4 Shocking Examples of the Decline of the Middle Class

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Every three years, the Federal Reserve takes a break from abstract studies filled with hieroglyphics to ask Americans that simple question. It's called the Survey of Consumer Finance, and its latest report makes one thing clear: The American middle class is sick as a dog.

The report, which covers the year 2010, is painstakingly detailed. I combed through the tables and pulled out data for those in the 40th to 59th income percentiles -- call it middle-class America.

What it shows probably won't surprise you -- I think most of us are numb to bad news -- but as one analyst put it, this is "the most important story in America" right now.


Let's start with real (inflation-adjusted) incomes:

Source: Federal Reserve.

From 1989 to 2010, the U.S. economy grew by 66% (measured by real GDP). But real incomes for middle-class Americans essentially stagnated during that time, from $41,000 in 1989 to $43,000 in 2010. Things had looked better earlier in the 2000s, but most income gains that took place in the 1990s were wiped out in the last few years. For the 1998-2010 period, the economy as a whole grew by about 28%, but middle-class family income was unchanged. In his book The Great Divergence, Timothy Noah adds stark detail: "From 1980 to 2005, 80 percent of the total increase in Americans' income went to the top 1%."

The story for real middle-class family net worths is even bleaker:

Source: Federal Reserve.

There's your American dream, folks. Two decades of prosperity when real GDP grew from $7.8 trillion to $13 trillion, and the net worth of middle-class American families went... down by 7%. Pundits these days ask in worry if we're facing a lost decade. Most Americans have already been through two (and counting).

Not surprisingly, the housing bust is responsible for most of the decline in net worths. Many of those wounds came about through greed and temptation -- households borrowing more than they could ever afford, buying a second home to flip, zero-interest mortgages... you know the story. The takeaway from that is that the housing-driven net-worth gains from 2001 to 2007 were fictitious, meaning the 2010 figures in this chart are probably the most realistic of the last decade. The temporary rise, not the sudden decline, is the outlier here.

And how are families doing rebuilding their net worths? Awful. This chart shows the percentage of middle-income families who reported they could save anything in the previous year:

Source: Federal Reserve.

Even this masks the pain. More than 35% of Americans who save say their primary motivation for saving is "liquidity," which the Fed notes "is generally taken to be indicative of saving for precautionary reasons." The percentage claiming to save for investments fell from 8% in 1989 to 1.2% in 2010, and those who said they were saving for education dropped from 11% in 1998 to 8.2% in 2010 (though that might reflect a change in the composition of households). Not only are fewer middle-class families saving, but more of their saving is preparing for something bad to happen, not investing for a better life.

Last up, consumers as a whole have made big strides shedding their debt over the last few years (largely by defaulting on it). But that doesn't appear to be the case for the middle class:

Source: Federal Reserve.

Bear in mind, this is only through 2010. The figures are probably better today as mortgage defaults continued over the last two years.

When taken as a whole, this data contradicts other sources that show a sharp decline in debt-to-income ratios. Why the difference? It's likely that some consumers have cut a lot of debt while the median has only begun to deleverage. A recent report by the consultant group McKinsey reckoned that U.S. consumers could shed enough debt to be healthy and sustainable by as early as next year. The Fed's report might add a twist to that: Some consumers could be healthy by next year, but most probably won't be.

So, what's this all mean? I'd keep a few things in mind.

The economy as a whole hasn't done great over the last two decades, and what growth has occurred has been concentrated to a very small group. Most Americans have, at best, stagnated for the better part of two decades.

Should we be upset about that? The short answer is no, but there's an important qualifier. Everyone should want inequality of outcomes -- those who work the hardest and make the best decisions should earn the most, and vice versa. Where it gets ugly is when there's inequality of opportunity. That's where there's room to scoff at the status quo. The United States has one of the lowest rates of income mobility -- the ability to be born poor and become rich -- in the developed world. In 2001, Fed economist Bhashkar Mazumder calculated that "income elasticity" in the U.S. is 50% to 60%, meaning that if a father earned $1 more than average, his children could expect to earn $0.50 to $0.60 more than average. This isn't surprising: Education has a big effect on future earnings, and having rich parents makes it easier to get a good education. Amazingly, Mazumder found that incomes among brothers are more correlated than height or weight.

On the other hand, all of these numbers need to be kept in context. Comparing the well-being of Americans to other Americans can be shortsighted in a world of 7 billion people -- particularly in a world that is increasingly globalized. You need to earn just $34,000 a year to be part of the richest 1% of the globe -- and that's adjusted for the difference in living costs around the world. According to the U.N., nearly half the world's population, 2.8 billion people, earn less than $2 a day. And according to the World Bank, 95% of those living in the developing world earn less than $10 a day. "Struggling" is a relative concept. Keep that in mind next time you ponder the plight of the American middle class.

Check back every Tuesday and Friday for Morgan Housel's columns on finance and economics.

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Follow him on Twitter @TMFHousel. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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  • Report this Comment On June 15, 2012, at 2:45 PM, TheDumbMoney2 wrote:

    I know this is absolute mainstream economic heresy, on both sides of the political aisle, but while many have spent the last three years questioning fiat money, I have spent the last years beginning to criticize free trade.

    I wonder if the economic model that underpins it is as flawed and simplified as so many others have proved to be. Or, I wonder if free trade agreements have not adequately taken account of "unfair" policy-related (work rules, environmental, etc.) divergences in production cost that have done grevious harm to our country.

    Overall, the key is, WHY do various countries make specific goods "better," in the economically-modeled "everybody wins" scenarios. Is it because they really do make the goods better, with higher productivity? Or is it just because they are willing to make fifteen-year-olds work fifteen hours per day and we are not?

    And if we are ok with the this even though it is the latter, then free trade as a lot of it exists is really just somewhat of a libertarian wetdream designed to undermine any country-specific regulations. Capital benefits, because it can flow to the lowest-common-denominator, and highly-educated people benefit because, so far at least, our jobs cannot be outsourced as easily, but our middle and lower classes get hosed by a system that supposedly "protects" them with all kinds of regulations, yet similtaneously makes it easy and incentivizes the sending of all of their jobs to other countries that don't have those regulations.

    The conservative solution of course is to cut all of our regulations. But is that really what we want? Do we want Beijing levels of air pollution? Do we want people in our factories to be treated like ants, worked sixteen hours/day, and woken up at 4 start working again if Steve Jobs changes the specification on an a new iPhone at the last minute? If you would want that, would you like your own job to work that way, whatever it may be?

    Cheaper flatscreen TVs seem to be cold comfort for all of this.

    I'm not saying I'm a protectionist now, but I think the models, at least as I understand them, are deeply simplistic and short-sighted.

  • Report this Comment On June 15, 2012, at 2:54 PM, seattle1115 wrote:

    "Everyone should want inequality of outcomes -- those who work the hardest and make the best decisions should earn the most, and vice versa."

    Well, yes - up to a point. There comes a point, however, at which inequality of outcomes is so widely divergent, and so narrowly focused (that is, a small number of people doing extremely well and a large number of people doing poorly) that it becomes de facto evidence of a systemic unfairness, which ought to be intolerable. It's the worst expression of the inequality of opportunity you decry. Also, it's a political powder keg. A democracy in which there is an unfair inequality of outcomes - in which the game is rigged, plainly said - cannot be sustainable. And, while the world is certainly not a democracy, I am not sanguine about the future of a world in which inequality of outcomes is so widely divergent and narrowly focused. On a practical level, in the interest of simple survival, I think we need to be very wary of inequality of outcomes. As you say, they are a good thing - but we all know about the problem of too much of a good thing.

    Another excellent, thought provoking article, Mr. Housel!

  • Report this Comment On June 15, 2012, at 2:56 PM, TMFMorgan wrote:


    In hindsight, "those who provide the most value should earn the most ..." may have been better wording.



  • Report this Comment On June 15, 2012, at 2:58 PM, seattle1115 wrote:

    @TheDumbMoney2: It seems to me that a big part of the problem is that "free trade" refers to free passage of capital across borders, but no such freedom for labor. I have come to believe that the operation of "free trade" agreements, along with other factors (tax policy being another big one) have served to distort the market, leading to an overvaluation of capital and an undervaluation of labor.

  • Report this Comment On June 15, 2012, at 3:30 PM, TheDumbMoney2 wrote:


    Well, I think we mostly agree on the problem.

    However, free trade is not about capital, at least in the investment sense. You can allow capital to flow all over the place, yet not allow people to import certain commodities or finished goods into your country (as all countries do to some extent, and Japan and South Korea are somewhat famous for). Alternatively, you can allow many imports, but not allow capital to flow out (China is a good example of a country with significant capital controls, particualarly relating to currency-exchange).

    I assume free movement of capital, because you cannot really have floating exchange rates without that. And I like floating exchange rates. But my problem is what I feel is a pendulum swinging too far in the direction of tarriff-free or low-tarriff imports, even where other countries from whom we are importing have vastly weaker regulations. I'm deeply uncomfortable with my own inclinations here, because they go against Econ 101, but I think there has been a general failure in the modelling to distinguish between: 1) divergences in realy productivity/ability/resources that make one country more able to produce a good; and 2) divergences that really just the result of one country treating its people and/or environment, or the world environment, much more poorly.

    I fear we are about twenty to thirty years into a global experiment in which we have not struck the correct balance. I take no extreme position one way or the other.

  • Report this Comment On June 15, 2012, at 3:43 PM, whereaminow wrote:

    If we had such a thing called "free trade", it would not be accompanied by thousands of bureaucrats and millions of pages of regulations.

    We have "managed trade." As does every other industrialized nation.

    David in Liberty

  • Report this Comment On June 15, 2012, at 4:44 PM, Tomohawk52 wrote:

    I think it is pretty easy to rise up from the bottom, at least here in Canada. Surely the key is the same in the US: don't fall into the consumption trap. I see all sorts of people around me smoking cigarettes, drinking expensive coffees, buying their groceries at the corner store and insisting they "need" I-whatevers to stay connected. If they didn't do those things their net worth would be far higher, but they obviously aren't interested so pretty much get the life they want from the choices they make. Same with people spending 400% of their net worth on housing. It didn't end well down there and it won't end well up here.

  • Report this Comment On June 15, 2012, at 6:25 PM, lukascranac wrote:

    The article forgets to mention population growth. between 1980 and 2010 about 35%.

    So 66% GDP growth feeds 35% more people. Looks a lot less severe.

    The effects of globalization on wealth distribution is hard to quantify. A lot of money are made oversees and stays oversees but controlled by US companies.

    Because of that we can say a certain chunk of the money the super wealthy earn is made and redistributed completely outside of the US. If you ask me that has to be a large chunk in a globalized economy.

    When Apple reports earnings they say 40% of their income is from oversees. Apple creates jobs oversees, makes profits oversees, and keep profits oversees and even a lot of Apple shareholders live oversees. Apple is an international company not a US company. And most big companies are like that. So when we try to comprehend how much money Tim Cook makes we must consider he earned that by running a company that is all over the globe.

    The super wealthy are making their money on an international scale while the average american laborer must compete on an international level.

    The result is opposing effects for the two groups. The super wealthy can make more money while the average American has to be satisfied with less since his job can be moved to a cheaper country.

    Finally the teaches you how to make money without working. A lot of the super wealthy make their money by NOT working. Compering income generated from work and income generated from investments is unfair. Those who work will always lose that game.

  • Report this Comment On June 15, 2012, at 8:12 PM, JayMoe wrote:

    This statement "those who work the hardest and make the best decisions should earn the most, and vice versa." is true. Then why has it not been the case for the last 20 years? The bank CEO's who managed the firms that helped sink our economy obviously did not make the "best decisions" yet many are still at the helm of their companies and getting multi-million dollar bonuses for their failures.

    "80 percent of the total increase in Americans' income went to the top 1%". Does that imply that the top 1% did 80 % of the work?

    This word "inequality" and this statement "what growth has occurred has been concentrated to a very small group" are the two key points of this article. For a real understanding of why the middle class is doing so poorly one need only read "Winner Take All Politics" How Washington Made the Rich Richer - and turned its back on the Middle Class by Jacob Hacker and Paul Pierson. Read it, form your own opinion, but income inequality did not happen by accident and it is not all due to the economy.

  • Report this Comment On June 15, 2012, at 9:29 PM, JGBFool wrote:

    "So 66% GDP growth feeds 35% more people. Looks a lot less severe."

    Consider another important detail from the article, though-- ""From 1980 to 2005, 80 percent of the total increase in Americans' income went to the top 1%.""

    66% GDP growth X .2 = 13% of the GDP growth is going to feed 35% more people.

    That looks a lot more severe.

  • Report this Comment On June 15, 2012, at 9:31 PM, theurbanhippie wrote:

    "According to the U.N., nearly half the world's population, 2.8 billion people, earn less than $2 a day. And according to the World Bank, 95% of those living in the developing world earn less than $10 a day. "Struggling" is a relative concept. Keep that in mind next time you ponder the plight of the American middle class."

    If you can't feed your children in Africa you have help from a number of private, international charities devoted to making things better.

    If you were a working couple who had a child in 2009 and got laid off within 3 months of your first child's birth, you got nothing but a small severance pay and UI benefits. No charities came rushing to help, you sold off your belongings to make up for the loss of income and you fret every night whether or not your child will have access to decent medical care. You'd go back to school but for what? Most of us already have a degree and years of experience.

    So please, watch it when you make sweeping generalizations about the term "struggling" and the American middle class.

  • Report this Comment On June 15, 2012, at 10:25 PM, TMFMorgan wrote:

    Those pointing out that real GDP per capita would have been a better comparison are totally correct -- thanks for pointing it out. Although it doesn't diminish the argument that much. Real GDP per capita grew 41% from 1989-2010, compared with a 7% drop in middle-class net worths and 4% rise in middle-class incomes.

    Have a good weekend,


  • Report this Comment On June 16, 2012, at 3:29 AM, kyleleeh wrote:

    <<If you can't feed your children in Africa you have help from a number of private, international charities devoted to making things better.>>

    WOW! And all this time I thought those swollen disdended bellies were the result of starvation. Turns out their just all getting fat from all the social saftey nets that are available to poeple in Africa, while your poor deprived American children suffer...shame on them for having it so much better then you.

  • Report this Comment On June 16, 2012, at 3:43 AM, lukascranac wrote:


    Consider another important detail from the article, though-- ""From 1980 to 2005, 80 percent of the total increase in Americans' income went to the top 1%.""


    This is a conclusive statement, not a fact.

    I'am not arguing the growing inequalities. What I am trying to say is that the American middle class is loosing to a rising middle class elsewhere around the globe. While the super wealthy Americans earn their money by owning global operations.

    Trying to view these developments solely in a US context is going to give the wrong answers.

  • Report this Comment On June 16, 2012, at 3:45 AM, BiotechMarc wrote:

    The problem in the whole analysis is the uneven destruction of wealth in 2008, particulary when looking at net worth statistics. The destruction of was focused on housing, which has not recovered, and not on stocks, which have recovered. Where does the middle class have the majority of its wealth? Mostly in a home. Where do the rich park their wealth? Mostly in stock and very little in housing. Middle class wealth fell and never recovered. The wealth of the wealthy fell further initially, but recovered since.

    The issue is that with limited capital to allocate, the middle class has not been well diversified. One can argue that the regulatory distortion of the housing market exacerbated this.

  • Report this Comment On June 16, 2012, at 7:34 AM, lesailes wrote:

    In general, what a delightfully thoughtful group of comments without the usual political hysteria! I wish all potential commentators would read this and think before producing the usual mindless platitudes..

  • Report this Comment On June 16, 2012, at 7:46 AM, matthewluke wrote:


    Yep. When you are a middle-class family and own a $300,000 or so home, it is difficult to sufficiently diversify your net worth away from the housing market. Your home is most likely going to be your single-largest asset (and largest by far). If you are a middle-class homeowner, there isn't much getting around that. Diversification of stocks and other asset classes is a must of investing, but it is difficult as hell for your average home-owning family to diversify away from the housing market.

    Seemingly a good argument for more of a home-rentership society. I've never owned a home and I'm not exactly sure if I ever want to (specifically because of, as you mentioned, my limited amount of capital to allocate sufficiently into other asset classes).

  • Report this Comment On June 16, 2012, at 12:39 PM, JackCaps wrote:

    The first bar chart has a title of "Average middle-class net worth". The ordinate label is Median net worth (thousands)". So which is correct? The statistic terms of average (or mean) and median are different. I suspect the the ordinate label's usage of median is correct term for the data depicted in the this chart.

    Can this be clarified?

  • Report this Comment On June 16, 2012, at 12:54 PM, TMFMorgan wrote:

    ^ The figures represent the mean net worth of those in the 40-59th income percentile, so in a sense it's the mean of a median group. Sorry it was confusing, and hope that helps.

  • Report this Comment On June 16, 2012, at 2:19 PM, kbeck02 wrote:

    I suppose if we took our $34,000 a year and moved to India or China we would be sitting pretty. However, if we moved to either of those two places we wouldn't be earning $34,000/year, would we?

    I admit, I am shortsighted. You see, I live in the USA, not some other third world country.

  • Report this Comment On June 16, 2012, at 2:36 PM, GordonsGecko wrote:

    Comparing Americans to the rest of the world at the end of this article is a cop out. Regardless of what the rest of the world is doing, the top 1% are taking all of the wealth out of this country and hoarding it for themselves. Democracy is a farce. It does not exist. The rich (people and corporations) control politics and politics control the ability for us to enact change.

    It's going to get a whole lot worse before it gets better.

  • Report this Comment On June 16, 2012, at 5:14 PM, NotJesseL wrote:

    seattle1115 wrote ""Everyone should want inequality of outcomes -- those who work the hardest and make the best decisions should earn the most, and vice versa."

    OK, maybe I can accept inequality of outcomes, but what about inequality of opportunity? That is a huge problem in the US and its getting worse.

    A recent study showed that 65% of people born and raised in the top 20% of net worth households ended up in (Drum roll please), the top 40% of net worth households.

    And the 42% of the bottom 20% ended up staying there in the bottom. Here is the link:

    So, the idea that wealth is a reward for good decisions and smart behaviour is more of a myth here in the US than in Canada, and Western Europe. What matters most here - who you know, starting with your parents.

  • Report this Comment On June 16, 2012, at 5:45 PM, devoish wrote:

    <<OK, maybe I can accept inequality of outcomes, but what about inequality of opportunity? That is a huge problem in the US and its getting worse.>> - NotJesseL

    I agree, from the somewhat advantaged side of the equation. My son could be the poster child for a successful early intervention program, and I was helped financially by a school district that provided such programs. Five blocks over, those parents have to pay out of pocket. So now I have three thousand dollars in my pocket that they do not have, and 15 years later I can afford to spend $2k on "Princeton Review" and get a 175 point boost on each of my kids SAT score. And now they are accepted to RPI and BC. My less well off neighbors kid struggled through elementary school, took the lowest level courses in HS and is not even going to SUNY.

    His school district should have been equally well funded and able to provide similar services, just as Steve Jobs was lucky to have been in a school that provided computers. The best operating system might still be un-invented simply because the most capable designer was not in the lucky school district.

    Now I could say that I "earned" my school district in the market by being able to afford housing in it, but the opportunity cost to society of such a line of thinking that does not insist on providing the best opportunity equally, is immeasurable.

    Best wishes,


  • Report this Comment On June 16, 2012, at 6:04 PM, damilkman66 wrote:

    There has been a lot of debate about inequality of opportunities. I live in the State of Michigan which has depended very heavily on manufacturering. What is very sad is the fathers and mothers did not push their children to get an education and thought that their children would follow in their footsteps. They thought manufacturing would be around forever.

    Have people considered the possibility that the reason that smart people who get wealthy push their children to take the same path that worked for them aka get educated?

    I firmly believe that equality of opportunity is there for everyone in the United States. The problem is not everyone seizes it. If you insist on not learning any skills or not learning harder skills that are rare, you will not do so well in a global economy. Manufacturing and construction has been the basis of Michigan's economy for a long time. Unfortunately, if it does not require skilled labor to do it, the value will go down.

  • Report this Comment On June 16, 2012, at 6:07 PM, TMFMorgan wrote:

    I'd like to second that there are some very good comments here. Thanks, everyone.

  • Report this Comment On June 16, 2012, at 6:59 PM, crca99 wrote:

    I appreciate the global perspective. Personally, I don't know anyone in the US top 1% and feel poor as result. Now I realize that I'm in the world's top 1%.

  • Report this Comment On June 16, 2012, at 9:16 PM, rbraseth wrote:

    Thank you all. I know where to come to for a serious discussion where all ideas are at least worth thinking about. Up until today, I've only regularly posted on the Wall Street Journal boards. Man, talk about nasty, partisan and angry people.

    America, it seems to me, has a new class of citizens and it falls between the middle class and the working poor. The following is anecdotal notions of what it used to mean to be middle class.

    * If the car broke down, it might hurt a little, but the hurt didn't last for six months.

    * The middle class bought a new car every 5-6 years.

    * Middle class families went on two week vacations.

    * Middle class families did not immediately look on the top and bottom shelves at a supermarket for the cheapest off-name brands.

    * Middle class families usually had one breadwinner, the father, and he worked at the same company for 30 years and showed great pride in his work. (My grandfather working at Nabisco for instance when it wasn't part of a multi-national.

    * The middle class did not view health insurance as one of the top two reasons to take a job.

    * The middle class for the most assumed the government was taking care of their interests.

    * The middle class didn't worry on a daily basis about the future or about retirement.

    I am one of 10 Children. Seven of us have dropped from the middle class to that class between working poor and middle class.

    One last comment. None of my brothers or sisters is a union member, but I wonder why they have been vilified. The unions had a significant role in helping produce a robust middle class.

    Most people I know think we are watching the decline of the empire.

  • Report this Comment On June 17, 2012, at 1:29 AM, kyleleeh wrote:


    I hate to say it but I think that doing a lot of the things on that list are what contributed to the downfall of the middle class.

    My income puts me above the 40-59th percentile mentioned in this article and I only take a one week vacation a year, I always look on the bottom isle for bargains, my last car lasted me 10 years and I have NEVER assumed the government was looking out for me. I don't do these things because I have to, I do it because I was raised to believe that living below your means is the key to prosperity, living above their means has been the key to the middle class downfall.

  • Report this Comment On June 17, 2012, at 7:11 AM, Gregory63 wrote:


    "My income puts me above the 40-59th percentile mentioned in this article"

    Our condolences for sure.

    "I was raised to believe that living below your means is the key to prosperity"

    How's that working out for you so far?

    Seriously. Have you done the retirement math yet? How much will you have to save to retire on the meager income you have now assuming you have no social security?

  • Report this Comment On June 17, 2012, at 11:58 AM, kyleleeh wrote:

    How meager is my income? I never stated what percentile I'm in, only that it's above the level that the article describes as middle class. I was also raised not to go around telling people how much you make.

    How is living below your means working? Fantastic, Mostly because I stayed out of debt, and rented a cheap apartment when everyone else was buying 400k homes.

    How much will I need to save to retire with no SS? About 10% from both mine and my Wife salaries, less if you factor in both of our pensions.

    Why do you think you would get no SS? Even the worst case scenario for SS still has 70% of whats owed to you being paid out.

  • Report this Comment On June 17, 2012, at 12:02 PM, Mark1727 wrote:

    To use a hackneyed: cliché the rich get right and the poor get poorer. CEO's aren't starving that's for sure.

  • Report this Comment On June 17, 2012, at 12:09 PM, skypilot2005 wrote:

    “Everyone should want inequality of outcomes -- those who work the hardest and make the best decisions should earn the most, and vice versa. Where it gets ugly is when there's inequality of opportunity..”

    “Education has a big effect on future earnings, and having rich parents makes it easier to get a good education.”

    There are barriers to receiving a good education but, they are not insurmountable.

    We are responsible for our choices in life. They have consequences. This needs to be communicated more effectively by some parents, educators and our elected officials.


  • Report this Comment On June 17, 2012, at 1:22 PM, JackCaps wrote:

    The Federal Reserve Bulletin from June 2012 that was apparently referenced by this article can be found at The Federal Reserve publishes these surveys in three year increments, so the next report will probably be published in 2015 for the 2010-2013 time period.

    The data in this Bulletin was also reported on by the Wall Street Journal with their 6/11/2012 article titled "Family Net Worth Fell Almost 40% Between 2007-2010" (

    The WSJ perspective in which the focus was on the 2007-2010 time period is rather different than the two decade (1989-2010) time period focus of the Morgan Housel's observations: "The economy as a whole hasn't done great over the last two decades, [...] Most Americans have, at best, stagnated for the better part of two decades."

    So which perspective is more appropriate for the latest three year survey published by the Federal Reserve?

    I'll let the readers review original sources and let them decide how to answer that question.

  • Report this Comment On June 17, 2012, at 3:52 PM, hbofbyu wrote:

    So called "free trade" has caused more U.S. jobs losses than gains, especially for higher-wage jobs.

    Most free trade agreements are patchwork and bad deals for the U.S. worker. The lack of international laws like minimum wage, health care, or environmental protection, for example, encourages firms to go to the nation with the weakest standards and the cheapest labor.

    I work for a publicly traded technology company. Last quarter we hired 100 people in India and Thailand while we laid of 75 people here in the US. Simple cost cutting. Our company is growing - but not from an American perspective.

    On a macro scale it is simple: If all manual labor is equal, high priced labor markets will fall while low priced labor markets will rise. They will meet in the middle; and there is your new "middle class".

  • Report this Comment On June 18, 2012, at 9:32 AM, esbita wrote:

    I am reminded of the well-known quote from Neal Stephenson's "Snow Crash.."

    " ..once our edge in natural resources has been made irrelevant, once the invisible hand has taken all those historical inequities and smeared them out into a broad global layer of what a Pakistani bricklayer would consider to be prosperity... "

  • Report this Comment On June 18, 2012, at 4:35 PM, TMFDarwood11 wrote:

    The underpinning for the article seems to be the decrease in net worth for the middle class in the past 10-20 years. I won't argue about that.

    However, not everyone's middle class net worth has decreased. Anyone in the middle class who lived beyond their means probably has experienced a lot of financial pain. Particularly if they jumped into the housing bandwagon "all in.". As they have discovered, a larger house means higher payments and higher real estate taxes and may include higher utility bills. Add that to a decrease in value and Ouch! When buying a house, I have long argued that it's crazy to put appliances with a 10-15 year life on a 30 year mortgage and pay for them plus interest for that 30 years.

    Thank God the children got it!

    The argument against was "I'll sell in 5-10 years, so who cares!" So pay the interest on the debt to service those appliances and then flip? It's like ignoring how much one can save if they drive a car for at least 150,000 miles or 8 years, whichever comes first. Then compare that to buying a new vehicle every 5 years. Or how about assuming one can drive it into the ground? I've done the numbers and I've kept the statistics on my vehicles. I'm a convert!

    I am always impressed by the amount of time people will take to attempt to figure out the next 10-bagger (or for many of us, their first), while ignoring the amount of money which is leaking out of that sieve we call "our personal financial plan."

    Psychologists and human behaviorists have spent a lot of time and published a lot about "Why people worry about the wrong things." I'm of the opinion we should each take some time to study this phenomenon. It might save us a lot of money!

    However, the last statistics I saw indicated about 30% of homes were under water. The remainder were not. True, the worth of that 70% has decreased. But what about the people who lived below their means, bought smaller homes in the last decade or so, avoided all other debt and carefully saved and invested that which was saved? What about the extreme savers who did the same, but didn't purchase a home until they were able to pay cash, from those savings?

    We don't know who those people are or precisely how well they have done. But I can tell you that my spouse and I are savers, and we've done everything possible to live debt free. That's a lot of interest we've never paid on cars, toys or you name it. It also represents a lot of discretionary spending we've avoided.

    We also track our net worth, and when purchasing we are aware that buying a new car will immediately decrease our net worth. We know by how much. We can also approximate how much less we'll have to spend each year in retirement as a consequence of that new car, or whatever.

    I'm sure we are not the only people in the middle class who do save and live this way, but I don't know what percentage has. I do know my spouse and I keep our good fortune to ourselves, although we do openly promote our philosophy. I suspect some of those we know also practice similar philosophy and by observing some of those around us, we've concluded we are certainly not an anomaly.

    Of course, we have experienced some intermittent breakdowns, including nasty health surprises, but we did avoid a lot of the traps that have apparently ensnared some of the middle class. Luck? Perhaps, but I always look at the downside and I do believe the dictum "if it looks too good to be true, it usually is." During the Internet and Real Estate bubbles, I concluded if it was so easy that anyone could get rich, then it was also true that anyone could go broke.

    So while I admire articles such as this, which are generalities, I also must say there are exceptions and extremes. So if 49.8% of middle class families can save, how many are able to save 10% or 15% or 20% or more? Similarly, if 19.5% of middle class family income goes to debt payment, then there are some who pay 39% toward debt and some for whom it is 0%. It must be so, if I pay 0% toward debt.

    These decisions are largely made by choice, but not always. Some won $900,000 in the lottery and some were struck by lightning. Most made day to day decisions and found they were not successful at building wealth.

  • Report this Comment On June 18, 2012, at 8:46 PM, dunce1239 wrote:

    The figures for for what your father made and what his sons made do not seem to apply at all to my family.i come from a family of seven children that grew up in poverty by any American measure, yet we all reached at least middle class in spite of 4 of us dropping out of school to enter the labor force and a couple of us are probably in the so called 1%. Frankly i see the opportunities as much greater today than what we all faced entering the labor force in the 50s and 60s.

  • Report this Comment On June 18, 2012, at 9:06 PM, TMFMorgan wrote:

    ^ Happy to hear of your circumstances, but averages don't always apply to everyone (by definition).

  • Report this Comment On June 22, 2012, at 4:41 AM, Odysseus221 wrote:

    Firstly, the demographics and industrial capacity has grown tremendously during the last 60 years. Next the capital flight for cheaper labor moved to Asia. Finally the average American lost sight of a saving mentality and developed themselves into a consumption mentality. Is it any wonder then that incomes went down as did the investment per capita of the US citizen?

  • Report this Comment On June 22, 2012, at 2:39 PM, GettingToRetire wrote:


    First, I commend you on an interesting discussion and more importantly, a civil one. Haven't seen any derogatory comments.

    My comments:

    Is it the government's job to create an environment where we have equality of opportunity? I am not sure. I do believe the government should create an environment where we have structural inequality -- such as graft, patronization, royalty, etc.

    If our government is supposed to create that kind of equality, then how? Wouldn't that imply a very activist government? I do believe government has a role in society and that government can act for the good of the people (no Tea Party person here). I'm not sure we have people in government that are all that great at doing this job, so I'll opt for a less activist government. I do like clean air, food, drugs. I do like highways and an appropriate level of defense.

    Back to the article: middle incomes are stagnant. Why? Is this just part of a normal business cycle? Why have middle incomes stagnated in the US? (is that something the government can act upon for the better?) We've had boom an bust across history an across all nations. Our irresponsible people who overextended themselves in housing can certianly find kindred spirits in past busts in history (such as tulips). You cannot regulate stupid.

    Still, why are middle incomes stagnant and what can the government do about it? The Sun King and Marie Antoinette might have second thoughts about ignoring the plight of the French middle class. Wonder if our 1% is concerned about another 20 years of middle class stagnation in the US, an social rest (or unrest)?

    If I find an answer to the question (the government's job), I will publish it. Till then, I think it is to find some balance where all Americans can pursue life, liberty and happiness.

    Again, great, civil discussion


  • Report this Comment On June 22, 2012, at 4:41 PM, Sunny7039 wrote:

    When I read stuff like "those who work harder should make more money," I am astounded. You STILL fall for that? What will it take?

    Let's take a brief look at the facts. First, the job description of a modern investment banker: he (and it usually is a "he") engages in capital formation and optimal allocation of capital. Great. That's an essential job. Now, of course, when he engages in capital destruction and grossly suboptimal capital allocation he . . . still gets a multi-million dollar bonus. Even at the expense of ordinary people who were doing real work during the same time period. Why is this all right? Why is it tolerated? Because most people would (secretly or not so secretly) like to trade places with him if they could? Hmm. If real work is despised and faux-work is admired, well, that is a problem.

    Now let's look at another billionaire who can buy whatever reputation he wants: Bill Gates. Has anyone here ever read the full texts of the antitrust suits against Microsoft? They go to hundreds of pages, and contrary to what you may think, the facts developed by the federal district court were affirmed. So, it is worth your while to study the real history of this company and how it made its money. But even apart from that, it should be obvious to everyone that planned obsolescence has played a huge role in the "success" of tech. Again, if you cashed in, what do you care? Except that yet again, this is a misallocation of precious resources, and that little by little, these things do matter.

    Of course in the meantime, all of these businesses are subsidized -- yes, every single one. Every single one externalizes a big chunk of their costs. At the very least, it is the U.S. military that protects the shipping lanes they rely on to "outsource" jobs.

    People keep mouthing the same propaganda, that money is a "true" measure of value. Only it isn't. Even if you believe in IQ, you know the curve doesn't have an infinite tail. And everyone's day has exactly 24 hours. In short, no one's time is worth a million per hour. It's simply not possible.

    The real problem underlying all of these developments is that there is now a gross disconnect between work and money. This isn't good. This is Peter-Pan Land. The only questions are when and how it will end.

    And you know, I guess I'm like everyone else in this respect -- I think I'll come out all right. So I also suffer from blind optimism. But realistically, what if I get broadsided by a text-and-driver? Or more simply, what if I get sick? Something that simple can mean the end of an otherwise solid nestegg that took a couple of generations to build. Does this sound right to you? Did anyone here CHOOSE this? I didn't think so.

  • Report this Comment On June 22, 2012, at 5:47 PM, Sunny7039 wrote:

    I just read the post above mine. "Should the government guarantee . . . etc., etc.?" "Wouldn't we need a very activist government . . . etc., etc.?"

    Don't look now, but we HAVE an activist government. Where do corporations go for global and local security, but the government? Who protects their global operations? Or did you think the largest military budget in human history was being spent on . . . well, what, exactly? I mean, it's nearly 50% of the global total. What did you imagine it was for?

    And what is the intellectual property system for? Who protects the property rights in this stuff? Who indeed, but the government?

    Now let's look at the court system. What did you think goes on there? On the civil side, I mean? Lots and lots of corporations go to the courts to defend their contracts. Among other things. Oh, I know you imagined it was clogged up by frivolous tort actions, but that's not the case at all. (Think for a minute -- all of those corporate law firms are doing something, right? And making lots of money. There you go!)

    The corporation itself is a creature of the state. It is given certain preferences upon being granted recognition as an entity by the state. Unlike natural persons, corporations cannot exist except by some sort of state-sanctioned collective agreement.

    My question is, how could people get this disconnected with reality?

    Next question: Why do you think this will work indefinitely? As far as your own finances are concerned, you do see the need for strict vigilance . . . right?

  • Report this Comment On June 22, 2012, at 5:51 PM, Sunny7039 wrote:

    BTW, I have no debts. Zip.

    I think "emergency funds" need to be measured in years, not weeks. (Especially if you own any stocks!)

    And I cook what I eat. (Yeah. Everything. It's a matter of principle for me. Okay, never mind that one, it is kind-of nutty.)

  • Report this Comment On June 22, 2012, at 10:41 PM, talexanderyu wrote:





  • Report this Comment On June 23, 2012, at 2:38 AM, 2motley4words wrote:

    I want to second what a couple of other posters have remarked: all of the comments to the article have been refreshingly free of disrespect, personal attacks, and political cant. But what's even more striking than the absence of name-calling and immaturity is the presence of civility and thoughtfulness, with several posters even remarking that they're rethinking long-held beliefs/attitudes; rather than insisting that they are giving the final answer, many posters have instead posed thought-provoking (as opposed to rhetorical, straw-man) questions---and, almost unheard of in these types of chats---have sincerely sought others' input on them! For me, the foregoing commentary has been worth the price of my subscription to SA; so, thanks to you all for a discussion that's raised significant questions that wouldn't have occurred to me and that's offered perspectives that I otherwise wouldn't have enjoyed.

  • Report this Comment On June 23, 2012, at 10:26 AM, clbjblk wrote:

    First I did not get a response on the stock picker who generated the Portfolio great stock that you can make money of of them tweeking there collection process for you stock benefits which I do not have that problem, but it is not nice to see the fool stand behind a company that would use ever ploy so a child could not eat with there scare plots that are bread into there employee.s sales meetings. Did the fool do there homework and see how they got so good hiring there good workers who I am sure have a great credit rating. I like MR RETIREMENT and would guess he would generate some kind of response how a retired person relative or friend helps someone that the fool says great stock. I ask Mr retirement to help those that help others avoid the fools we are not an adviser but this is a good scare you to the loss of sleep stock. Surely the Motley Fool with all there knowledge can show some compassion morals etc instead of telling how these companies buy there debt for pennies on the Dollar and praise the market with there great returns and please do not come back and tell me it is the same for everyone ,I would concentrate on profitable ins. companies who are told by Federal JUDGES TO PAY THES PEOPL'S BILLS instead of dragging this ball and chain attitude which seems to make money off others bad fortune weather it is true or not I hope some Judge or ATTORNEY COMES TO THE RESCUE FOR THIS DISCRIMINATION WHICH IS A GOOD INVESTMENT FOR ALL WHO WEAR THERE SUNDAY BEST TO CHURCH AND ACT LIKE THEY CARE. WHEN DID THE MOTLEY FOOL TURN INTO A FASHION SHOW WITH NO MORALS OR EMOTIONS BUT NUMBERS .SOME PERSON NEEDS TO HAVE A TALK TO SEE IF THAT IS THE DIRECTION THE FOOL GOES,YOU KNOW DO NOT FALL DOWN BECAUSE WE AT THE FOOL WANT TO PUT THE DOLLAR AHEAD OF A HUMAN BEING,I WOULD LIKE TO SEE WHO WRITES YOUR COMPANY CODE OF ETHICS IF THEY THINK THIS IS GOOD OR FAIR TO PROSPER OFF OF OTHERS WHO DO NOT CHEAT THE SYSTEM.I suppose any kind of life lock or money protection company could advise the real culprit.You can make excuses but take another approach at greed before life. Ihave to go to church now on this nice SUNDAY and I think I can talk to the PREACHER WELL ENOUGH SO PEOPLE ARE NOT SCARED TO GO TO CHURCH. HOW CAN YOU EVEN LOOK IN THE MIRROR AFTER YOU HAVE TOLD OR SUGGESTED HOW TO BENEFIT FROM PUTS AND CALLS.Do what is right and do not hide.

  • Report this Comment On June 24, 2012, at 12:50 PM, stromsky wrote:

    I am hoping that Paul actually meant that the government should ensure that there is equality of opportunity, not " I do believe the government should create an environment where we have structural inequality -- such as graft, patronization, royalty, etc." We do not need more graft, patronization, royalty, etc, as we have a craw full already. The government has gone way beyond what it should be doing and has been sucked into thinking it can guarantee your health, wealth and security from cradle to grave. (On another note they don't seem to care for those ahead of the cradle) It was never the governments mandate to regulate and administrate our lives, but here we are. The great "leveler" may soon appear and then we will all be in the same boat. I wonder how many of today's rich will actually end up truly hungry, wondering what could possibly have gone so wrong. Greed simply caught up to us and ran us over.

  • Report this Comment On June 25, 2012, at 10:14 PM, sailaway2012 wrote:

    Bottom line of the article:Although being stagnet for 2 decades.... slipping further down by the minute with no end in site, actually the system is decidedly slanted againest me (if I'm not very rich) and my kids & their kids & their kids etc will slid further & further down into the pit of poverty.

    I should feel lucky I don't earn less than $2 per day???

  • Report this Comment On June 26, 2012, at 2:44 AM, Zederone wrote:

    Alright, who linked this thread to DU?

  • Report this Comment On June 26, 2012, at 9:38 AM, zebhead47 wrote:

    I focused on a couple of things here. First, how small the average net worth was BEFORE the recession. I have to agree with Tomohawk that we are a nation of over-consumers that leverage our disposable income to the max. If your focus is spending and buying on credit it is very hard to generate any reasonable level of net worth; and thus very little in the way of protection for the proverbial "rainy day."

    Second, I think we are seeing international re-balancing where manufacturing that once drove the middle-class has now been taken offshore and what amounts to new middle-classes being developed in other countries (although at a significantly lower level than the US middle-class historically). There is nothing any government or President is going to do about that unless you want to move to an isolationist nation and we still have large international sales, so that is probably not a good idea.

    So as to not ramble, I think part of the Middle Class issue is driven by our own habits, which are not conducive to good financial outcomes. The other side is a fundamental shift away from manufacturing as a source of well-paid jobs in the country. When that is coupled with the fact that through technology we are more productive than 50 years ago, there are fewer and fewer jobs for those that make things...including producing services. We are going to have to retool our workforce to engage in the type of jobs that are available and that can produce middle income type of opportunities. In most cases that will require more education.

    This will require personal initiative and commitment and that is probably not something government is going to do for you.

    Somehow the people of this country found how to succeed for about 150 years before the government started "helping" us. In the last 70 years some segments of society have become very dependent on the government "doing something" and we have become victims. We have to move back to individual responsibility.

  • Report this Comment On June 26, 2012, at 7:21 PM, Sunny7039 wrote:

    You know, zebhead, it's hard to disagree with you. Well, maybe it's even impossible. But let's keep our eye on the ball -- the individuals and entities who TRASHED the global financial system are NOT being held responsible. That's first and foremost. It needs to be noted also that the corporate form of doing business is designed for the purpose of deflecting a significant measure of "individual responsibility." This is the whole point of limiting personal liability for the "acts" of a corporation. The most that can happen to a Fuld or a Tony Hayward is that he loses his job (and in the case of the latter, at least, he has a far, far more lucrative job . . . he started a hedge fund with a Rothchild. No. I'm not kidding. Look it up.). Neither one will ever have to give up a cent of the remuneration he received for his exceedingly poor performance. On the contrary, people lost their homes, people were killed, and people committed suicide. These two clowns get to keep their tens of millions. Anyone who tries to interfere with that scheme will most certainly feel the full force of government -- they'll end up in jail.

    This is not to say that many average people didn't play directly into these people's hands. They certainly did. Many educated, affluent people who should have known better didn't save. I don't understand it, either. And I certainly do not condone it. There's nothing uglier than rapacity -- on anyone's part. The 1/10 of 1%, or those who envy them and go into debt to imitate them and their "lifestyle." They are all ugly.

    I don't know what you mean about "the people of this country found how to succeed for about 150 years . . . " I gather you have no knowledge of the Great Depression -- or of the severe economic crises that preceded it. But you see, that is exactly part of the problem. If all of these people had understood the meaning of those events, they would have saved. They would have known better than to fall for the story that you can have it all now, and pay for it later.

    There is, of course, a broader reason for this dependence that is very hard to get rid of. In those 150 years, something happened that preceded industrialization and deindustrialization. That was the demise of the family farm. People used to be able to feed themselves. Today they can't even cook. Do you have some ideas on how to correct this? Please, let the rest of us know!

  • Report this Comment On June 29, 2012, at 12:39 PM, Arausio wrote:

    A simple question. What is your definition of "Middle Class"for all your statistic?. There is certainly no concensus of the answer in US politics let alone economists. Thanks.


  • Report this Comment On July 07, 2012, at 7:11 AM, Ilidas wrote:

    Someone above writes: "There's nothing uglier than rapacity -- on anyone's part. The 1/10 of 1%, or those who envy them and go into debt to imitate them and their "lifestyle." They are all ugly."

    Income inequality has been rising for 40 years and, in a sense, the middle/working classes were sold debt in lieu of rising wages. It is glib to reduce this to envy and imitation of the rich. For all the debt they assumed in the last 30-40 years, I doubt anyone in the middle class was buying a yacht or a private jet. They were likely maintaining a home, paying for their kids' education, perhaps taking a yearly vacation -- the components of a middle class lifestyle that their wages could not maintain but that debt could make possible.

    Also, those here who talk about the loss of manufacturing and the need to rely on other sources of employment may not have noticed that the last decade or more has seen corporate America send skilled *white-collar* jobs overseas -- think computer-related jobs, for example. From the mailroom to the word processors to the systems tech, there's the threat of exportation (nearshore as well as offshore).

  • Report this Comment On July 11, 2012, at 12:13 PM, sthtxs wrote:

    If you really want to bring back a 'middle class', then do what Ron Paul says.That means cutting government to the bone and returning to sound money.

    And no, I'm not for Chines and Indian levels of pollution.

    However, government at the local, state, and federal level has killed job creation. Taxes are way too high.

    I fork over 23% (federal, SS, medicare, local property taxes) before and after my check before I get to pay the mortgage or buy food. I'm no where near rich.

  • Report this Comment On July 11, 2012, at 12:16 PM, sthtxs wrote:

    Funny how 'income inequality' became an issue about the same time that Nixon repudiated the Bretton Woods agreement and abandoned what was left of any commodity backing of the money (not that it was ever 100%).

    Also by that time, silver coins were snapped up out of circulation by those who knew better.

  • Report this Comment On July 11, 2012, at 9:24 PM, testyg wrote:

    I agree this discussion has been civil and respectful. This makes it worthwhile to want to have a dialogue with folks who are willing to have opposing views, which I think is healthy. Now, on the subject matter of the Middle Class Decline;

    While most people want to point the finger elsewhere, I believe charity begin at home. While we want to believe it is Corporate Greed and monopolies that created the debacles even back to the Great Depression, we can look at individual choices and Government intervention, which I think is typically always bad because it is shortsighted. Michael Gates dropped out of college, took risks, made good choices and played smart. When he got into a market like Web Browsing, if we remember, he was not the first kid on the block. But arrogance and stupidity has slayed more than one corporate giant, just look at IBM and their choice not to go after the individual consumer. Pointing the finger at Microsoft is misleading and somewhat dishonest without considering all sides of the issue.

    I am one of 5 kids, and my parents were both 1 of 8 & 9 children. Both came from farming communities and neither finished grade school. They both worked as laborer/custodial to raise 5 kids (below the poverty and no gov’t handouts). Two of the five went to college but not because our parents could afford it but because we made a choice to figure out how to go. I worked during school and summer while finding grants/scholarships from companies, etc. and taking out loans. I did not expect someone to give me a handout.

    I went to work in a Paper Mill, 1000 miles away from my family, worked weekends, holidays and paid my dues. Taking a vacation is neither a right nor a necessity; cable is not a right/need, which I did without for more than 8 years In ME, (3 channels). I worked my way up the ladder and tried to save money so if there was a problem I could have a rainy day fund. It wasn’t easy but it was responsible.

    I bought my first house AFTER I paid my student loans off because owning a house IS NOT a right and is a huge RESPONSIBILITY not an investment. I also bought a house I could afford, about $100K not the $600 - $800K many folks purchased for their 1st home during the mortgage crisis.

    I also never bought an “AFFORDABLE LUXURY” car to envy those who had more money nor did I feel like the airlines should have fares that are lower than 20 years ago.

    You see folks, vanity, gluttony & envy are some of the 7 DEADLY SINS that have plagued the human race for centuries. Those communities that have managed to keep those in check (not many) will prosper and those that don’t will fail time and time again. Look at some of the ancient cultures (Rome) that destroyed themselves and some of the ones that continue (Greece).

    I think Al Pacino’s movie, “The Devil’s Advocate” said it best: God gives us “FREE WILL.” Kneau Reeves chose success over saving his wife away even after he saw her slipping away from him; he still chose the actions not to save her. It was too late before he realized it!!

    BTW, did I mention I grew up in the inner city in a working poor neighborhood? All of my friends & neighbors have worked their way to be where they want to be and are contributing members of society from all walks of life. Opportunity is what you make it!! They followed their own dream, not someone else’s. Then again, how many Whitneys, Madonna’s, LeBron’s or do we need to prove that!!

  • Report this Comment On August 24, 2012, at 7:32 PM, NoOracleHere wrote:

    It was pointed out at the beginning of the current recession that jobs would be the last thing to come back in the recovery. That prophecy has certainly come true. The Great Divergence properly points out and this article reiterates that the divergence between upper and lower class incomes has widened dramatically over the period studied. It should also be pointed out that there is nothing in the relative productivities of these classes that justifies this split. On the contrary, the major contributions of these "great minds" of the Ivy League schools during this period have been "too big to fail", and "repeal Glass-Steagall". Impressive! We have inherited the fruits of these bad policies, and as a result have structural deficiencies that have yet to be fixed. The Bush tax cuts persist, and the rules on Wall Street have not been corrected. When common sense fails, money makes the rules, as evidenced by the Supreme Court's decision to allow corporate sponsorship of candidates and Super-Pacs (vote for money because money has bought your vote).

    Oh, yes, Obama? Well, my take on it is that he misread his place in history. He spent all of his political capital on public health care, and forgot to take on the reforms that his moment called for. I suppose nobody likes cleaning up someone else's mess, but now his remaining political capital and 25 cents could maybe buy a cup of coffee.

    The political right? All they can talk about are spending cuts and more tax cuts. Well, spending cuts might be ok if it means shutting down the Iraq debacle. But spending cuts at home wouldn't do anything about the rift between rich and poor. The government is one of the few employers we have left. The money people claim that jobs will return when they have a few more billions in their bank accounts. This is simply wrong. Jobs will return only when there are customers in the stores with money in their pockets. Then employers will have no choice but to hire people to stock the shelves to get at the money in those pockets. It is when employers have no choice but to hire - that is when jobs will return.

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