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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

December 15, 2011 at 10:20 AM

The American nightmare

We will hear no end of attempts to explain away the latest Census report showing nearly half of Americans are either poor or low income. “They’re not really hurting,” is a prominent meme from think-tank flacks who have likely never faced a moment in their lives when they worried about paying the rent or feeding their children. But the new report merely adds an exclamation point to trends that have been bearing down on for years.

The loss of millions of better-paying manufacturing jobs over the past 30 years have all too often been replaced by low-wage service positions. Increasingly, these have been temp, contract or part-time jobs that not only don’t pay decently, but also fail to provide the benefits that allow for the accumulation of retirement savings and offer a hedge against a catastrophic health crisis. The working poor, especially minorities, suffer from a dearth of inter-generational wealth.

Traditional rungs in the ladder up have been removed — fleshing this out could fill many blogs. But one example is the rise of what Richard Florida called creative-class jobs, which often draw big pay in the labor market. Seattle, with it’s software empire, is a hotbed of the creative class. But twined with the loss of manufacturing, especially lower-skilled factory work, this development has caused a pulling apart. We still don’t have the policies or investment to provide “port of entry” positions for the lower-skilled into the creative class.

Public policy based on preferential treatment for finance, union busting, shameful compensation for top execs and the free-lunch promise of endless tax cuts has also hurt the middle class. Economic activity has become distorted, checks and balances have been lost and funding for public goods such as education has been decimated. The Great Recession only brought these stresses into such startling relief.

Explain it away, but everybody knows it’s real. It’s not the country I grew up in, and it bodes ill for the future if it continues unchecked. Whether the elites want to recognize it or not we’re in this together.

Today’s Econ Haiku:

Seattle jobs hot

At least in today’s climate

So can you write code?

Comments | More in Great Recession, Income/living standards, Jobs/Unemployment

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