This guest entry is courtesy of our good friend Oliver. The sources of his information are here and here. Are we ready to say good-bye to the middle class? If trends continue the way they are going, then we don’t need the Magic 8 Ball to tell us that all signs point to yes. Thanks to Oliver as always!
Get ready to erase the “middle class” from our history. Here are some sobering facts:
- Middle-income jobs are disappearing from the economy. The share of middle-income jobs in the United States has fallen from 52% in 1980 to 42% in 2010.
- Middle-income jobs have been replaced by low-income jobs, which now make up 41% of total employment.
- 17 million Americans with college degrees are doing jobs that require less than the skill levels associated with a bachelor’s degree.
Someone commented, “I believe we are on the way to being managed instead of represented by our government.” While the government has picked up some slack, its help obviously comes with strings attached. Food programs, housing, and other forms of assistance require the receiver to behave in accordance with the program.
“The American Dream is now to get out of debt” – David Rosenberg, Chief Economist & Strategist, Gluskin Sheff
- Debt stands at 108.4% of income–it is the first time since the Federal Reserve started conducting this survey that it has been this high!
- Ask your self where the middle class stores most of its equity. The answer: their homes.
- New data just out from Zillow, the real-estate information company, show housing prices are falling at their fastest rate since the Lehman collapse.
- Average home prices are down 8% from a year ago, 3% over the quarter, and are falling at about 1% every month, according to Zillow.
- The percentage of homeowners in negative-equity positions–with a home worth less than its mortgage–has rocketed to 28%, a new crisis high.
This all leads up to a new term that we should help promote “screwflation.” “Screwflation,” a term coined by Wall Street guru Doug Kass, describes how falling wages and rising costs of basic goods are squeezing the middle class.