“Occupy Wall Street” and the Struggling Middle Class

Here are some articles that I found on the struggling middle class. Illustrating this blog are more photos I took of Occupy San Jose last week.

Tim Mullaney wrote on the October 20, 2011 edition of USA Today

In the cold, hard world of statistics, economists say demonstrators’ grievances are on the mark. At bottom, the protests are about how American middle-class life is undermined by four decades of near-stagnant wages for middle-income workers and a recession that has brought an unprecedented level of long-term unemployment. Throw in the exploding inflation in two of the most common expectations of middle-class life, health insurance and college — and a double-digit percentage decline in wages of young college graduates in the last decade — and the root causes of New York’s Zuccotti Park become clear.

“These people are not just protesting for the hell of it,” said Allen Sinai, chief economist at Decision Economics in New York, which consults for banks and hedge funds. “A lot of people don’t have purple hair, but underneath, they feel what these people are saying. The middle class is under tremendous pressure.”

Data on incomes, health insurance and employment show mainstream standards of living have been stagnant since the 1970s, with upward blips during expansions wiped out in downturns, after steady growth before 1973. The downturn since 2007 has made things worse.

Adjusted for inflation, median household income has fallen nearly 10% since December 2007, including a 6.7% drop since the recovery began in mid-2009, according to a study by Sentier Research in Annapolis, Md. The inflation-adjusted median income of wage- and salary-earning workers is $5 a week lower than in early 1979, according to the U.S. Bureau of Labor Statistics.

…Access to health insurance has deteriorated for years. The average worker contribution to employer-sponsored coverage has nearly doubled since 1999, rising from $1,548, or $2,068 in today’s dollars, to $4,128 this year for a family policy, according to the Kaiser Family Foundation. That’s enough to wipe out millions of middle-class raises. The number of uninsured Americans has risen 15% to more than 50 million since 2004, the foundation says.

The percentage of unemployed people out of work for six months or longer in this downturn has been the highest since records have been kept, dating to World War II. Including people involuntarily working part time or who have given up looking and aren’t counted as unemployed, 16.5% of workers are unemployed or underemployed, the government says.

Edward Luce wrote for the July 30, 2010 edition of the Financial Times:

The slow economic strangulation of the Freemans and millions of other middle-class Americans started long before the Great Recession, which merely exacerbated the “personal recession” that ordinary Americans had been suffering for years. Dubbed “median wage stagnation” by economists, the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973 – having risen by only 10 per cent in real terms over the past 37 years. That means most Americans have been treading water for more than a generation. Over the same period the incomes of the top 1 per cent have tripled. In 1973, chief executives were on average paid 26 times the median income. Now the ­multiple is above 300.

The trend has only been getting stronger. Most economists see the Great Stagnation as a structural problem – meaning it is immune to the business cycle. In the last expansion, which started in January 2002 and ended in December 2007, the median US household income dropped by $2,000 – the first ever instance where most Americans were worse off at the end of a cycle than at the start. Worse is that the long era of stagnating incomes has been accompanied by something profoundly un-American: declining income mobility.

…Combine those two deep-seated trends with a third – steeply rising inequality – and you get the slow-burning ­crisis of American capitalism. It is one thing to suffer ­grinding income stagnation. It is another to realise that you have a ­diminishing likelihood of escaping it – particularly when the fortunate few living across the proverbial tracks seem more pampered each time you catch a glimpse. “Who killed the ­American Dream?” say the banners at leftwing protest marches. “Take America back,” shout the rightwing Tea Party demonstrators.

Robert Pear wrote for the October 9, 2011 edition of the New York Times:

The full 9.8 percent drop in income from the start of the recession to this June — the most recent month in the study — appears to be the largest in several decades, according to other Census Bureau data. Gordon W. Green Jr., who wrote the report with John F. Coder, called the decline “a significant reduction in the American standard of living.”

That reduction occurred even though the unemployment rate fell slightly, to 9.2 percent in June compared with 9.5 percent two years earlier. Two main forces appear to have held down pay: the number of people outside the labor force — neither working nor looking for work — has risen; and the hourly pay of employed people has failed to keep pace with inflation, as the prices of oil products and many foods have jumped.

During the recession itself, by contrast, wage gains outpaced inflation.

One reason pay has stagnated is that many people who lost their jobs in the recession — and remained out of work for months — have taken pay cuts in order to be hired again. In a separate study, Henry S. Farber, an economics professor at Princeton, found that people who lost jobs in the recession and later found work again made an average of 17.5 percent less than they had in their old jobs.

“As a labor economist, I do not think the recession has ended,” Mr. Farber said. “Job losers are having more trouble than ever before finding full-time jobs.”

Mr. Farber added that this downturn was “fundamentally different” from most previous ones. Historically, other economists say, financial crises and debt-caused bubbles have led to deeper, more protracted downturns.

Ron Scherer wrote on the October 24, 2011 edition of The Christian Science Monitor

Think life is not as good as it used to be, at least in terms of your wallet? You’d be right about that. The standard of living for Americans has fallen longer and more steeply over the past three years than at any time since the US government began recording it five decades ago.

Bottom line: The average individual now has $1,315 less in disposable income than he or she did three years ago at the onset of the Great Recession – even though the recession ended, technically speaking, in mid-2009. That means less money to spend at the spa or the movies, less for vacations, new carpeting for the house, or dinner at a restaurant.

In short, it means a less vibrant economy, with more Americans spending primarily on necessities. The diminished standard of living, moreover, is squeezing the middle class, whose restlessness and discontent are evident in grass-roots movements such as the tea party and “Occupy Wall Street” and who may take out their frustrations on incumbent politicians in next year’s election.

…To be sure, the recession has hit unevenly, with lower-skilled and less-educated Americans feeling the pinch the most, says Mark Zandi, chief economist for Moody’s Economy.com based in West Chester, Pa. Many found their jobs gone for good as companies moved production offshore or bought equipment that replaced manpower.

“The pace of change has been incredibly rapid and incredibly tough on the less educated,” says Mr. Zandi, who calls this period the most difficult for American households since the 1930s. “If you don’t have the education and you don’t have the right skills, then you are getting creamed.”

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About angelolopez

I’ve wanted to be an artist all my life. Since I was a child I’ve drawn on any scrap of paper I could get a hold of. When I went to San Jose State University, I became more exposed to the works of the great fine artists and illustrators. My college paintings were heavily influenced by the humorous illustrations of Peter De Seve, an illustrator for the New Yorker magazine. I also fell under the spell of the great muralists of the 1930s, especially Thomas Hart Benton and Diego Rivera. I graduated with a degree in Illustration. Since my time in college, my goal has been to be a successful children’s book illustrator. I’ve illustrated 3 books: Two Moms the Zark and Me by Johnny Valentine in 1993; Night Travelers by Sue Hill in 1994; and Cherubic Children’s New Classic Story Book Volume 2 for Cherubic Press in 1998. I’ve painted murals for Lester Shields Elementary School in San Jose, the Berryessa branch of the San Jose Public Library, and Grace Community Church in Los Altos. I’ve had a few illustrations published in South Bay Accent Magazine and I will have an illustration published in the January/February issue of Tikkun magazine.
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One Response to “Occupy Wall Street” and the Struggling Middle Class

  1. Luigi Fulk says:

    Nice blog! Thank you for sharing!

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