What is the middle class... and why is it going away? (unemployment, wages)

[pnwmdk]

Good grief, there are so many confused people talking about this, who really don't have any idea what they mean when they mouth the platitudes... .so, let's try something that makes sense.

For a moment, let's make an assumption that you can't be any more "broke" than to have nothing - and by nothing, I mean nothing of any significant economic value. You can have clothes, even a cheap PC or tablet, a tv, and appliances, family keepsakes, etc, and it has a real value that approaches nothing. You could not sell it all in a rush sale and buy a car, a house, or pay rent for an extended period of time, etc.

So, let's say that if that's all you have, you have an economic worth of zero. You cannot get be worth less than that. Debts are obligations, but those can be discharged or remain unpaid - so, you can't be worth any less than nothing.

So, being worth nothing is poverty. But you have a job. So, you work at that menial job, and pays you $9.00 per hour, that's $1440 for 160 hour month. The home you live in (house, apartment, condo, mobile home... doens't matter) costs you $600 per month and you and your spouse consume the rest to eat, have clothes and heat and lights and water.

How much are you worth, economically? Still nothing.

Imagine your landlord agrees to sell you, on payments, your home. You make 600 dollar payments for 7 years and the apartment is yours. Now, what are you worth? My guesstimation? About $30,000. Now that you no longer pay rent, you can take your 1200 / mo (after taxes) and use what's left of it elsewhere. So, you begin to put that $600/mo into an investment. After 15 years of investing that money carefully, you are now worth about $250,000. Enough to start some pretty profitable businesses, or just keep saving for your future.

In 23 years, did you become middle class, or are you still in poverty? While your income would be, by all political standards, "poverty", you are, in fact, worth quite a bit. You became, despite a low income, "middle class". By living frugally, by judicious decisions, and by discipline and careful choices.

So why are so few blue collar people not middle class? It isn't the pay scale.

It's the fact that their house... they now pay 30 years of interest to buy a home that's overpriced by 2 to 20 times what they should, they pay all 600 a month in property and sales taxes instead of saving it. In that case, the state is 18,000 dollars richer... BUT you are 230,000 dollars poorer.

Where has the middle class gone? It has been taxed away, by taxing ownership. It's precisely that simple. The difference between the poor and middle class is not income, it is ownership and investment in ownership. And the difference between 30, 40, 50, 60 years ago, and today, is taxation.

In the 50's, the average person paid 2% of his income in federal income taxes. Property taxes were a little more, but not much. Limited availability of cheap loans kept the price of real estate from skyrocketing in most places. Thus, ownership was within reach of most who wanted. And once ownership was achieved, taxation of ownership was small and easily affordable.

Across the street from me is a house for sale. It's been for sale for 1.5 years. I live in a blue collar neighborhood. The payments would only be $750 / mo to own it. Except for the taxes. The taxes push the cost of ownership to 1100/mo and it goes up every other year, by quite a bit.

Where has the middle class gone? It is being taxed out of existence. Instead of owning, the middle class rents from either the state or the bank, or wealthy person, enriching them, but impoverishing himself.

Question answered.

Now what is your solution? More debt? Easier loans? It's worked so well up to now, hasn't it?

[TheHurricaneKid]

It's going away because jobs created have less hours, less pay, less benefits, etc.


The solution is an innovation and start-up friendly environment, along with an educated populace.

[HappyTexan]

Middle class consume too much.
As the world grows you cannot have all these countries with consuming middle classes.
We don't have enough resources or created wealth for that to happen.

You cannot just look at the US anymore.
You have to look at this on a global scale to see what is happening.
As the emerging nations move up in standards we are declining.

[petch751]

Originally Posted by TheHurricaneKid

It's going away because jobs created have less hours, less pay, less benefits, etc.


The solution is an innovation and start-up friendly environment, along with an educated populace.

Making enough money is half the problem. Figuring out how to keep it is the other problem. Once you make the money, the government reaches in and takes part of it. If you figure out how to make more money the government comes in and takes a larger percentage.

There is more money to take from the middle class than the rich because there are more of them. Government will take what they can up front and disguise what you won't accept.

"Middle class Americans will not pay one more dime in taxes"
-- Barack Obama

He lied

[HappyTexan]

Originally Posted by petch751

Less pay and taxes reducing what you get to keep.

You've got to "Go Galt" and do it on your own with as little reliance on the system as possible.
The "system" is not there to help you.

[pnwmdk]

Originally Posted by TheHurricaneKid

It's going away because jobs created have less hours, less pay, less benefits, etc.


The solution is an innovation and start-up friendly environment, along with an educated populace.

You failed utterly at comprehending what was said to you in the original post.

It was NEVER wages... It was ownership and KEEPING WHAT YOU EARNED.

[petch751]

Originally Posted by HappyTexan

You've got to "Go Galt" and do it on your own with as little reliance on the system as possible.
The "system" is not there to help you.

I agree but I'd like to hear how you are going galt as much as possible?

[pnwmdk]

Originally Posted by petch751

I agree but I'd like to hear how you are going galt as much as possible?

They have. In droves. Why do you think unemployment is intractably insanely high?

"Going Galt" is not about moving off to some place and hiding. It's about ceasing to produce wealth and feed the beast, to be productive and just have it stolen from you.

There are millions of Americans who have slowly, yet dramatically, reduce how they "feed the beast". They have one man businesses with no employees. Instead of growing and hiring, they just stay as they are.

Millions upon millions are not even attempting to reach their potential of productivity anymore. They have decided the reward at the end has been stolen, so they just 'get by'.

In Atlas Shrugged, Galt held the key to global transformation through tapping into near limitless energy for near nothing, but refused to develop it because it fed the beast that would profit from it.

Millions of us have "Gone Galt" in big and small ways, it's only going to accelerate faster.

[HappyTexan]

Originally Posted by pnwmdk

They have. In droves. Why do you think unemployment is intractably insanely high?

"Going Galt" is not about moving off to some place and hiding. It's about ceasing to produce wealth and feed the beast, to be productive and just have it stolen from you.

There are millions of Americans who have slowly, yet dramatically, reduce how they "feed the beast". They have one man businesses with no employees. Instead of growing and hiring, they just stay as they are.

Millions upon millions are not even attempting to reach their potential of productivity anymore. They have decided the reward at the end has been stolen, so they just 'get by'.

In Atlas Shrugged, Galt held the key to global transformation through tapping into near limitless energy for near nothing, but refused to develop it because it fed the beast that would profit from it.

Millions of us have "Gone Galt" in big and small ways, it's only going to accelerate faster.

There are more "retired" people owning hobby farms and selling meat/veggies/etc. than professional farmers.
The guy at the Farm Bureau told me he had more applications from people like me taking early retirement and just leaving the rat race than from young folks starting out.

The clinics the Ag Extension office holds are full of newbies like me learning about forage, pasture care and livestock.

The guy who repaved my driveway got rid of a crew and now does the jobs himself with 2 workers.
He takes less jobs but he says expenses are down and he gets to keep more of the money.
There's a lot more involved with labor costs then the salary you get paid every week.

Yup..starve the beast is happening.

[petch751]

Originally Posted by pnwmdk

They have. In droves. Why do you think unemployment is intractably insanely high?

Millions upon millions are not even attempting to reach their potential of productivity anymore. They have decided the reward at the end has been stolen, so they just 'get by'.

Millions of us have "Gone Galt" in big and small ways, it's only going to accelerate faster.

Yep, I've done this myself. The risks are too high for the potential reward especially after government takes its huge cut. If you do take the risk plus hire more employees there are more responsibilities and expenses. That means that I don't keep putting money back into the business to grow it, alot because the government takes a portion of what could have been put back in.

Back in early 2012 I was going to do a few renovations, hiring a contractor and people to do the work but decided against it, instead opting to hold off if do it at all.