A new gilded age shines on America – 50 million Americans roam the countryside uninsured. 45 million Americans receiving food stamps up by 18 million since the Great Recession began in late 2007.

Much of the country is in psychological denial to the damage being created by the current recession.  Some even believe that we are fully in a recovery.  Part of this has to do with the way the safety net is designed but also the lack of coverage presented in the media.  We have over 45,000,000 Americans on food stamps. It is likely someone you know may be on the food assistance program but you wouldn’t know it because they are issued a debit card that looks like any other credit card.  You also have this stubborn notion that any problems that befall a family are completely their fault while big bankers make egregious errors and somehow it is the market that caused their ill fortune.  This twisted logic has become more apparent with the economic disaster data released in the recent Census report.  46,200,000 Americans are now considered to be in poverty, over 15 percent of the population.  It is no coincidence that this figure aligns with the food stamp data.  In essence we have close to 50 million Americans who are one debit card payment away from being in complete financial trauma.  What is happening to our country?

Destruction of the middle class

We should first look at the food stamp data:

food stamp participation

Source:  SNAP

I went ahead and plotted the number of Americans receiving food assistance since the Great Recession started.  According to official data the recession ended in the summer of 2009.  The above chart clearly shows that many Americans haven’t received this notification.  Many of those added to the food stamp program have fallen out of the middle class and straight into the poverty ranks.  A stunning 18,000,000 Americans have been added to the food stamp program just since the recession began in late 2007.  This data does not signify progress.

If you think these people are splurging we need only look at the rise of the dollar stores in the country.  Dollar stores have taken a large piece of sales from low cost stores like Wal-Mart and have catered to this large crowd of consumers that are simply seeking basic goods to get by per month.  Don’t think the money is large here.  The average food stamp payment per person for a month is $133.

The food stamp growth goes hand and hand with the number of Americans living in poverty:

census poverty

The poverty rate is now back to that of the early 1980s.  The big difference this time is that we have trillions of dollars being funneled to a largely crony banking system that is preaching a free market for the poor and middle class and a form of plutocratic protection for the top one percent.  So far they are getting their wish since bought out politicians are adhering to their wishes.

A workless America in the new gilded era

One of the best measures for the health of the employment market is the civilian employment-population ratio put out by the BLS:

civilian population ratio

This is not a good picture.  The chart is much worse than it appears because we have now a fully integrated two income household track while in the early 1980s the trend was only picking up more steam.  What we are now facing is a demographic shift with baby boomers unable to retire since 1 out of 3 Americans have no savings account and more troubling, for every one open job position you have six Americans competing for that spot.

We recently saw a bump in the manufacturing sector.  Yet this jump is coming in the new form of lower wage capitalism:

“(NY Times) Nothing distinguishes them from other workers at the Jefferson North plant, except their paychecks. The newest workers earn about $14 an hour; longtime employees earn double that.

With the economy slumping and job creation once again a pressing issue in the White House and Congress, the advent of a two-tier wage system in Detroit is spiking employment for one of the country’s most important manufacturing industries. The new jobs, which are seen as long term, are being watched closely by economists, executives in other industries and Washington policy makers eager to increase employment in manufacturing and other areas.”

manufacturing

Even the once higher paying manufacturing sector is slightly coming back but with much lower wages.  How can these lower wages support inflated housing prices or the absurd cost of a college education?  It is hard to envision wages increasing heavily in the next five to ten years with the glut of unemployed in our country.

If food doesn’t get you then healthcare will

Another incredible statistics released in the Census report shows that close to 50,000,000 Americans are uninsured for healthcare.  In other words, you have one out of every six Americans one emergency room visit away from being in bankruptcy.  Figures like this make me wonder how many preventable illnesses will go uncheck for the upcoming years only to show up in five, ten, or even fifteen years down the road?  A routine overnight stay in the emergency room will cost thousands of dollars even just for one night.

I’m not sure this is what we had in mind when we thought about a recovery.  The big issue at hand is that there is absolutely no consumer protection for poor and middle class Americans.  The banking system has rigged the system to treat the majority of Americans as debt slaves while they socialize their own losses and maximize their gains through insider information and political clout.  It is hard to have a successful system like this when the destruction of the middle class is par for the course.  Switching from Republican to Democrat and then from Democrat to Republican is not working.  There have been a few champions for the middle class like Elizabeth Warren that for decades have fought to protect the middle class.  Hard to say if one person can change a system this big with so much big money influencing the process.  The entire system needs to be reformed and organized lobbying money needs to be removed from the political process or we can expect these kind of figures to continue for years to come in this new gilded age.

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8 Comments on this post

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  1. surfaddict said:

    the best consumer proection is: Dont BUY it. Vote with your feet & wallet. Stuff is overpriced cuzz we pay for it…through health insurance, etc. Remove the inefficencies in a market, then the consumer decides, not an industry or beurocrat.

    September 16th, 2011 at 1:48 pm
  2. Tom Baxter said:

    Well we are in a recovery. Capital is doing fine. Profits are higher than ever. Pesky employees don’t expect raises and if they ask, there’s the door.

    September 16th, 2011 at 8:06 pm
  3. Donnie said:

    Many Americans ask; where is the outrage? In the sixties and seventies Americans flooded The Mall in DC in the hundreds of thousands. Where are they now?

    September 17th, 2011 at 4:56 am
  4. booger said:

    A political solution seems impossible. I did find it interesting that since 1931 the Republicans have only been in REAL power (defined as decent majority in House, Senate, and having a President of the same party) only 4 years!!! The Democrats have had this kind of power for about 36 years out of the last 80. Thus we got Social Security, Medicare, Medicaid, HUD, Labor department, Education Department, Commerce Dept. Which when started sounded nice but now have shown that we can’t continue to afford at current levels. Conservatives will continue to have to be the bad guys of cutting these programs back to affordable levels…but good luck getting them to stick it to the rich 1%

    September 17th, 2011 at 8:13 am
  5. william said:

    This is some very valuble information that i would like to get.
    Very powerful and helpful to me because i am looking for was to build my own business for helping others to do the same. the home business industry. THANK YOU FOR THE INFORMATION IT HAS A LOT TO DO WITH MY FINANCIAL FUTURE.

    September 17th, 2011 at 11:18 am
  6. weaver said:

    Nice article, but incomplete. The author asks, “What is happening to our country?”

    Item !. Population:

    The communications revelotions has changed the paradigm of job creation, the Internet has allowed the creation of jobs where the most most-competitive workers reside. With this fact in mind, the U.S. clings to a mass-immigraton policy that harms citizens and permanent resident into competition with Desparate cost-competitive workers.

    For the first decad of the 2000’s, the population of working age adults grew by 22 million, while employment levels for this population only grew by 1 million.

    Item 2. Housing:

    The housing bubble had another component beyond easy credit. That component was increased housing demand from populaition growth. Bottom-up demand, caused housing inflation, meanwhile desparate new immigrants, bid down the cost of labor. This was no accident, throughout the Greenspan years, there is evidence of the use of immigration as a control/cap on wages and a demand driver on housing.

    Finally, there appears to be a point of diminishing return on the positive effects of immigration. In the end of the last guilded age, (the Depression) the percentage of employed foreign born in the labor-force was 15%. Likewise, the percentage of employed foreign-born in the labor force was 14% in 2007. Between the Depression and the Great Recession, the percentage of foreign-born in the labor force had fallen to 4%. (2009 Census data)

    Immigration is a tool that is used to create these Guilded Ages.

    September 17th, 2011 at 11:58 am
  7. Dumbfounded said:

    I am sorry to be the bearer of bad news, but the American middle class is dead and will not be coming back. What did we expect would happen while we watched TV for 40 years? Did we think things would improve by themselves? How can anyone be surprised at our current state of affairs? Hey, I know how to fix things. We need more taxes, more wars, and more lobbying. America…land of the broke and home of the asleep.

    September 17th, 2011 at 7:53 pm
  8. Jim Cap said:

    Well, there’s only one way to get out of this mess: We’ll cut and starve our way to prosperity!

    First: Get rid of those food stamps! They make people lazy and dependent, especially those greedy kids!

    Then, get rid of unemployment compensation. Kill “Obamacare” and let the health insurance companies do as they please. Then, start “Entitlement Reform” and cut way back on Medicare, Medicaid and eventually, Social Security. Once these programs are gone, people will begin to take initiative once again, and personal responsibility too!

    And, throw even more people out of work. Let them compete with the millions already looking for a job. Everyone knows we don’t need any of those public employees. And, the best part is, when those public employees become unemployed it will create even LESS demand for the businesses that need more people buying their goods and services!

    Cutback, cutback, cutback…then layoff, layoff, layoff…then remove all social safety nets…don’t worry, the responsible and hard working people will do just fine. Only “the losers” who deserve it will suffer.

    Yes, indeed, we’re going to “Cut Our Way To Prosperity”! Everyone knows how well this has always worked wherever it’s been tried.

    October 4th, 2011 at 3:34 pm

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