The steady robbery of peoples' hard work has taken place over the past five decades, with the pace accelerating over the past twenty years. What this robbery does is basically squeeze people so hard that their lives become a shaky, volatile daily existence. Proof of the class warfare isn't hard to find.
Yesterday, you could read this piece, "Basic Costs Squeeze Families" (subscription):
The American middle class has absorbed a steep increase in the cost of health care and other necessities as incomes have stagnated over the past half decade, a squeeze that has forced families to cut back spending on everything from clothing to restaurants.
Health-care spending by middle-income Americans rose 24% between 2007 and 2013, driven by an even larger rise in the cost of buying health insurance, according to a Wall Street Journal analysis of detailed consumer-spending data from the Bureau of Labor Statistics.
That hit has been accompanied by increases in spending on other necessities, including food eaten at home, rent and education, as well as the soaring cost of staying connected digitally via cellphones and home Internet service.
With income growth sluggish, discretionary spending on things like clothing and movies, live shows and amusement parks has given way.
The data—drawn from 14,000 households that either keep diaries on their spending for two weeks or agree to quarterly interviews—helps explain why so many retailers are turning in persistently lackluster results, and why the household-products business has shown virtually no growth for years. It also helps illuminate why the consumer-led U.S. economy has been so slow to rebound from the financial crisis.[emphasis added]
You think? It's something that I and many other have pointed out:
when you have an economy powered mostly by consumer spending and people don’t have money to spend, shit won’t get bought…is this not obvious? Whether it is a good thing that 60-70 percent of the economy is driven by buying more stuff is an important topic but, right now, that's the real world.
The Fed showed this, as I wrote here:
Families at the bottom of the income distribution saw continued substantial declines in average real incomes between 2010 and 2013, continuing the trend observed between the 2007 and 2010 surveys.
And:
For the median family with debt, debt burdens also fell between 2010 and 2013: Leverage ratios, debt-to-income ratios, and payment-to-income ratios all fell. The fraction of families with payment-to-income ratios greater than 40 percent declined below the level seen in 2001.
And:
Retirement plan participation in 2013 continued on the downward trajectory observed between the 2007 and 2010 surveys for families in the bottom half of the income distribution.
And, today, we got more from
U.S. Financial Diaries which "tracked every dollar earned, spent, borrowed, saved, and shared by 235 low- and moderate-income households in five states". What it found
was:
In the Diaries’ research, nearly all of the 235 households studied experienced a drop in monthly income of at least 25 percent in a single year. The main culprits were reduced work hours, health problems and shifts in household size, like a needy relative coming to stay.
“Low pay is also unsteady as well,” said Jonathan Morduch, who oversees the diaries’ project. “This is a hidden inequality that often gets lost.”
That strain explains why more than three-quarters of those surveyed said financial stability was more important than moving up the income ladder.
And
the story of one family:
Across the country, nearly seven million people working part time would prefer full-time jobs but can’t find them. While their numbers are down from the peak a couple of years ago, these involuntary part-timers still account for 4.5 percent of the labor force, compared to an average of 2.7 percent before the recession.
Here in northern Kentucky, the Vories not only turned to the Brighton Center for food, they also applied for federal mortgage assistance, timed payments to grace periods, borrowed from family and relied on their church and friends.
They reluctantly cashed in Mr. Vories’ 401(k) retirement account, absorbing the 10 percent penalty in return for a much-needed $4,500. And they borrowed a total of $2,500 from their bank at a 10 percent interest rate.
“You think, ‘How can you afford that?' ” Mr. Vories said, “but because it’s getting our bills paid, you do.”
None of that was necessary when Mr. Vories was steadily earning $425 a week. Fidelity matched his weekly 401(k) contributions and offered good health insurance that covered most of the medical bills from 9-year-old Caleb’s severe ADHD and 6-year-old Josh’s mild autism.
They could afford the occasional night out with dinner and a movie. He was a few months away from the seven-year mark and a bump up in pay and vacation days, when he lost his job in February 2013.
Over the next 10 months, Mr. Vories said he applied for 75 jobs. Nothing.
Last December, he received a letter promising a three-month extension of his unemployment insurance, so he and Erica bought Christmas presents for the boys, a little Fender guitar for Caleb, and a drum set for Josh. But then congressional Republicans and Democrats deadlocked and no extended benefits were approved.
The take home pay for Ms. Vories, 34, took a hit because she had to buy health insurance for the family. She signed up for a higher-paying night shift from 10 p.m. to 6:30 a.m., hoping to make up for the unexpected loss of her husband’s unemployment insurance check. Despite the extra $250 a month, she had to stop after five months.
“You’re basically a zombie,” Ms. Vories said. “I saw the boys basically on Saturday, and you’re just playing catch-up.”
They reduced their church contributions. During the winter, they turned the heat down to 64 degrees. “We had one little space heater, and we would take it to whatever room we were in,” Mr. Vories said.
Still, the bills piled up. “We would get one week behind, then we would get two weeks behind, then three weeks behind,” Mr. Vories said.
Mr. Vories’s job with the I.R.S. during tax season brought home $375 a week, but it lasted only six weeks. Thanks to help from the Hardest Hit Fund, a temporary federal mortgage assistance program, they avoided losing their home.
They kept the house, but didn’t have enough money to fix the central air-conditioning that quit right before the temperature shot past 90 degrees. They closed off the family room downstairs because of the sweltering heat. Parishioners at their church lent them a couple of window units.
A few weeks later, the Vories’s 2002 Toyota Corolla quit on their way back from a church tent revival meeting. With only one car, Ms. Vories had to stop working the early shift, which had allowed her to be home in time to meet the school bus. Mr. Vories’s mother pitched in to babysit.
In September, Mr. Vories stopped by LaRosa’s pizzeria, where he got his first job at 15, washing dishes after school. He was overjoyed to hear they needed a delivery driver.
But then in mid-October, as they we were driving home from visiting family, their Nissan van was totaled in a car accident. It was a heartbreak, because they had just poured in more than $1,000, given by Ms. Vories’s parents, in repairs.
“It just feels like money down the drain,” Mr. Vories said, shaking his head.
Proud of an above-average evaluation at the I.R.S., Mr. Vories said he was hopeful he would be rehired after the new year for seasonal work, which could ultimately turn into a full-time job.
In the meantime, Mr. Vories is delivering pizzas, using his parents’ Mercury Grand Marquis.
[emphasis added]