fewer Americans. The bull market with stocks has also pushed wealth figures up but it should be noted that only half of Americans actually own any stocks outright. Let us look at net worth figures by age ranges.
Trends in low wage America: 1.4 million waiter/bartender jobs gained while 1.4 million manufacturing jobs lost since 2007. Top 4 employment sectors pay $10 an hour or less.
The media pundits are scratching their heads as to why two political outsiders are garnering all the attention. You want to know why? Both are addressing the low wage epidemic plaguing the country. Now we can debate their policies since both stand at the extreme opposite ends of the spectrum but their message is clear – the reason you are going broke is because of the way things are and the deep capture of the financial status quo. And when we look at data, the trend is unmistakable. For example, since 2007 we have lost 1.4 million manufacturing jobs. During this same period, we have added 1.4 million waiter/bartender jobs. It is really no surprise that our top 4 employment sectors in the US pay $10 an hour or less. Keep in mind that with talks of the minimum wage being pushed up to $15 an hour, all of these employment sectors will be impacted. We are still seeing a dramatic growth in low wage jobs across this country. It also doesn’t help that true inflation is hitting people directly in their slimmed down wallets.
1 out of 3 American workers support the rest of the country: Those not in the labor force surges to another record at 93,770,000.
The latest employment figures did not help the market. While the unemployment rate remained unchanged this is largely being driven by the massive number of Americans not in the labor force. This is the biggest employment story going on for a couple of years but is completely ignored by the media. It is also conveniently ignored by the unemployment rate that only measures those “in the labor force†which is a very generous range. A large part of the not in the labor force group has come from people simply being unable to find work in this low wage economy. And then the media acts shocked that people like Trump and Bernie Sanders are gaining traction. The media would like to continue to paint a Pollyanna case of the economy but that is just not the truth. We recently hit a record 93,770,000 Americans that are no longer in the labor force. 1 out of 3 Americans are not in the labor force while 1 out of 3 workers are supporting the rest of the country.