Based on the evidence below, the US currently has an underclass reaching about 10% of the population. Although these sorts of phenomena occur during recessions, keep your eye out as there are other signs the US is turning into a two-class society:
Whoever says a dollar doesn't buy anything anymore hasn't been to a Dollar Tree store (DLTR). Store revenues are up 12.5%. That's 12.5% more dollars chasing ultra-cheap products rather than higher quality goods. But when your wages are either flat or nonexistent, choices are slim to none.
The number of homes in foreclosure across the U.S. in 2009 climbed to 2.8 million, an increase of 21% over 2008 and a staggering 120% jump since 2007. According to Irvine CA-based foreclosure-tracking company RealtyTrac, 2.21% of all U.S. housing units--one in 45--received at least one foreclosure filing last year. According to Rick Sharga, SVP of RealtyTrac, 2010 is expected to see between 3 and 3.5 million foreclosures.
Do you think the unemployment rate is 9.9%? That's not the broadest measure of unemployment. The broader number more appropriately includes those who need work but have given up the search, and those who have taken part-time jobs while still seeking full time employment. And that number is 17.1% or 24.5 million Americans. That's like multiplying the population of New York City by 4 and taking away every single person's job. Ouch.
They will soon. But at the moment it's worth noting this number because it shows approximately how many people cannot afford health insurance. As my grandfather says, "All you have is your health." These people pray everyday that they don't lose their health because the costs can drive the average person into bankruptcy.
If you can't eat, you can't live. The Agriculture Department said a record ~$40 million Americans, or 1 in 8 Americans, may not be able to eat without government assistance. This is the ultimate sign of an under class. And the US has been setting new records consistently since December of 2008.
Do you have other evidence of a stabilizing under class? Let us know in the comments below and we may add it to the list ...
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In Mexico in the mid-'90s Wall Street engineered a currency coup that tripled the debt owed by small businesses and family farms and also allowed for them to be massively ratejacked on top of it. Mexicans consequently formed the "el Barzon" movement and pushed back Wall Street and deposed their ruling party of 60+ years. In this country YouTube phenom Ann Minch has already declared the debtors' revolt and begun going after them http://www.revoltstartsnow.com
If you've been pushed under, you can read every other page of my book for free: http://www.scribd.com/doc/25443175/Debt-Hope-Down-and-Dirty-Survival-Strategies-Evaluation-Version-Complete
It is a wonder that there is anyone at all to do the simpler jobs in large metro areas. I guess at some level, government and charities are called upon to subsidize this arrangement. It is a pathetic state of affairs, where people who once would have lived in some modest, unassuming corner of the country relying upon a few factory jobs now are robbed of their dignity and judged to be social problems that pull upon our sympathies. I can see no easy way out, unless tomorrow's entrepreneurs go willingly to the hinterlands with their opportunities and leave the metro areas to implode.
There are a lot of younger people looking for work and not finding it, but there is nothing more terrifying than being 56 and knowing you may never find work, beyond temporary, part-time jobs, for the rest of your life!
I still don't understand where American business expects to find consumers if an ever greater percentge of workers become impoverished.
And the rich just keep getting richer.
I believe that there is, besides a permanent set of people who no longer work, a large set of people who work but are using those mish-mash of federal money to support themselves. This is as a result of our company free government not setting minimum wages realistically. So, the actual costs of keeping this segment of the people going has been socialized, whereas the benefits of having them as low wage workers - the profits obtained by their employers - come to only a privileged few.
This is what alarms ME, whether or not these people are then stuck in their position near the bottom of our social ladder permanently.
If as a society we could get to the point of setting wages so that much less socialist type support was needed upward transitions would become easier for our "underclass".
Once the governing agency found out about her job she was told she could either quit or be kicked off of every program. What choice did she have? Bring home $400 a month working or stay home for $1500. Where is the incentive to work?
It's a vicious downward spiral. They ignore the fact that my family goes to the old hardware store and the local grocery to protest Home Depot and national grocery chains, knowing full well that we'll pay a little more, yet these simple acts have become a luxury that fewer and fewer can afford.
1. Given that unemployment has been increasing since December 2008, it seems reasonable that unemployment insurance, housing assistance and food stamps and other forms of assistance would be on the rise. I don’t see the validity in the argument that this represents and underclass rather than the effects of this terrible recession.
5. My blue collar tenants have traditionally shopped at Macys and other high end stores while I shop at the 99 cent store which I assume is comparable to the Dollar Tree Store. If the under class is now shopping at lower end stores rather than higher end store, welcome.
4. I have owned homes for all of my adult life (40 years) and have never been close to foreclosure. I have been laid off, had business reversals, lived through Jimmy Carter inflation. Why? Because I have always lived well below by means. When I made $800.00 month I spent $600.00 month. I made it a point to save a minimum of a years pay for the inevitable bad times. I’m guessing that most of those now facing foreclosure are leading a less conservative lifestyle.
3. Big Problem. As a small business employer it can only get worse with ever increasing cost of Obamacare, higher taxes, the treat of cap and trade, the threat of mandated sick leave etc.. The more it cost to do business the fewer people can be hired. It’s as simple as that.
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Every day I see campers and RVs and trucks lumbering up and down 101 .. and know that the price of gas is not high enough yet. Sometimes here you will see as many as 15 campers, RVs, then trucks and SUVs before one car goes by.
None of this, though, means that there is not a permanent underclass - or that there is. The article is unconvincing, but the question is interesting and possibly important.
Even if we do not have a permanent underclass, we may be developing a permanent divide between those blue collar guys and the upper middle class - upper class. We would need to see statistics on who goes to college, etc., to figure out if upper mobility has choked.
That is why I found this post interesting right up to the "It's as simple as that." NO WAY!
Roughly speaking, the average CEO took home 44 times as much as the people on the floor in 1980, today that figure (in the US) is 450 times.
are you seriously suggesting that the US has, at any point in the last 30 years (and probably beyond, but i have not had time to check the numbers) been more or less equal? are you suggesting that the minimum wage has been an equitable percentage of that paid to 'executives', CEO's and the like?
Please Sir, retract.
Want to improve your health, cut sugar out of your diet.
Hey, im all for second chances and paying the consequences but i think many would be surprised how one mistake ruins your life forever regardless of how man decades of doing good after serving your debt to society. Just look how much money we waste on the war on drugs and prisons. We warehouse people for $40,000 a year, double what most of them would make free on the streets. We wonder why we cant hold budgets with that kind of math.
One in nine state government employees works in "corrections". Corrections accounts for approximately 7% of state government expenditures and medical costs for inmates are growing at a 10% annual rate.
Many of the crimes that currently result in jail sentences might be better dealt with by intensively supervised probation, but it's actually cheaper in some respects to just warehouse prisoners than it is to hire and train enough good probation officers. Penny wise and pound foolish perhaps.
A 2002 study of prisoners released in 1994 (8 year old study of prisoners released 16 years ago) showed that 68% were re-arrested within 3 years and 52% were returned to prison.
However the recidivism rate for prisoners who had served longer sentences (61 month or more) was lower at 54%, although that may be a correlation between age at release rather than length of sentence, since older prisoners appear to be less likely to repeat offend even after shorter sentences.