The economic treadmill is throwing millions out of the middle class and into poverty. In 2010 75 percent of unemployed received unemployment benefits while today it is down to 48 percent. From unemployment to food stamps.
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The economy is being pulled apart from the center as if two mighty horses on both sides were set to run in opposite directions of the financially strapped middle class. This seems to be the current trajectory of our economic progress. The ranks of the poor continue to grow while the financial sector continues to strive based on government favoritism and a strong form of corporatacracy. Take this startling fact under consideration that last year 75 percent of the unemployed received some form of unemployment benefits. That figure is set to fall to 48 percent this year. Part of the main reason has been the long-term structural unemployment in our economy. The current economy resembles two different worlds and most Americans are still feeling the pangs of the recession that began in 2007. The main question many are asking is where will this country be heading if the same financial sector that created rampant disorder in the last decade is still at the helm of the ship? We can look at current trends and the results do not look promising.
The super long-term unemployed
It used to be the case that 99 weeks was the extreme end of the long-term unemployed. But now we are seeing this lack of job growth continue even longer:
Over 30 percent of the currently unemployed have been out of work for one year or longer. This stubborn unemployment is causing major problems in the fabric of our economy. Many states have adjusted to provide 99 weeks of unemployment but the number of those not working is so large that 99 weeks is not enough and many fall off the benefit count. Take for example the proportion of those that are unemployed and receive unemployment benefits:
What this chart highlights is the reality that many of the long-term unemployed are going to fall onto other safety nets like food stamps or other aid. It is astounding how we can be seeing such structural problems yet the financial sector seems to be booming. It is booming not because it has earned it in the typical capitalist sense but they have earned it by stealing it. Unlike the unemployed person that runs out of benefits, the too big to fail simply rewrite laws and call up their Federal Reserve counterparts and draw on their unlimited credit lines. Of course the burden is then largely place on the middle class that is simply struggling to stay in place without falling further and further behind.
The shift from unemployment benefits to food stamps
Whenever I hear about the stock market recovery I simply pull up the number of people receiving food assistance in the United States:
Source: Zero Hedge
The stats are grim when almost 15 percent of the population is receiving food assistance:
“(Yahoo!) The ranks of the poor would also rise. The Census Bureau says unemployment benefits kept 3.2 million people from slipping into poverty last year. It defines poverty as annual income below $22,314 for a family of four.
Yet for a growing share of the unemployed, a vote in Congress to extend the benefits to 99 weeks is irrelevant. They’ve had no job for more than 99 weeks. They’re no longer eligible for benefits.
Their options include food stamps or other social programs. Nearly 46 million people received food stamps in August, a record total. That figure could grow as more people lose unemployment benefits.
So could the government’s disability rolls. Applications for the disability insurance program have jumped about 50 percent since 2007.
“There’s going to be increased hardship,” said Wayne Vroman, an economist at the Urban Institute.”
I’ve seen a few people pointing to the shrinking unemployment rolls as something good. What seems to be happening is that millions of Americans are shifting from unemployment benefits to food assistance. You don’t need to be an economist to know this is not a positive development. And as we all know, a basic level of financial security is necessary to feel happy and consumer sentiment reflects what the overall data is showing, that many Americans are falling behind:
It is troubling to see how quickly and aggressively the middle class is being dismantled in this country. No major party or candidate is willing to take this on as a major platform since most of their campaign contributions come from the corporatacracy and the giant financial sector. This has been going on for too long so it should not be a shock that while the paychecks of the too big to fail executives get bigger the working and middle class get poorer as time goes on:
Source: Reuters, Social Security
With the same policies and big financial players still in the driver’s seat, expect more of the same.