Excellent news. Expect whole swathes of the American 'middle class' to wake up and realise that they're wage slaves like the rest of us.
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Middle-class families in worse shape than ever, study finds
Typical families have not stashed enough money; struggling to pay for home, insurance, and education according to Center for American Progress.
September 28 2006: 4:41 PM EDT
WASHINGTON (Reuters) -- The typical double-income family is worse off financially than ever, a study released Thursday said, warning that few Americans have saved enough to brace for financial setbacks.
Middle-class families are struggling to pay for a home, health insurance, transportation and their children's college with wages that have not kept pace with higher prices, according to the study by a think tank headed by a former top aide to President Bill Clinton.
The middle class's financial condition has been a key issue ahead of the November elections, as Democrats warn that this group is fast losing economic ground amid skyrocketing prices and tax cuts that offer them little benefit.
"In our estimates, it's becoming harder for families to afford what we consider a typical middle-class lifestyle," said economist Christian Weller of the Center for American Progress, the political think tank headed by John Podesta, a former Clinton chief of staff.
Weller cautioned that while Americans are taking on more debt to cover higher costs, wages have not kept pace.
The majority of Americans have not socked away enough money to brace for financial setbacks such as a job loss or a medical emergency.
According to the study, less than a third of all American families have accumulated income equaling three months of their wages. The trend is particularly pronounced among the 60 percent income distribution that makes up the middle class: those with dual incomes earning from $18,500 to $88,030 a year.
From 2001 to 2004, the proportion of middle-class families that has saved three months' worth of income dropped to 18.3 percent from 28.8 percent, the study said.
Higher prices for a range of things - including health care, energy, transportation, food and education - have put Americans in this position as corporate profits have risen, the study said.
It said, that five years into the current economic recovery, average job growth is one-fifth that of previous business cycles and wages are flat when inflation is factored into the equation.
To maintain day-to-day consumption, families have taken on a record amount of debt, equal to 126.4 percent of disposable income in the first quarter of 2006, according to the study.
Commenting on the study, SEIU Labor Union President Andy Stern said, "Of the total amount of our economy and income, we have the greatest share going to profits in modern history and the least amount going to wages in modern history."
"For most working Americans, things are far worse than any time certainly in recent history and at a time of an incredibly growing economy." said Stern, whose union represents 1.1 million health care workers.
Health care industry leader Abbott Laboratories Inc. (Charts), Johnson & Johnson (Charts), and Guidant Corp. (Charts) edged higher late Thurday in New York.
Excellent news. Expect whole swathes of the American 'middle class' to wake up and realise that they're wage slaves like the rest of us.
"Events have their own logic, even when human beings do not." - Rosa Luxemburg
"There are decades when nothing happens; and there are weeks when decades happen." - Lenin
Yeah, there's major historical precedent for that.
'heavens above, how awful it is to live outside the law - one is always expecting what one rightly deserves.'
petronius, the satyricon
Was that sarcastic? There is some historical evidence for that, to a certain degree it happened during the Depression. The difference is that today reform of the system is too expensive for the capitalist class and nearly impossible to implement, so theres nothing to save the middle class this time around. As Marx predicted, the first world is on the path towards a stark differentiation of society into two distinct classes.
<span style=\'color:red\'>"Men make their own history, but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly encountered, given and transmitted from the past."
-Karl Marx, The Eighteenth Brumaire of Louis Napoleon (1852)</span>
<span style=\'color:blue\'>"When people speak of ideas that revolutionize society, they do but express the fact that within the old society, the elements of a new one have been created."
-Karl Marx, The Communist Manifesto</span>
Industrial Workers of the World | Radio Rebelde!
Furthermore we have the current massive imbalance between debt and savings. Traditionally, savings have been the backbone of the middle classes and insulated them against the privations of recession. But a major recession today would blow away many middle class families which are already up to their necks in debt.
Besides, it's always bad news for the legitimacy of capitalism when the livelihoods of even the middle classes cannot be guaranteed.
"Events have their own logic, even when human beings do not." - Rosa Luxemburg
"There are decades when nothing happens; and there are weeks when decades happen." - Lenin
You mean the Depression when fascism swept Europe, crushing what were actually fairly strong proletarian movements? Yeah, I'm sure the US, where organized proletarians are almost non-existant, would quickly descend into class consciousness and not nationalist race-baiting... Oh, wait.
'heavens above, how awful it is to live outside the law - one is always expecting what one rightly deserves.'
petronius, the satyricon
Your points are completely valid, but much of that fascist reaction occurred because conservatives and business interests saw the threat of a radicalizing proletariat. I agree with your point about nationalist race-baiting, although I would contend its already starting to happen with calls for protectionism and the anti-immigrant groups. My point was that a solution for the bourgeoisie isnt as apparent now as it was back then. An FDR-type or even a fascist corporatist-type leader is less likely to emerge unless the United States completely subverts the international economic measures it has been the primary creator of through international groups like the IMF and WTO. So what I'm saying is that over the long term I think this is merely the formative stages of what Marx referred to as the destruction of the middle-class.
<span style=\'color:red\'>"Men make their own history, but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly encountered, given and transmitted from the past."
-Karl Marx, The Eighteenth Brumaire of Louis Napoleon (1852)</span>
<span style=\'color:blue\'>"When people speak of ideas that revolutionize society, they do but express the fact that within the old society, the elements of a new one have been created."
-Karl Marx, The Communist Manifesto</span>
Industrial Workers of the World | Radio Rebelde!
