Are you looking to earn low wages? A college degree might be your ticket. College earning power dwindles over the last 15 years.
We constantly hear the loud drumbeat that a college degree is your ticket to untold fortunes. Of course we never get the detailed report showing students that are drowning in debt and also many that went to for-profit schools or pursued unmarketable majors and guess what? These people would largely have done better by not going to college (you avoid that mega debt). The amount of debt people are taking on to obtain a college degree is at an all-time record high. You would assume that simply having a college degree is sufficient to boost your earnings potential. That is not the case at all. We now have the largest percentage of adults with a college education in history. A good thing right? But we also have the largest number of Americans with unmarketable degrees and many from schools that are one step above a paper-mill. Many would have been better learning a trade (and their earnings would be much higher). One recent report that reflects this big change is the percentage of low wage workers with college degrees (think of the person with the master’s degree serving as a Starbucks barista).
China has overtaken Mexico as the source of the largest number of immigrants to the U.S. – the Far East is the new Southwest.
It should come as no surprise that the US is a net immigration country while China and Mexico are both net emigration countries. What may be a surprise is that now China has overtaken Mexico as the top importer of immigrants. The flood of money from China into key cities has been nothing short of breathtaking. China is undergoing a massive expansion in their country and all of the challenges that come with exponential growth. For most in the public, they simply have no idea that China is now the biggest importer or immigrants to the US now overtaking Mexico. This is a fascinating trend and something that is largely ignored in the media. The US has recently seen a very strong dollar and this has taken an impact on our own domestic manufacturing sector. A stronger dollar makes our goods less competitive in the global stage. As the low wage race to the bottom continues, many are leaving economies where the booms are uneven.
The low wage employment tsunami: Low wage jobs now make up 25 percent of all employment in the United States.
The employment report continues to provide deceptive bread and circus fodder for the mainstream press. Never is any thorough analysis given to the 93+ million Americans that are now part of the “not in the labor force†category. In large part, we have a low unemployment rate because this massive army of Americans is simply not counted in the employment report. Then, if you dig deeper into the report you realize that a wide spectrum of Americans are now part of the low wage economy.  The “recovery†in terms of jobs can be summed up as follows: tons of low paying work, a shrinking of middle class jobs, and few jobs at the top. It is a crony salad bowl of financial incentives to the banking sector while turning a large portion of the country into modern day debt serfs. You need debt to keep up. Good debt (i.e., mortgages) is now tougher to get since banks have crowded out regular families in buying homes. Junk debt (i.e., auto loans) is easy to get and you can simply drive down to your local car dealer and drive away with a new car. With that said, the US has a massive number of workers employed in what are known as low wage jobs. The number is surprising when compared to other nations.
Student and auto debt fuel credit bubble 2.0: Student loans carry the highest delinquency rate of all debt classes. Student and auto debt up $1.15 trillion in last decade.
A large portion of our recent recovery has come from debt fueled consumption. The bailouts have been favorable to financial institutions but access to debt for American families has been in segments that are counterproductive to wealth accumulation. There is no benefit in having access to cheap loans for purchasing a car, an “asset†that loses value immediately after you pull it off the lot. This is what is going on and we have seen a surge in subprime auto loans which is a double-whammy in slamming your financial future. The biggest non-housing debt class in the United States is now with student debt. Student loans are now viewed as the pathway for accessing college. Over $1.2 trillion in student loans are now outstanding in the US and this debt class has the highest delinquency rate of all debt classes. What this tells you is that many with student debt are unable to pay their bills. That is problematic. But this debt fuels the economy in odd ways. Let us take a look at the two fastest growing debt fields.