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The big news this week: unemployment dropped to 8.9% and 192,000 jobs were added in February.
Great news, right?
Not so fast.
A closer reveals that nearly all the jobs added were in the $9-12/hour sectors, while the addition of higher-paying jobs in the $20-30/hour sectors were nowhere to be found.
Will the new emerging "middle-class" working at such starvation wages in the face of $4/gallon gas and $4/loaf of bread cause the dollar to crash or will the dollar manage to adapt to these new realities as our standard of living slips to third world status?
The big news this week: unemployment dropped to 8.9% and 192,000 jobs were added in February.
Great news, right?
Not so fast.
A closer reveals that nearly all the jobs added were in the $9-12/hour sectors, while the addition of higher-paying jobs in the $20-30/hour sectors were nowhere to be found.
Will the new emerging "middle-class" working at such starvation wages in the face of $4/gallon gas and $4/loaf of bread cause the dollar to crash or will the dollar manage to adapt to these new realities as our standard of living slips to third world status?
You need to ask the BHO regime...they have all the answers.
I don't know that lower wages will sink the dollar, but it stands to reason that lower-paying jobs replacing higher-paying jobs isn't good for the people getting those jobs.
The NY Times had an article about a recent report from the National Employment Law Project. From that article:
Lower-wage industries (those paying $9.03 -$12.91 per hour) accounted for just 23 percent of job losses, but fully 49 percent of recent growth.
Midwage industries ($12.92 -$19.04 per hour) accounted for 36 percent of job losses, and 37 percent of recent growth.
Higher-wage industries ($19.05 -$31.40 per hour) accounted for 40 percent of job loss, but only 14 percent of recent growth.
I don't know that lower wages will sink the dollar, but it stands to reason that lower-paying jobs replacing higher-paying jobs isn't good for the people getting those jobs.
The NY Times had an article about a recent report from the National Employment Law Project. From that article:
Lower-wage industries (those paying $9.03 -$12.91 per hour) accounted for just 23 percent of job losses, but fully 49 percent of recent growth.
Midwage industries ($12.92 -$19.04 per hour) accounted for 36 percent of job losses, and 37 percent of recent growth.
Higher-wage industries ($19.05 -$31.40 per hour) accounted for 40 percent of job loss, but only 14 percent of recent growth.
The connection I see is this:
We have a (rounded) 15 TRILLION dollar debt. This has to be paid for with tax revenue. But if everyone is making only $10-12/hour there is no way to collect taxes from such a piddly income pool, hence the tax base to pay off this gargantuan debt shrinks to nearly nothing. Consequently, the Fed has to create dollars out of thin air to pay the country's bills, which leads to hyperinflation, which leads to the dollar crashing. But will the economy and the dollar eventually just adjust to this new revenue-less society where most of the county's citizens barely subsist just living hand-to-mouth?
I agree with some of the conservatives posting that the dropping of the wage will devalue the dollar. If anything, decreasing the wages for the masses would increase the value of the dollar if all other things remain constant.
However, the increase in cost of goods devalues a dollar. Each dollar then has less purchasing value.
The better question is, how long will the masses tolerate the replacement of high paying jobs with low paying ones? Basically they're being told by the upper class to take a massive pay cut, work longer hours etc. Thus resulting in the transferrence (or theft) of resources from the middle class to the upper class.
Well, the basic premise of my OP was: if 70% of Americans are working for $10/hr then where is the tax money going to come from?
Nobody seems to have an answer for this question.
Nobody will tell the Emperor he has no clothes on.
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