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??? When you're living on or near minimum wage, you probably can't afford a car, which means you probably can't afford to live in the country. Recently I found a Brookings paper about worker cost tradeoffs between housing (i.e. rent) and transportation (commuting). This has long been an interest of mine, as for some years I have entertained the notion that the lower working class is slowly being squeezed between unaffordable housing (which drives them to seek cheaper rents further away from their jobs) and the costs of longer commutes.
Turns out, according to Brookings, that this tradeoff generally does not succeed for low-wage workers because the increased commuting costs exceed the rent reductions achieved by moving further away from their jobs. For those without cars. commuting to work from a rural home generally isn't even an option.
75% of those in poverty have 1 vehicle.
33% of those in poverty have 2 vehicles.
Where on earth do you get these numbers? According to the BLS (2012 numbers), only 3% of employed persons make minimum wage nationwide.
You are correct, only about 3% of employed persons make the federal minimum wage. Roughly half of all Americans live in states that have a higher minimum wage, so I am estimating an additional 2%-3% earn their higher state minimum wage.
Fast food workers would never have asked for $15/hr wages if they were still high school kids - this was made possible only because the number of adults trying to live on fast food wages has reached critical mass.
And you bring up this "people who make $8 an hour" thing like it's half the country. Among all full time hourly and salary workers, according the Bureau of Labor Statistics, less than 2% earn at or below the minimum wage, and the largest percentage by age is teenagers, and by profession is leisure/hospitality, where tips supplement the hourly wage. And the median income (as of 2011) of the country is $50,200, so says the Census Bureau.
Not only should a person making $8 hourly not own a home, they aren't really that much of the population. So why are they constantly referenced by you as if the entire economy and home buying market depends on them?
I love how so many people use the 50K median income as if it was the personal median income. Its not-that is the median income for a family. This could mean mom and dad working, or mom, dad, and grandma's social security,etc. Its not a realistic number.
The ACTUAL number is 24,062 in 2005 (28,715 today). I don't have a good number for today, but lets use that one.
The quote that 2% make minimum wage or less completely ignores the fact that making .05 more then minimum wage is still pretty bad. But hey after 3 months there, a lot of jobs give you a token raise.
Anyways....the original question about why the middle class is disappearing is this:
We've moved more and more of the income and wealth to the top quintile. By doing so we squeeze the other quintiles.
Now the bottom quintile gets squeezed so much it requires government help. This leads to a fascinating thing-the lower classes get assistance, making the difference between lower and middle class even smaller.
For example-my ex when she had the kids got housing assistance worth 1K/month, food stamps $260, and the kids got free lunch at school-about $200/mo, and $600 in social security. Thats $2,060 a month in income. By contrast at the time I got custody I made 3/K a month...and as a result got NO assistance. I then lost about 500/mo in taxes. With kids and me working I needed something she didnt-I needed childcare, that was 600/mo. (these are all off the top of my head-this was a decade ago) Sooo despite working, was WORSE off then she was. What would be the point of working? Right? I made the decision to work hard to get out of the lower middle class, and go for a solid middle class, or upper middle class. I did that....but many people just cant do that.
Thats where the middle class is going, we devastate it by making it unprofitable. We make the lower class more attractive, and as we've reduced the ability to move upwards at the same time...welllll thats where the middle class went.
Its why I am against means testing programs. I think if we want food stamps, welfare, etc that we should stop means testing these programs, and just pay higher taxes to give them to everyone-including those who pay higher taxes for the programs. It would remove the disincentive that is there now.
??? Millions of American adults earn $8/hr and say no to themselves every day; one in four jobs today pay no more than $10 per hour. I have never earned as much as $9 per hour and I say no to myself all the time; I rent a freaking ROOM and don't have a car or TV.
Why is someone making $8 an hour able to pay rent (operating cost of housing plus landlord orofit) yet not be able to afford to buy the same housing? Owning is cheaper than renting in at least 48 of the 50 largest US housing markets, yet renters can't afford to own homes???
And there are plenty of people who can't afford a 3BR house on a quarter acre, but they CAN afford a 400-sf house on a 2,500-sf piece of land. Government is usually the only thing stopping these people from buying and owning homes. These people CAN afford X, but government prohibits the sale of X - this clearly is the fault of government and not of the person earning $8 per hour.
When you say Gov't prohibits your purchase, do you mean you are turned down by lenders because of lending regulations?
75% of those in poverty have 1 vehicle.
33% of those in poverty have 2 vehicles.
You're going about this the wrong way.
??? Having 2 vehicles is not always a marker of affluence and sometimes can be a market of poverty. I once had 2 cars (one died, I bought a replacement, later got the dead car running again so had 2 working cars), both cars were clunkers and I would have preferred to have one good reliable car but that was not an option, so I kept the two clunkers so that I would (hopefully) always have one drivable car.
??? What is the median value of these cars owned by the poor? Owning a $2,000 car does not make one affluent; these cars might even be gifts and not personally earned. I had a co-worker whose grandmother gave him her car when she was no longer able to drive it.
??? The rural poor often need cars, as do many of the working poor.
When you say Gov't prohibits your purchase, do you mean you are turned down by lenders because of lending regulations?
??? No, I'm saying government literally prohibits the same of said property; I do not know of any non-rural places where government allows the sale of a 400-sf house on a 2,5009-sf piece of land. In my area, minimum lot sizes of 6,000 sf to 10,000 sf prevail.
There is more money to take from the middle class than the rich because there are more of them.
That's an interesting thought...but this link seems to say otherwise.
According to this, the total AGI of the top 5% is higher than the bottom 75%. In 2010 the top 5% had a total AGI of $2.7 trillion. The bottom 75% had a total AGI of $2.6 trillion. Seeing that the bottom 75%, and certainly the bottom 50% need much more of their money just to live, there is more available from the rich. Hell, the top 25% has twice the total AGI of the bottom 75%. So, it would seem (and correct me if I'm wrong) that if you took every dollar from the bottom 75%, and only 50% of every dollar from the top 25%, they'd be equal, yet the 75% would have nothing left, and the 25% would still be rolling in it.
Whether you agree with it or not is an entirely different discussion.
You are correct, only about 3% of employed persons make the federal minimum wage. Roughly half of all Americans live in states that have a higher minimum wage, so I am estimating an additional 2%-3% earn their higher state minimum wage.
Fast food workers would never have asked for $15/hr wages if they were still high school kids - this was made possible only because the number of adults trying to live on fast food wages has reached critical mass.
Please give a source for your estimations. Especially your 'one quarter of jobs in this country make close to minimum wage' nonsense?
Can you also talk about low wage earners who refuse to look for more work, refuse to get a car, refuse to look for a second job, refuse to get more education and somehow still blame someone other than themselves?
Habit 1: Inability to Save and Invest.
Habit 2: The Poor keep poor company.
Habit 3: The Poor focus on financial survival.
Habit 4: The Poor expect a financial miracle!
Habit 5: The Poor fail to recognize potential Money.
Habit 6: The Poor lack solid money-making ideas.
Habit 7: The Poor give reasons.
The poor give all sorts of reasons and excuses for their failure. The poor are good at not accepting responsibility for their financial status or station in life. They will rather blame other people and circumstances for their plight, failure and lack of achievement. Hear them. If I had a university degree! If I did not have a wife and children! If the economy was not into recession! If I were younger! If I had rich parents, etc.
However, no matter what alibis they come up with, they still remain poor because alibis cannot translate into money.
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