Frank Vernuccio 3/7/2017

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America’s Suffering and Neglected Middle Class

By Frank V. Vernuccio, Jr., J.D.


Frank V. Vernuccio, Jr., J.D., the editor-in-chief of the New York Analysis of Policy & Government, brings his 30 years of experience in government and professional writing and broadcast journalism to your audience. Vernuccio provides insights that captivate listeners.

The bad news for America’s middle class continues, as the real unemployment rate (the Bureau of Labor Statistics (BLS) U6 number) remains high at 10.5%, with long-term unemployment representing between a quarter and a third of all those without jobs. For those with jobs, salaries have not improved in relation to inflation rates.

While more federal dollars went to the poor, and the wealthy benefited from President Obama’s policies, (The Federal Reserve notes that during the Obama Administration, only the wealthiest 10% saw their median income rise during the 2010-2013 period) the middle class has suffered.

According to the Federal Reserve “Families in the middle to upper middle parts (between the 40th and 90th percentiles) of the income distribution saw little change in average real incomes between 2010 and 2013 and thus have failed to recover the losses experienced between 2007 and 2010. Only families at the very top of the income distribution saw widespread income gains between 2010 and 2013, although mean and median incomes were still below 2007 levels.

“Consistent with income trends and differential holdings of housing and corporate equities, families at the bottom of the income distribution saw continued substantial declines in real net worth between 2010 and 2013, while those in the top half saw, on average, modest gains. Ownership rates of housing and businesses fell substantially between 2010 and 2013. Retirement plan participation in 2013 continued on the downward trajectory observed between the 2007 and 2010 surveys for families in the bottom half of the income distribution. Participation rebounded slightly for upper-middle income families, but it did not move back to the levels observed in 2007.”

The National Employment Law Project notes that “Since employment hit bottom in February 2010 Employment growth during the early recovery was heavily concentrated in lower-wage industries and occupations…We find that low-wage job creation was not simply a characteristic of the first phase of the recovery, but rather a pattern that has persisted for more than four years now. Deep into the recovery, job growth is still heavily concentrated in lower-wage industries. As a result of unbalanced employment growth, the types of jobs available to unemployed workers, new labor market entrants, and individuals looking to move up the career ladder are distinctly different today than they were prior to the recession.

“There continues to be an imbalance between the industries where the recession’s job losses occurred and the industries experiencing the greatest growth four years into the recovery. Lower-wage industries accounted for 22 percent of job losses during the recession, but 44 percent of employment growth over the past four years. Today, lower-wage industries employ 1.85 million more workers than at the start of the recession. Mid-wage industries accounted for 37 percent of job losses, but 26 percent of recent employment growth. There are now 958,000 fewer jobs in mid-wage industries than at the start of the recession. Higher-wage industries accounted 41 percent of job losses, but 30 percent of recent employment growth. There are now 976,000 fewer jobs in higher-wage industries than at the start of the recession. Private sector employment growth over the current recovery is stronger than it was following the 2001 recession, but job growth is more concentrated in lower-wage industries.”

A Townhall review of the ongoing plight of the middle class states: “… middle class Americans are the backbone of the country; yet their interests always seem to take a backseat to those of the wealthy, the poor and the naked self-interest of BOTH political parties. There’s nothing wrong with giving the poor a hand-up or making sure that the rich are treated fairly, but looking after the interests of America’s middle class should be priority #1 for both parties. Instead of treating the interests of the middle class as a star for both parties to follow to take this country into the future, they’ve been getting screwed over. How?

“Obamacare: Millions of middle class small business owners have already lost their insurance and tens of millions of Americans will lose their insurance because of the employer mandate. However, the most devastating lie to the middle class was Obama’s false claim that the ACA would save the average family of four $2,500 a year in premiums. Instead, premiums skyrocketed by as much as 78% for some groups and there were “$643 billion in new taxes, penalties and fees” to cover the $50,000 a head it’s costing Americans to pay for each person who gets on Obamacare. …

“Soaring College Prices: Even though median household income has declined ACROSS THE BOARD for Americans in all income groups since 2000, the price of a college education rose at 7.45% per year from 1978 to 2011…

“Trade policies: a lot of jobs that had to be done locally have moved overseas…as a nation that has embraced free trade policies, we’ve been far too reluctant to throw our weight around to ensure that markets are opened to American products… We don’t make radios and TVs here anymore. No cell phones are made here. Over 42,000 factories have closed since 2001. The villain isn’t free trade so much as politicians who aren’t willing to DEMAND that other countries give our businesses staffed by middle class workers the same opportunity to sell our products overseas as we give other nations.

“Immigration and Illegal Immigration: Illegal immigration mainly hurts poor Americans … However, there are also middle class Americans losing jobs and seeing their wages driven down because they have to compete with foreigners who don’t have the same expenses they do because they’re above the law…Government data show that since 2000 all of the net gain in the number of working-age (16 to 65) people holding a job has gone to immigrants (legal and illegal). This is remarkable given that native-born Americans accounted for two-thirds of the growth in the total working-age population. Though there has been some recovery from the Great Recession, there were still fewer working-age natives holding a job in the first quarter of 2014 than in 2000, while the number of immigrants with a job was 5.7 million above the 2000 level.

“The Debt: … The more money the Fed prints, the more inflation we’re going to ultimately have. The more inflation we have, the less the money that middle class Americans have saved over a lifetime is going to be worth.”

A CNN Money study confirms this. “Workers are taking home their smallest slice of U.S. income on record…That means the richest 1% of American families have captured 95% of the income gains in the recovery, according to economists at the forefront of income inequality research, Thomas Piketty and Emmanuel Saez. The job market still faces a gaping hole… The poverty rate has barely budged during Obama’s presidency, marking the first time it has remained at or above 15% for three consecutive years since 1965….Record number of Americans are on food stamps. Amid the recession, the food stamp rolls surged, and as of 2013, 48 million Americans were receiving the benefits — the highest number since the program began in 1969…The manufacturing revival was a mirage: manufacturers … are operating with a U.S. workforce that’s a small fraction of the size it was two decades ago.”

The programs and benefits provided to the poor continue to be favored by politicians who see them as an effective method to secure their loyalty in upcoming elections. The wealthy use influence, connections, and contributions to enhance their position. The middle class, the backbone of the nation, continues to suffer

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