Wednesday, September 21, 2016

The Shrinking Middle Class In The United States

The Middle Class in the United States has been declining for about twenty years.  Middle Class families are earning about the same money they earned years ago.   This has happened for a variety of reasons.   Mergers and Acquisitions have resulted in the elimination of good paying jobs as companies consolidated their operations.   Global competition, which can be brutal has made it impossible to raise prices, which has resulted in little or no wage increases in real terms.  And, what little wage increases have occurred in the last twenty years has often gone to pay for the increased cost of medical insurance and services resulting in little additional disposable family income. 

The fact is that it takes fewer people today to produce work because of technology.  When this CEO Blogger began my career in business as a young manager, nearly all managers had personal secretaries.  And, though those jobs may have been a secondary family income, they often came with great benefits that contributed to family well being.  That all changed by 1990 with the advent of the desk top computer and word processing at all employee's finger tips.  And, companies have continued to cut benefits to reduce costs.

Today, in the United States, there are about 95 million Americans out of the work force.  About half of them are on Welfare and Food Stamps.   The other half are people who can't find jobs because they often do not have marketable job skills and that could include young college graduates that simply have no work experience.  Further, millions of manufacturing jobs and even back office knowledge jobs have been off-shored to achieve lower costs, in some cases as the only means of maintaining profitability.  Those jobs used to result in a Middle Class life style.   Unless, the United States significantly reduces corporate income taxes, eliminates burdensome regulations and unleashes our energy sector to make the US energy independent, which is feasible given our natural resources, those jobs are gone forever.

This is not about income inequality.   The poor are not poor because the rich are rich.  The poor are poor because they are often poorly educated and lack marketable job skills.  The Middle Class is shrinking as much because of government actions as the other forces herein described. 


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