The Vanishing Middle Class

October 5, 2012 at 3:46 pm | Posted in Uncategorized | Leave a comment
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News today that the US unemployment rate dropped in September 2012 to 7.8 percent from 8.1 percent in August and is now at the lowest level since President Barack Obama took office will undoubtedly boost his campaign for re-election, two days after his dismal performance in the first debate with his Republican opponent, Mitt Romney. If this is good news for the president, the situation is less rosy than it appears. According to the Bureau of Labor Statistics, the number of workers stuck in part-time jobs in September stood at 8.5 million, an increase of 581 million from the previous month and double the level it was in September 2007. Even worse, the number of full-time workers in the US  has declined by 5.9 million since September 2007 while the number of part-time workers has increased by 2.6 million.

Full vs Part Time May 1

In fact, if the number of part-timers looking for full-time work, the U6 unemployment rate, is considered, it is unchanged

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And as Moira Herbst writes in the Guardian,

 It’s distressing to think that after 20th-century labor struggles won the battle for the 40-hour work week, the 21st-century struggle is a fight for enough working hours to make a living wage.

In another report in today’s New York Times, the average number of employees per new firm declined from 7.7 persons in 1999 to 4.7 in 2011. For almost the last half-century, new companies have accounted for the bulk of jobs created in the United States, In fact, without new start up companies, the United States would have seen a growth in jobs for only 7 years since 1977! The numbers of new jobs created by new companies was the greatest in 1999 as a result of the dot com boom and by 2011, it had declined by some 46 percent.

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One major result of the decline of full-time employment and the rise of part-time employment is that part-timers are denied virtually all benefits. Without healthcare and other benefits, workers are increasingly compelled to rely on Medicaid and emergency room visits for illnesses and as Herbst noted, this leads to a shift in costs from employers to tax payers. This is of course covered up by both political parties in the United States: the Democrats tout the new decline in unemployment figures but never mention that 6.9 million people were working multiple jobs in the US in September. The Republicans stress cutting taxes–making health care even less accessible to the poor.

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Both focus on a middle-class that is rapidly shrinking and not on the increasing numbers of people below the middle class. For them, neither candidate has anything to offer–and therein lies the shame! In today’s politics, the concerns of the masses are silent–the decline of manufacturing not only hollowed out industries but by also kneecapping labor, it has made both major political parties alike–both shifting further and further to the right, and both having nothing to offer to the vast majority of the population.

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