Why most Americans aren’t seeing any recovery

Great article that i just wanted to share with everyone.

Why most Americans aren’t seeing any recovery | Rare.us

It is stating that even tho the USA is onto financial recovery that still major segments of the population are actually on the rise. Single-mother families are falling into the lowest income group.

William H. Frey, a Brookings Institution demographer says "We're in a selective recovery."

This shows that data from one income group is skewing the over all results to say we are all doing better when we are not. I think this is still an issue and should be put to the front of the media.

 

The only outside factor that changed, if we compare the time before the recession, is immigration, and the high fertility rates of recent immigrants. Perhaps economists really need to be asking themselves whether this had some fundamental affect on the supply-demand structure.

It might not have merely been a housing bubble, but rather a more fundamental change in the economic structure underlying all this. You can't add 60 million new people to a country in such a short time period without it having some big effects.

 

First of all, I want to say that all women with a child who are single parent are poor in any society..and it hasnt much to do with the economic situation too.

Women are lazy by nature, majority of them dont pursue careers and accumulate wealth, men do!
All those women should get in on the act and realise that all that labor inequality between genders shouldnt be the status quo.

-Depending on education..- well I assume that education is a factor in getting a job, dont you?
-Race... hmmm
-Income.. I think they mean that different income groups recover differently. This is natural..if you have skill, you will recover quickly.. if you dont have a skill (usually low income groups poss no skill), you recover slowly, because you are not really needed to a business that considers you as a superfluous expense.

Nice to see how foreigners take native Americans jobs..lol.

lol..it is hilarious to see how incomes drop while Obama is being the president.
He is really a class act with his degrees in politics and constitutional law..

lol... 16 million received food stamps,,and 8 million are below poverty levels. unlucky 8 million.

If he wants to fight income inequality / wage discrepancy he can.. That could ruin things.. what is he going to do ? smooth out incomes?1?
All that rhetoric of "paying a fair share" and "closing the inquality gap", everything is hot air.
"making unequal things equal is bad politics" - Aristole.

 

When we use the word 'recovery' what exactly are we trying to say?

What exactly are tens of millions of Americans with little to no work skills and little education supposed to 'recover'?

What is the unemployment rate among Americans who have marketable college degrees and can show a productive work history? I'll guess it's very low.

What is the unemployment rate among Americans outside of the above segment? I'll guess it's very high.

How many tens of millions of Americans, no matter their skills and education, live in rural America or those areas which are not served by major corporations?

How many middle-class paying jobs have been lost to outsourcing?

I could go on and on and on asking these somewhat rhetorical questions and IMO there are many reasons why millions of American workers, or worker wannabes, are going to struggle well into the future...actually forever. We cannot consume ourselves into grand prosperity, and we cannot expect to earn more than our qualifications allow, and we are reluctant to live within our means. Meanwhile government is a miserable failure in providing great public education, a failure in providing affordable and efficient public transit, a failure at maintaining our neighborhoods with security/safety and infrastructure.

Combine all of the above, and other stuff you can think of, and we find answers why this idea of a grand 'recovery' is unlikely...

 

When tens of millions of jobs requiring no work skills and little education open up. We're talking industry jobs here and those have long since been shipped overseas. Big mistake.

 

The whinge about outsourcing from Americans typically doesn't make sense. The US imports a relatively small proportion of its GDP. The abundance of low wage labour also reflects a structural defect alien to trade. Want to ensure people benefit from recovery? Shift away from the stupidity of right wing economics

 

Outsourcing has more going for it than receiving imports in return...US companies who operate in the global economy shipping product all over the world, once did most of their manufacturing in the USA. Some portion of this manufacturing for myriad reasons is now done off-shore some of which is exported back into the USA and some of it exported to other parts of the world. Actually, the way to recovery is not about right or left wing politics; it's about the USA competing in the global marketplace and expanding exports. If we can't easily increase domestic consumption then we must look at the other 7 billion consumers located outside of the USA and build stuff they want...

 

I don't see any need to expand exports. There is no need for export-led development after all. There is the issue of a trade imbalance and potentially disastrous effects on the dollar. Your reference to consumption is the key. Americans need to save more!

 

It is unlikely Americans will save more since so many live pay-check to pay-check or no-check to no-check and many can't keep up with inflation. This is why I believe we cannot consume ourselves into prosperity. If we can't do it ourselves then we must look to exports. I think we can grow domestic consumption 1-2% per year but never enough to greatly increase GDP and create new jobs. When the US has 300 million population and the world has 7000 million population...it's kind of a no brainer to see that great potential lies beyond the US shores. Obviously we can't be manufacturing 79 cent widgets for export because we can't compete in this arena with offshore labor and materials. One area I'd like to see the US focus on is farming; we should be a major exporter! We have our technologies and innovation and proprietary products but not too much of this translates into US jobs...

 

The average Joe might not be able to, reflecting the gross inequalities and structural issues that hamper all benefiting from trade etc. However, increasing savings (and of course China increase consumption) is a must. That can be derived through numerous avenues (e.g. pension funds)

Agriculture is already subsidised. The US-EU unholy alliance in that protectionism hinders trade liberalisation and therefore export opportunities.

 

Easy to say, but I suspect there are economic equilibria at work, and the wealth will continue to be drained abroad until the economy reaches a certain point.

 

This is just mercantilist clap-trap. Not interested

 

Problem is it's the Average Joe who are the one's experiencing little to no economic recovery. Other than the economic issues Americans have many of them also are incapable of wise spending decisions, buying non-essentials as priority over more substantive purchases or investments or cash savings. We feel so entitled to have everything that even without cash we just use credit to buy crap we don't need...maybe this is the American way?

Regarding agriculture, whether it is how US government subsidies farming or the trade agreements, etc., IMO it is inexcusable for the USA with all of it's great farming areas, not to be utilizing most of this potential. It also can provide jobs and income to millions who no longer can find the manufacturing jobs...

 

The gross inequalities in the US will always be a problem. They're just more obvious in recession and in recovery.

Its more about being bought into certain long term savings. I certainly wouldn't blame the individual. Indeed, those inequalities will inflame the possibly destabilising result.

Agriculture is important for long term security. A mature economy, unless its land abundant, shouldn't see it as an answer. US agricultural protectionism (although I'd blame the EU more with its history of the Common Agricultural Policy) has harmed trade and therefore killed economic opportunity

 

What about Lord Keynes paradox of thrift?

The reason American's don't save, is the interest rates are lower than the increase in COL. That won't change as long as the Fed keeps rates low to keep the interest on the debt low.

 

Irrelevant to the discussion. This is a simple reference to the income accounting identity and how instabilities from an exchange rate shift can be avoided.

Interest rate policy in monetary policy is standard.

 

The reason they havn't seen a recovery is because there hasn't been any recovery.

 

1% of the population is gaining by 'recovery', as is pretty much the case over here. Ordinary people's living standards are falling back and back, particularly in the 'States. The thieves take so much that their silly system is collapsing, because ordinary people have nothing to spend on trade goods. Even the mugs can't sleep forever, as they are served up the grass of 'freedom' by the sodden thieves.

 

Yes, some sectors, like the govt sector, perhaps the military industrial complex, & no doubt the academic sector, with grants, subsidies, & taxpayer money being thrown at them.. these 'sectors' are doing great! DC has exploded with 6 figure govt salaries, & even housing there has risen with the demand. But the problem is, these are NON PRODUCTIVE segments of society. Govt is a leech on society, not a producer. It is necessary, but still a cost.. it does not support itself.

The problem is that PRODUCTIVE segments of the economy are down.. way down. Manufacturing is still being exported. Farming is doing well, as incentives for ethanol provide an artificial market, & the global demand for food has stayed high. But just about every other NON farming sector is struggling, both under burdensome & uncertain govt regulations, & foreign competition. The insistence that every worker has a 'right' to a $40/hr job has sealed the doom of domestic production. We may succeed in socializing the american economy, levelling the field until everyone is poor except the politicians & their cronies, but the world still runs by the free market, & will not buy our overpriced goods. We no longer have dominance in manufacturing like we did post ww2, & the sooner we adapt & compete the better. But mandating wages & price fixing by bureaucrats won't do this. The entitlement mentality only ensures a longer & harder fall.

 

The workplace only provides a certain quantity of jobs which obviously range in income...typically workers with higher education and learned skills earn more while those with little education and few skills earn less...this is not an inequality! It's a very competitive arena and those who persevere and gain education and skills are going to reap the rewards while those who don't will fight over the table scraps. If those fighting over table scraps are fed up...then they must personally take steps to acquire more value in the workplace.

In the USA, for several decades now, the average high school graduation rate has been ~70%. IMO another 20% didn't learn anything...this means 50% of our kids arrive at age 18, with no education and no skills. Allow this to continue for 20-30 years and we end up with tens of millions of people in this category...unemployed and hopeless. More population more unemployed and more hopeless...and guess what...there is no solution for them except to take personal steps to obtain education and skills

Any individual, starting with their first job at age 18, could save 5% of their earnings and do so until they retire. But reality tells us that people won't do this. It's gotten better with US employers providing investment plans and company contributions, etc. but IMO left to the individuals most would not save a dime.

Regarding farming, when a nation has plenty of land and water and weather and knowledge it is inexcusable for the nation to import farm products! If anything the nation should be exporting because we have the capacity to do so. Farming has great potential to bump the economy and provide jobs and small business opportunities...

 

The US has relatively low social mobility. That informs me that there are innate structural problems. Its a sign of class limitation after all.

Rubbish! Trade is natural. The only issue is the extent that protectionism is required for security reasons (given trade can be affected through political upheaval).

I find US agricultural subsidies repugnant. I despise how it negatively impacts on poorer countries and I despise how the US (with the Europeans of course) have deliberated hindered multilateral trade liberalisation.

 

So-called class limitation is a meaningless statement and only serves to divide the masses. Just because one group might score differently than another group does not necessarily indicate the root causes are 'limitations'. Obviously if one person is born into poverty and another person born into privilege, it might be a tougher road for the person in poverty to achieve their potential, but it is not a limitation. A limitation implies a restriction or limit which cannot be exceeded or overcome and this is nonsense regarding 'structural problems'. Every person, no matter their capabilities, has an open road ahead of them to achieve their potential. Some roads are bumpier than others, some take more time to navigate, but there are no limitations on this achievement other than the person's own innate limitations which all of us posses in one form or another.

Trade 'should be' natural but in reality it is not because of government and other interference. When the US possesses the infrastructure to produce more food than we can possibly use, leaving not a single American hungry, creating jobs and business opportunities, and there are economic export opportunities, it is IMO inexcusable for the US not to pursue and grow farming. Regarding your security reasons, a nation who cannot feed itself, is a risk.

I agree that US agricultural subsidies have run amok!

 

Nope! A country based on individualism should naturally see mobility. Work ethic and/or innate ability should be sufficient to ensure significant income distribution volatility. The US has low social mobility. Its on a par with the Limeys. That is certainly indicative of class limitation (where an individual's efforts are unfortunately curtailed by structural deficiency; here, a deficiency largely engineered through neo-liberalism).

There an inconsistency in your comment. The US heavily subsidises; that typically encourages overproduction (and negative knock-on effects, such as 'dumping' of product on other country)

 

Not if you compare the state of the overall economy before the outsourcing craze to the state of the economy now. I realize that there are other factors involved, but that's the big one. We've turned the country from industry-based to paper manipulation-based.

 

Deindustralisation is a natural outcome in a mature economy