Our GNP has been growing. Inflation has been rising since the 70s and cost of living has increased. Yet wages have stagnated.
Most wage increases over the last 20 years have been less than helpful in keeping up a Middle Class. You can see by the above chart, the lowest incomes have actually decreased in the last 15 years! Inflation has continued. No wonder we no longer have a Middle Class. I’d say Middle Class has dropped into the following categories: Poverty-Stricken, Poor, Middle Poor, and Barely Squeaking By.
In 1970, minimum wage was $1.60 an hour. Today, it’s $7.25 an hour. That’s a 353% increase over that period of time, which seems like a fair amount… until you actually start looking at how prices have increased.
What about average wages? I couldn’t find a document that laid out full details on average wages per year, but this document from the Census Bureau, laying out some average wage information, shows that average household income has roughly kept pace with consumer prices.
In January 1970, the Consumer Price Index was 37.8. In January 2011, it was 220.223. That’s a 482% increase over the period we’re looking at.
In other words, for every dollar increase in the minimum wage since 1970, the price of an average item has gone up $1.36. Even adjusting for inflation, a dollar today buys less than it once did for low income earners.
So, for a person freshly out of school, the initial income outlook is worsethan a fresh graduate in 1970, but after some career advancement, their salaries end up being comparable given inflation.
In 1970, a year of tuition at a public university cost $1,207. In the most recent year of data available, 2007, a year of tuition at a public university cost $11,034. That represents an annual average increase of 6.2%, which, if you applied it to the 2007 price, gives you an estimated 2010 cost of a year of education as being $13,216. That’s a 994% increase in the cost of a four year degree.
So, let’s say you’re earning minimum wage and trying to make it through college.
In 1970, you could work 755 hours at a minimum wage job over the course of a year to earn enough to pay for a year of schooling at a public institution – about 14 hours per week.
In 2010, you would have to work 1,823 hours at a minimum wage job over the course of a year to earn enough money to pay for a year of schooling at a public institution – about 35 hours per week.
Most people I know are in the Just Barely Squeaking ranks. They own houses with large mortgages, have car payments, and credit card debt in excess of $10,000, lots of that is student loan debt. Adult household members work at jobs they probably hate, and don’t pay near enough. Jobs they have taken mainly for the insurance benefits, which have decreased steadily over the past 15 years. Ever since the Reagan Era “Trickle Down” theory.
We pay more for homes, cars, and groceries than ever before, and are (for the most part) no better off than their Middle Class upbringing. Why?
Technology. It’s expensive. Lot’s of techies make lots of money, but it doesn’t trickle down very far. Maybe it trickles to their housekeeper, gardener, grocer. (All of whom make 1/4 of what the Techie does.) Technology, that god I heard about ever since I can remember. That thing that would give workers more leisure time. That thing that has replaced people with computers and robots. Remember the old Secretarial Pools? Large documents would be typed up by a bevy of women with each one typing a section over and over. It took more people to do the typing because at that time Xeroxing was new, time consuming, messy, and expensive. Now one person can type entire documents. Granted this didn’t happen over night, but computers have eliminated millions of jobs.
Health Care. It’s expensive. Insurance costs for such care is beyond believable when you see hospitals charge $1,000 for Tylenol. Doctors charge over $300 per 15 minute visit. Luckily most of us can still see a doc for under $50 co-pays, but not all of us. God forbid you have a serious health problem like cancer, Parkinson’s, Huntington’s, Progressive MS or ALS.
Housing. It’s expensive. Greedy people have driven up the cost of homes to unprecedented heights. New York, Paris, London, Los Angeles; all the major cities are virtually unaffordable for the Barely Squeaking. In my city the cheapest homes you can buy are $500,000 fixers, for which you need another $200,000 to make repairs or alterations.
Gentrification of Poor Areas. Rich Man buys apartment building occupied by 20 families each making less than $30,000 per year. Rich Man evicts all 20 families. He spends millions to rehab and improve his investment. Who can blame him? So he puts in expensive carpet, wood floors, guts the bathrooms and kitchens and adds stainless steel appliances, granite counters, fancy pedestal sinks, and low-flush toilets and showers. The evicted families were paying less than $1500 per month for their 2 bedroom 1 bath apartment. The newly finished building now houses only 10 units, minimum 2 bed/2 bath over 1500 square feet of living space (as opposed to the original 700 sf 2 bed/1 baths). There is now underground parking, and a concierge. The units are now to be sold as condos, starting at $750,000.
Improving the poor areas, right? No. It’s just relocating the poor by force. Those 20 families now struggle to find a new apartment that they can afford. Usually they find something farther from their jobs. Making it more difficult for them to keep those jobs. Likely a job will be lost simply because they can’t make it to the second job on time riding the bus. Bus service is slow, cabs or Uber are expensive, cars even more so.
Many people with such low income work two part time jobs. Neither of which will provide health insurance coverage if the worker puts in less than 30 hours. So mom and dad work two minimum wage jobs without health insurance. Their only health care provided by ERs across the nation, thousands of which have been systematically closed down by the Board of Directors of hospitals, because the ER is not cost-efficient. Why? Because 90% of those in an ER have no insurance and no means to pay for their visit. ERs are required to treat a person, regardless of their ability to pay. It’s no wonder they aren’t cost effective.
That says a lot when discussing a National Healthcare Insurance. ERs would no longer be crowded with people with ear infections and colds, and could return to the intended use for accident victims. Thereby decreasing costs simply by eliminating those without means from incurring debt they cannot pay. It’s not Socialism, at least not in the bad sense of the word, it’s common sense with some compassion tossed in.
Do rich people really think I want to be borderline poor? What is this lingering hate toward the poor (and the homeless)? It’s been with us thousands of years, ever since “income” became a necessary part of life. The poor in this country will continue to fall further behind and end up on Welfare (another GOP-hated social assistance). The number of homeless will continue to increase.
Don’t those in power and/or with money care at all about us down here on the bottom row of the pyramid? We built the fucking pyramid, we should not have to be buried by it.