Five Ways American Workers Found Out Today That They’re Screwed

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Thursday, February 11, 2010 at 3:49 pm

It’s a rare day in America that the government, economists and members of the media establishment will come together and tell Americans that, actually, they’re all screwed. But since today is one of those days, let’s count the ways this recession has permanently altered the American economy for the worse.

1. The poor are far more unemployed than the rich.
It’s not enough that they make more money anymore — despite everything that economics might normally predict, those with higher incomes are less likely to be unemployed during this recession. A new study from Northeastern University shows that among the top 20 percent of households — those making more than $100,000 — the unemployment rate is about 3.5 percent. In the poorest 10 percent of American households — those making under $12,800 a year — the unemployment rate is 30.8 percent. No wonder all those AIG bankers were threatening to leave their jobs in the midst of the recession: For them, there never was one.

2. The jobs that used to exist aren’t coming back.
Economists predict that at least 25 percent of the 8.4 million jobs that have disappeared thus far won’t be coming back no matter how good the economy gets. In fact, with job creation expected to be, at best, 133,000 new jobs per month over the next year — and 100,000 new people entering the work force every month — it will take more than 20 years at this rate to replace all the jobs that were lost in the last two years.

3. Corporations now know exactly how much money they save by firing workers.
And although the employment figures show that the rich stayed employed and the lowest-wage workers — who do most of the productive work in the economy — did not, companies laid off so many lower-paid workers that they are more flush with cash than Scrooge McDuck — to the tune of $1.19 trillion. But since people who kept their jobs have been busting their humps to keep them, productivity rates went up during the recession — which means your corporate overlords know exactly how hard they can work you for how little pay without reducing output. Get used to busting that hump.

4. Job growth is already not meeting economists’ predictions anyway.
Despite economists’ already-less-than-rosy predictions about job growth, only 95,000 jobs were created last month. So, we’re already 38,000 jobs — or more than a month — behind the growth we’d need to make back the 8.4 million lost jobs in 20 years.

5. Even Republicans don’t pretend that living wages exist for many Americans.
Nearly one in eight Americans currently depends on food stamps, and many of those people are working Americans (including some members of the military). Half of the families enrolled in food stamps are working, though fully 90 percent of those receiving benefits are below the federal poverty line. Everyone from Sen. Richard Lugar (R-Ind.) to George W. Bush and his food stamp administrator Eric Bost to former Wisconsin governor and presidential candidate Tommy Thompson is a food stamp booster for the working poor — the people who make minimum wage but can’t make ends meet. But you can have a job in this country and still go hungry — and some people who acknowledge that think the best solution is just to give companies more tax breaks.

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ep3
Comment posted February 12, 2010 @ 11:08 am

articles like this don't help the poor either:

http://www.wlns.com/Global/story.asp?S=11973195

also, I really enjoy, as a poor working person, not having any rights or power on the job. If I disagree with my boss on anything, he just says leave, there are 20 people waiting to take your job.


wackydan
Comment posted February 12, 2010 @ 3:41 pm

The answer isn't to grow gov't. What a waste. If people that did not work in corporate finance or ran their own small business could comprehend the tax penalty that exists on companies, they might change their tune about the horrendous level of taxation on small businesses. The private sector certainly has stock holders to answer to, but private sector has proven time and time again that it can create more jobs, and faster than the federal gov't. – Wake up.

As for the ” rich” keeping their jobs… While the rates may be true let me ask you this… What has more impact on the economy? A 100k job being eliminated or a 20k job being eliminated? Think about that.


ttocsic
Comment posted February 12, 2010 @ 4:40 pm

>>What has more impact on the economy? A 100k job being eliminated or a 20k job being eliminated? Think about that<<

Oh, the precious economy!

More realistically, what's worse? A 100k job being lost or FIVE 20k jobs being lost? One family versus FIVE families?

I get it. People who make 100k are better than people making 20k.


wackydan
Comment posted February 12, 2010 @ 5:48 pm

You didn't inhale and think before you replied now did you?

Do you think the 20k job actually pays anything in federal taxes at the end of the year?

Five 20k jobs don't either, but one 100k job pays a nice chunk of taxes.

Like it or not, good paying jobs stimulate the economy, those 12k/20k jobs are barely taxed if at all and do little to stimulate anything.


gerard pawling
Comment posted February 12, 2010 @ 8:29 pm

This is an outrage!


Name
Comment posted February 12, 2010 @ 8:52 pm

Hold on. 25% of 8.4 million jobs = 2.1 million.
You say 133,000 jobs will be created EVERY MONTH. *IF* this trend continues each month… it would not take 20 years. It would take 2. Just. Two.

133,000 * 10 = 1.3 million. Hell, that's less than 2 years. I understand that 133k jobs won't be made every month, of course… but at least use some math when you write scare tactics.


Name
Comment posted February 12, 2010 @ 8:59 pm

Even 8.4 million jobs would only take a little over 5 years to replace.


jamesgottleber
Comment posted February 12, 2010 @ 9:18 pm

To the first Poster here: You didn't read what the article said. 133,000 jobs are created a month MINUS 100,000 new workers per month equals a net job growth rate of 33,000 per month. This equals about 396,000 NET new jobs a year. At this rate it will take 21 years to REPLACE all of the jobs lost over the few years.


RobertInSF
Comment posted February 14, 2010 @ 2:00 am

Wackydan: I am not sure I understand your point about the impact on the economy from losing one $100,000 job versus five $20,000 jobs.

You only clearly reference the tax basis for the impact on the economy. Perhaps we aren't using the same defition of economy, but 5 people buy 5 times the food, consumables, energy, etc, than 1. And that's of course, a generalization, but enough to show my point. Five households have more impact, in general, in spending than 1, especially at the pay rates you mention. There are 5 times the purchasing of goods and services that the paid-more person won't buy 5 of or 5 times the amount of, such as food, utilities, gasoline, clothes, books, etc.

I am not an economist, but to dismiss so casually the impact of 5 20k jobs as insignificant, and to attribute that to the fact that they pay little to no income tax comes off as, well, cynical and intellectually dishonest.


wackydan
Comment posted February 15, 2010 @ 9:46 pm

“I am not an economist, but to dismiss so casually the impact of 5 20k jobs as insignificant, and to attribute that to the fact that they pay little to no income tax comes off as, well, cynical and intellectually dishonest”

I'm willing to bet the 100k household as a percent of income also pays more in property tax. I'm also willing to bet that the 100k+ household consumes far less of gov't services like Medicaid and food stamps.

I agree that your math makes sense to a degree, but as you can see there is a lot of math that can be used to contrast those five 20k jobs to one 100k.


RobertInSF
Comment posted February 15, 2010 @ 10:20 pm

Again, you are focused on taxes (and now bringing in government services)…5 20k families (or single persons) are more likely renters, so the landlords or landladies also pay property tax, and perhaps business income tax.

And depending on the location of those 5 jobs, that income may be enough to afford a half-way decent standard of living, although not by much.

I don't have any stats on who and how much the average (and average may not be a good indicator, perhaps the mean with the standard deviation to get a picture of the spread) Medicaid and food-stamp recipient takes out of the system, but I don't believe that it's a factor. They lost their jobs, so now they are *also* taking unemployment and perhaps money from other government services such as job location or training.

So, once again the loss of 5 20k jobs may well outweigh the cost to the economy than the 100k.

Let's take into account savings as well. The 100K, if we assume rational thought, should have more in savings or liquid investments to rely on in case of losing a job, so their spending may not be curtailed as much as 5 people who lose 20K jobs. So again, more impact to the economy…less spending.

And btw, the government doesn't create jobs (except regulatory and support positions for the administration and congress), that's true. But they alter the tax system to free up money previously allocated to paying those taxes to spend on expanding existing businesses or freeing up “Starter” money starting businesses.

They also create programs that open up new areas of business creation by providing 1)incentives such as technology investment and 2) regulatory requirements that not only help our nation (for example environment or long term energy independence) but also open up new needs in industries to provide opportunities that businesses themselves would not create in an entirely free (read self-policed) market.

Of course, I want moderation in government taxes and spending, as I am sure you recognize that we need the government more than to administer the courts, guard the border and act as the military. So what *is* the appropriate spending that the government needs to do, to provide those services, and what taxes would you levy (or user fees, such as the FDA has for the pharm/medical device industry) to pay for it? Just curious….


wackydan
Comment posted February 16, 2010 @ 2:46 am

“I am not an economist, but to dismiss so casually the impact of 5 20k jobs as insignificant, and to attribute that to the fact that they pay little to no income tax comes off as, well, cynical and intellectually dishonest”

I'm willing to bet the 100k household as a percent of income also pays more in property tax. I'm also willing to bet that the 100k+ household consumes far less of gov't services like Medicaid and food stamps.

I agree that your math makes sense to a degree, but as you can see there is a lot of math that can be used to contrast those five 20k jobs to one 100k.


RobertInSF
Comment posted February 16, 2010 @ 3:20 am

Again, you are focused on taxes (and now bringing in government services)…5 20k families (or single persons) are more likely renters, so the landlords or landladies also pay property tax, and perhaps business income tax.

And depending on the location of those 5 jobs, that income may be enough to afford a half-way decent standard of living, although not by much.

I don't have any stats on who and how much the average (and average may not be a good indicator, perhaps the mean with the standard deviation to get a picture of the spread) Medicaid and food-stamp recipient takes out of the system, but I don't believe that it's a factor. They lost their jobs, so now they are *also* taking unemployment and perhaps money from other government services such as job location or training.

So, once again the loss of 5 20k jobs may well outweigh the cost to the economy than the 100k.

Let's take into account savings as well. The 100K, if we assume rational thought, should have more in savings or liquid investments to rely on in case of losing a job, so their spending may not be curtailed as much as 5 people who lose 20K jobs. So again, more impact to the economy…less spending.

And btw, the government doesn't create jobs (except regulatory and support positions for the administration and congress), that's true. But they alter the tax system to free up money previously allocated to paying those taxes to spend on expanding existing businesses or freeing up “Starter” money starting businesses.

They also create programs that open up new areas of business creation by providing 1)incentives such as technology investment and 2) regulatory requirements that not only help our nation (for example environment or long term energy independence) but also open up new needs in industries to provide opportunities that businesses themselves would not create in an entirely free (read self-policed) market.

Of course, I want moderation in government taxes and spending, as I am sure you recognize that we need the government more than to administer the courts, guard the border and act as the military. So what *is* the appropriate spending that the government needs to do, to provide those services, and what taxes would you levy (or user fees, such as the FDA has for the pharm/medical device industry) to pay for it? Just curious….


medical product development
Comment posted August 7, 2010 @ 9:41 am

yup, outrage. Why ? Cos we live in such a perfect system ?


Trode46
Comment posted August 13, 2010 @ 3:20 pm

Does anyone reailize that all this mess is a result of the “Free trade” trash that our politicians stuck the American workers with??
Think about it!! Companys are actually rewarded by the government for outsourcing jobs!! Ross Perot tried to tell the voters that they were committing suicide. Who listened? The government says “Get more educated and you will find work”. This too is bullshit! I personally know people who have a masters degree and cant find a job!! Education is NOT going to get you a job if there is no jobs!! Duh !!


medical device design
Comment posted September 12, 2010 @ 5:17 pm

You only clearly reference the tax basis for the impact on the economy. Perhaps we aren't using the same defition of economy, but 5 people buy 5 times the food, consumables, energy, etc, than 1. And that's of course, a generalization, but enough to show my point. Five households have more impact, in general, in spending than 1, especially at the pay rates you mention. There are 5 times the purchasing of goods and services that the paid-more person won't buy 5 of or 5 times the amount of, such as food, utilities, gasoline, clothes, books, etc.


Newbigtech
Comment posted December 17, 2010 @ 4:39 pm

It is time for a Constitutional Convention… We know the people we have that are running this country are no longer doing so for the people of the United States..
It is time to call a constitutional convention !


Ronjax54
Comment posted June 11, 2011 @ 10:16 am

Its not the poor are more unemployed then the rich, its the uneducated are unemployed then the educated


CarmanK
Comment posted June 11, 2011 @ 9:21 pm

But the rich guys are still employed according to the study and we can’t pay our bills as a nation. The rich are not overtaxed. Corporate taxes in the US are not greater than other civilize nations. And of course, with all the tax loopholes for corps, big and little, business pays a small portion of their income in taxes to support the nation. With all the clear evidence to the contrary, the republicans and others conveniently cling to proposing 18th century solutions to 21st century problems. We are not an agrarian society, people cant just retreat to the farm to make a living and grow the food. there are millions more people in this country than in the 18th century and they need jobs. In fact, govt can help grow the economy by rebuilding infrasture and investing in new technologies and research. It was the govt that funded the internet , it was govt scientists who wanted to communicate with each other who came up with the idea.  Take away oil subsidies and  fund infrastructure and alternative energies’ development. Take away the tax incentives to ship jobs overseas and companies will come home to roost. Stop the erosion of public sector jobs and maybe the NSA won’t waste another 1and 1/2 bn dollars on  failed communication projects. When other western societies tried to implement Adam Smith’s economic principles for a “society of perfect liberty” they came up with the same results: tax cuts for the rich did not grow jobs, smaller govt did not mean better services for less and and wealth flowed to the top supporting the conversion from democracy to plutocracy. There is 200 years of the historical evidence that the republican fiscal policies of today, failed their societies and  shrunk the middle class. The eveidence is there but for 30 years the republicans ignored those inconvenient truths because it interfered with their ideology and political goals. By the way, there are no examples in history where privatization of govt services ever proved beneficial to taxpayers.


Wtjg
Comment posted August 5, 2011 @ 4:21 pm

Don’t you understand that there are 100,000 new people entering the workforce ea. mo. therefore there is only 33,000 reduction of the unemployed ea. mo.  In 20 years at that rate you would reduce unemployment by 7.920,000. of course over 20 years a great many of these will be to old or have died.


Wtjg
Comment posted August 5, 2011 @ 4:26 pm

Read above, you have new people coming in ea. mo. They may be all new jobs but 100,000 are also new people.


Wtjg
Comment posted August 5, 2011 @ 4:30 pm

The same is tru in almost any job , even government or union jobs.
If you own a company, you make the final decision. If everyone got their way thie company would go out of business.


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