The Stock Market is thrilled – You should not be …

In case you were hoping that America’s three-decade-long trend toward extreme wealth inequality was starting to reverse itself, Pew has some bad news for you.

Nothing has changed.

The rich are still getting richer… and everyone else is still getting hosed.

Today’s monthly job report reinforces that fact.

Out of the marvelous 204,000 new jobs “Leisure and hospitality employment rose by 53,000 in October. Within the industry, employment in food services and drinking places increased by 29,000, the same as its average monthly gain over the prior 12 months.

Employment in retail trade increased by 44,000 in October, compared with an average monthly gain of 31,000 over the prior 12 months.”

In other words of the 204,000 new jobs 97,000 were in low paying positions. Most of these jobs pay less than $15.00 an hour. At $600 per week (15 x 40 hours) their total annual income is $31,200. That number is below middle class. Those in the $10 to $12 hourly pay rate are clearly part of the poor.

So celebrate the number of new jobs if you must. Just realize that this society is creating a nation of poor people.

Wal-mart is making money and so are the owners of corporate stocks.

More Than Half of Wal-Mart’s Hourly Workers Make Less Than $25,000

I have written about the low pay that is received by retail is destroying the middle class. Here is a confirmation posted on businessweek.com.

By Susan Berfield October 23, 2013

Wal-Mart Stores (WMT) is the country’s biggest private employer. Its low wages have incited labor protests and congressional criticism, and have created a cottage industry of public policy research. The company has responded with facts and figures that sometimes raise as many questions as they answer.

Now Wal-Mart has provided some new and useful information: More than 475,000 of its 1 million hourly store employees earn at least $25,000 a year for full-time work. This figure comes from Bill Simon, the president and chief executive officer of Walmart U.S., who presented (PDF) it at Goldman Sachs’s (GS) Global Retailing Conference last month. The statistic, which was listed under the heading “Great job opportunities,” means as many as 525,000 full-time hourly employees earn less than $25,000 a year.

OUR Walmart, the union-backed workers’ group that’s been staging protests and asking for higher wages, pointed this out during a press conference in Washington, D.C., on Wednesday. (The company’s presentation is also on its website.) Three store associates, as well as three Democratic members of the House of Representatives, called on the retail giant to pay all of its full-time workers at least $25,000 a year.

“A decent wage is their demand—a livable wage, of all things,” said Representative George Miller (D-Calif.). The problem with companies like Wal-Mart is their “unwillingness, not their inability, to pay that wage,” he said. “They hand off the difference to taxpayers.” Miller was referring to a congressional report (PDF) released in May that calculated how much Walmart workers rely on public assistance. The study found that the 300 employees at one Supercenter in Wisconsin required some $900,000 worth of public assistance a year. Catherine Ruetschlin, an analyst at Demos, the progressive policy center, noted during the press conference that raising wages can be good for the overall economy. “Putting money into workers’ wallets puts cash in the registers of retailers, and with it the need for new employees,” she said. “We estimate that a raise to $25,000 a year would lead to at least $11 billion of new GDP and generate 100,000 new jobs.”

“We have hundreds of thousands of associates who are making $25,000 a year or more,” says Kory Lundberg, a Wal-Mart spokesman. “And the opportunity exists for those who aren’t to grow into the career they want. We promote 160,000 people a year.” Lundberg also explained how to parse some of Wal-Mart’s figures. The company has 1.3 million hourly workers, which led OUR Walmart to claim at the press conference that 825,000 of them made less than $25,000 a year. Lundberg points out that Simon’s presentation was referring to the 1 million who work in the stores. (The rest work as truck drivers and at the Bentonville (Ark.) headquarters, among other places.) So about 52 percent of its associates make less than $25,000 a year—not 63 percent.

Then Lundberg led me deep into the company’s website to find where Wal-Mart states its average full-time hourly wage: $12.83. How many employees work full-time? Wal-Mart will only say that it’s the majority.

There will be No Middle Class

In September, the number of long-term unemployed (those jobless for 27 weeks or more)was little changed at 4.1 million. These individuals accounted for 36.9 percent of the unemployed. The number of long-term unemployed has declined by 725,000 over the past year.

Both the civilian labor force participation rate, at 63.2 percent, and the employment-population ratio at 58.6 percent, were unchanged in September. Over the year, the labor force participation rate has declined by 0.4 percentage point, while the employment-population ratio has changed little.

These are not my words. They are copied from yesterday’s BLS report for the month of September.

Sadly today’s Los Angeles Times commentator, Doyle McManus wrote the following article that points out the real wealth trend in America. The future looks even bleaker, according to libertarian economist Tyler Cowen.

Cowen is quoted as writing, “Our future will bring more wealthy people than ever before, but also more poor people. Rather than balancing our budget with higher taxes or lower benefits, we will allow the real wages of many workers to fall — and thus we will allow the creation of a new underclass.”

Poof goes the middle class

Imagine a future in which real wages for most workers decline year after year; a future in which middle-class jobs that disappeared in the Great… The rest of this Los Angeles Times opinion here

McManus ends his column with the question, New ideas, anyone? Even if someone has any new ideas how can they be implemented when our political system is broken?

Saying Goodbye to the Middle Class

In 1914, Henry Ford started an industrial revolution by more than doubling wages to $5 a day—a move that helped build the U.S. middle class and the modern economy. After World War II the return of the GIs and the benefits they received prompted an educated society that wanted homes and cars. Union jobs with good benefits along with little competition from other nations made the United States into an industrial power house that lasted for decades.

Then big business realized that there was an opportunity to save money by outsourcing the manufacture of the things we buy. The government accommodated those businesses by negotiating free trade agreements with many nations. Communications with the entire world became easier and cheaper.

People in the poorest nations of the world could be trained to operate the machines that made things Americans want to buy. They would work for one fourth the rate of pay or less than American workers.

Today my computer, television, home theater, camera, and my clothes are all made in another country. The people who used to make those things are now either unemployed or working in low paid service jobs (tourism, retail, fast food, and other jobs that pay less than $15 an hour). The middle management jobs are now part of those outsourced functions. Call the help line for Earthlink or Hewlett-Packard and you will be speaking to someone in India or the Philippines.

“A middle-age middle manager who was laid off is not going to be miraculously rehired in that position or anything like it. Same with the factory worker and the receptionist and the copy editor. They’re finished. Many of the people who held those positions have already pulled out of the workforce and others are moving into different jobs (often at lower pay levels)” writes Mark Lacter on LA Observed.

Do not look for Congress or any government agency to solve this problem. They have no solutions.

Those desperate people who have taken jobs that pay half of what they previously earned are no longer part of the middle class. Those that have not obtained any job at this point are living on their accumulated wealth. Neither of those groups will be spending money as they had in the past. Thus the bifurcated economy of the wealthy and the poor. This means the end of the middle class in America. That is the big picture.

Middle Class Slow-roasted Homicide

“the middle class will continue to be an accomplice in its own slow-roasted homicide”

Today’s unemployment initial claims for last week are 479,000. Those claims have been in the 400,000 plus range since November 21, 2009. That continuing issue might be the real reason that the GOP will be successful in November.

This explanation provided by a friend, Burt Feinstein

We’re only three months away from the midterm election when a shockingly large number of American voters will inexplicably vote for Republican candidates. I have no idea if this will mean a Republican takeover of the House or Senate or both, but there will definitely be enough voter support for Republicans to significantly reduce the Democratic majorities in the House and Senate.

Why? Because too many voters tend to be low-information, knee-jerk Springfield-from-The-Simpsons types, and the Republicans have lashed their crazy trains to this new wave of inchoate road-rage to help sweep them into more congressional seats.

Here are a few of the ongoing economic conditions facing a vast majority of Americans, many of whom are all revved up to vote Republican in November. According to Michael Snyder of the Business Insider:

• 61 percent of Americans “always or usually” live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.

• 66 percent of the income growth between 2001 and 2007 went to the top 1 percent of all Americans.

• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.

• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.

• In America today, the average time needed to find a job has risen to a record 35.2 weeks.

• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.

• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.

Oh, and the Center on Budget and Policy Priorities reported that wages for the highest 20 percent of earners rose by nearly 300 percent since 1979, while wages for the bottom and middle 20 percent increased only by 41 percent — combined. Plotted on a graph, middle and working class wages have flat lined for 30 years. Roll all of these tragic figures into a slow growth recovery and here we are. Most of us in the middle class are screwed.

And thanks to an alliance between the Republicans (which includes the tea party), the increasingly dominant far-right media, a traditional “old media” that panders to the far-right, and right-of-center “conservadems” who pander to the Republicans, too many voters have decided that the Republican Party might be better suited to turn all of this around.

The big lie here is that if Congress stops spending, cuts the deficit and makes permanent the Bush tax cuts, especially the tax cuts for the wealthiest Americans, our problems will be solved — even though these concepts are in direct conflict with each other. Not surprising given the ever-lengthening Republican syllabus of contradictions.

Here’s how this new batch of contradictions plays out.

According to Republicans and their conservadem enablers, we have to cut the deficit and pay for every program Congress passes or else we’re all doomed. We’re stealing from our children, they say. This has manifested itself in Republican filibusters of both unemployment benefits ($34 billion) and a new jobs bill ($33 billion over ten years). A Republican filibuster killed the jobs bill, and, after many failed cloture votes, the filibuster of the unemployment benefits was finally defeated and the Senate Democrats passed the extensions. Throughout the past year and a half, it’s been the same story. Any effort made by the Democrats to stimulate the economy has been filibustered by the Republicans. They say it’s because of the deficit and debt.

And yet they want to make the Bush tax cuts permanent, which would add $678 billion dollars to the deficit — and that’s just the cost of the tax cuts going to the top two percent of earners. In other words, the Republicans want to spend $678 billion in further giveaways for the wealthiest two percent, and they don’t care whether it increases the deficit.

By the way, the Republicans also recently voted against and defeated an amendment to strip Big Oil of its $35 billion in subsidies. Just thought I’d pass that along. Put another way, $678 billion in tax cuts for the wealthy? No problem. Deficit-shmeficit! But $34 billion in unemployment benefits for an out-of-work middle class at a time when companies aren’t hiring (say nothing of the aforementioned bullet-points)? Evil! Instead, the Republicans want to give $35 billion to Big Oil in the form of corporate welfare during the worst oil spill in American history while telling unemployed middle class families to piss off.

Do we have a clear picture in terms of who and what the Republicans care about?

It surely isn’t fiscal discipline or the deficit. And it surely isn’t the middle class. The Bush tax cuts, if extended, would add $2 trillion to debt, so it’s not that either. Throw in another policy started by the Republicans — the war spending (more of which was passed yesterday without any worries about CBO scoring or making sure it’s deficit neutral) — and there’s the vast majority of your deficit and debt for the next ten years. Not the stimulus or the bailouts. The long term budget impact of the wars and the Bush tax cuts literally dwarf the stimulus. Here’s the CBPP evidence in colorful graph form:

That big blue chunk represents the Bush tax cut portion of the deficit. The yellow represents the wars. The light blue is the tax revenue lost to the recession. And those really narrow tan and red strata are TARP and the stimulus. Clearly we need to elect more Republicans so they can make permanent the big thick deficit hogs and kill that thin section for the stimulus.

Now, if you’re a Republican, you might be clinging to the idea that extending the Bush tax cuts would have a stimulative effect on the economy (somehow) even though this hasn’t been the case for the last ten years other than for the wealthiest Americans who have once again disproved the trickle-down theories at the heart of Reaganomics by pocketing their share of the trickle instead of reinvesting in jobs and wages for the middle class.

The Bush tax cuts will not stimulate the economy.

According to Moody’s Analytics (hardly a left-wing apparatchik), for every dollar of government money spent on extending the Bush tax cuts, there’s only a 32-cent return on investment in terms of economic stimulus. Not a solid investment. How about cutting the corporate tax rate? Also a 32 cent returns in economic stimulus. Capital gains tax cuts? 37 cents. And, lumped together, there’s your Republican plan for growing the economy. Dumb investments. Goldman Sachs would short these policies. I’m not sure they haven’t, actually.

But what about the Democratic spending? For every dollar spent on unemployment benefits, there’s a $1.61 return in economic stimulus. Good investment! How about infrastructure spending? $1.57 return. Aid to the states? $1.41. Temporary increase in food stamps? $1.74. Even the Obama tax credits for the middle class, $288 billion of the Recovery Act, account for up to $1.30.

Meanwhile, the Obama administration is working with a deficit commission which will focus on trimming the deficit after (we hope) the economy and jobs are back on track. The Republicans, of course, voted against forming a deficit commission.

Given the choice between deficit spending that significantly stimulates economic growth or deficit spending that barely makes a dent, which choice are the Republicans trying to sell? The really stupid deficit spending for the wealthy that barely makes a dent in the recovery. That’s the Republican plan.

Also, contrary to popular far-right myths, it’s worth noting that the Democrats and the White House have no intention of allowing the tax cuts for families earning less than $250,000 to expire. Those tax cuts will be renewed this year. As for the top tax brackets, you find me a multi-millionaire who pays the actual marginal rate every April and I’ll show you a very rich moron. Most of these guys, after deductions and loopholes, pay an effective tax rate that’s much lower than the middle class tax brackets. So don’t tell me that millionaire Glenn Beck and millionaire Paris Hilton will be financially burdened by a 2.6 percent bump in their margin tax rate next year. Sorry, no. They won’t be. And why do middle class Republican voters give a rip about Paris Hilton’s tax rate? Because they believe they’ll be as wealthy as Paris some day. But read those bullet-points again. It’s not happening.

Unless there’s some sort of mass epiphany, or unless the Democrats actually speak up and take the discourse by the horns and fight, middle class American voters in November will augment the number of Republicans (and conservadems) in Congress mostly because they’ve been suckered into endorsing these insane Republican economic policies. Subsequently, the Republicans will balloon the deficit and undermine the economic recovery in order to give more handouts to the super rich. And the middle class will continue to be an accomplice in its own slow-roasted homicide.