You have all seen those click bait titles at the end of some article you’ve read, trying to grab your attention. The one’s that begin “One weird trick …” have become both a joke and a cliche, and yet people still click through to the link. Why? Well, I finished reading an article on a sports site this morning, that was definite click bait material, but in a way that I found profoundly disturbing. What was the title you ask? Well here it is:/
An Extremely Brilliant Way To Avoid Paying Interest
On Your Credit Card Balance
I’m not going to give you the link. That isn’t the point. What that click bait ad title implies, and not so subtlety, is that there are large numbers of people desperately struggling with a large amount of personal debt, whether debt incurred to pay for basic necessities such as food, shelter, and clothing, or debt incurred to pay off past debt back when they had a better job, or any job at all. Or people with large medical debts to pay off, because many do, despite the improvement in the cost of health insurance the ACA has helped bring about for many families, but sadly, not all. Or so many younger (and not so younger people know) with large amounts of student loan debt.
Not to mention the far more worrisome massive increase in personal credit card debt over the last year.
Credit card debt is ballooning, leaving American households with a net increase of $57.1 billion in new credit card debt in 2014, according to a new survey from CardHub. The credit card comparison site said it’s forecasting new credit card debt will rise 5 percent in 2015, reaching $60 billion this year.
While the increased spending could signal that Americans are feeling more sanguine about their prospects and the economy, it’s also a cause for concern given that most workers aren’t seeing the type of wage growth that would support that higher spending. The surge has left the average household credit card balance at almost $7,200, or not far from the $8,300 level that CardHub considers unsustainable. […]
While Americans are carrying more debt, their earnings are barely ahead of where they were a decade ago. Household earnings have increased only 2 percent during the past 10 years, The Pew Charitable Trusts said in a study issued last month.
How can this be happening, if the economy is showing a fall in the unemployment rate, according to the Bureau of Labor Statistics. Well, that number comes from a survey, and the survey on the overall unemployment rate doesn’t account for the types of jobs being created in our stagnant economy, where since 2008, part-time jobs, compared to full time jobs, has grown at a faster rate that pre-recession figures.
Back in 2008, before the Wall Street collapse triggered by the bursting of the housing bubble and the over-reliance by the Banksters on selling derivatives to institutional investors based on securitized residential mortgages, jobs designated as full time positions for all employees 16 years old and older represented 83.1% of the economy before the crash. Now they represent under 82%, with part time jobs rising from 16.9% of the economy to roughly 17.7%. That may not seem like much, until you look at the cohort of people 28-54, the group in their prime earning years where the contrast is far starker:
As you can see from that chart, the rate of part-time jobs since 2008 has grown and despite recent improvements, still exceeds the rate at which full time positions are being created. Now this isn’t a result of implementation of the ACA, as some on the right would like to claim. It’s a clearly a hangover from the economic policies that led to the great Depression.
“With regard to Obamacare and part-time employment, the surge in part-time employment was triggered by the recession, not by the Affordable Care Act…” The statistics show that part time employment is not correlated to any increase in part-time jobs. In fact part time positions are trending downward since the ACA was enacted and implemented. Still, growth in low wage jobs, which are more often than not part-time positions, has accounted for roughly 2/5ths of all the new jobs created since “the labor market bottomed out in February, 2010.”
Every month the government heralds the falling unemployment rate as a sign of an improving economy. However, besides the growth in part time work versus full time positions, what else do the BLS unemployment statistics tell us? Or more importantly, what are our political leaders and mainstream media not telling you?
The most important thing they fail to say, or speak about in a sotto voce voice, is that a large number of the people who are jobless are not employed, and not counted as unemployed under the official statistics, because they have stopped looking for work. As of July 2015, the BLS estimates that 9.743 million people are not counted in the labor market, because they are not actively seeking work. These are people not counted in the unemployment statistics because, for whatever reason, they have been discouraged from seeking employment or have otherwise dropped out of the labor market. Percentage wise, that is the lowest rate of participation in the labor force since 1977.
“We are definitely seeing recovery but the extent of it is not as much as you would think from the unemployment rate,” says Nick Bunker, policy analyst at the Washington Center for Equitable Growth. “There is this long decline of labor force participation due to a variety of factors, mostly demographics. Obviously the unemployment rate has dropped quite a bit the last two years, but that’s hard to look at as a pure indicator of labor market health like people did prior to the recession.”
There are a couple of factors at work that undermine the reliability of the unemployment rate. As the huge Baby Boomer generation ages, the labor force participation rate declines as they either retire or, in cases more extreme than Klein’s, cannot find work at all – even part-time work. This jobs report revealed a labor force participation rate of 62.6 percent, unchanged from last month, the lowest level since 1977.
So who has been talking about this issue consistently both before and after he joined the race for the Democratic Party’s Presidential nomination for 2016? Bernie Sanders, that’s who.
The truth is that real unemployment is not the 5.4 percent you read in newspapers. It is close to 11 percent if you include those workers who have given up looking for jobs or who are working part time when they want to work full time. Youth unemployment is over 17 percent and African-American youth unemployment is much higher than that. Today, shamefully, we have 45 million people living in poverty, many of whom are working at low-wage jobs. These are the people who struggle every day to find the money to feed their kids, to pay their electric bills and to put gas in the car to get to work. This campaign is about those people and our struggling middle class. It is about creating an economy that works for all, and not just the one percent.
Sanders’ rise in popularity is due in large part to his willingness to speak the truth to the American people about the real economic struggles they face, rather than present us with happy talk about how great the unemployment numbers are. And that truth is that wages are stagnant for most people, there are far more people unemployed or marginally employed than the mainstream media wants to talk about, and as a result, personal household debt is once again on the rise.
You want to know what the one brilliant trick to not having to pay interest on your credit card balance? Not having such high credit card balances in the first place. And that will require more jobs, and better, higher paying jobs.
And among all the major candidates, Sanders has been the one person most consistent in his focus on improving wage growth (such as his strong support for a $15 an hour minimum wage) and unions, and by creating real employment gains at home by reeling in the large multinational corporations who are sending jobs overseas as well as evading taxes by hiding their profits offshore, as well.
Is there any reason to doubt why Sanders’ popularity is surging despite lack of media coverage he receives compared to other candidates, especially the unparalleled attention given to the odious Donald Trump?
One man is selling himself as the savior of America. The other is telling the truth about our so-called “economic recovery” that has left millions falling ever further behind, while also offering policies and detailed plans to solve the most pressing problems those people face, policies that offer real hope and change.
Is Sanders a great orator like President Obama? No. But maybe we don’t need great speeches right now. Maybe we just need someone telling the truth about the oligarchic corporate takeover of our government and the real life misery that has created for the 99% of us who aren’t benefiting from corporate control of our government institutions, federal, state and local. A person committed to effecting change that will benefit the lives of African Americans, White Americans, LGBT Americans, Latino Americans, Disabled Americans, working class and poor Americans, and every other American you can think of other than those few at the top who have been soaking up all the gains from our “recovering economy” while leaving the crumbs for the rest of us.
That’s my opinion, in any case, for what it is worth.
Ps. I am not affiliated in any way with the Sanders’ campaign. I’m neither a volunteer nor have I made a financial donation to him. But I’m thinking I should, and soon.
In broad measure, I think liberal bloggers are in complete denial about the economy.
I think Obama has a very defensible record on the economy. But that is not the same thing as saying that things are OK. I have quibbles with the presentation here. For example the participation rate has fallen because of baby boom retirements.
Globalization and automation. Each is operating to polarize the job market. It speaks, I think, to the bubble pundits operate in that they write so seldom about the main forces in the economy, and make little attempt to understand their political implications. If you work for a corporation you have seen jobs lost by automation or offshoring in the last 10 years. You understand this in a visceral way that I just don’t think many bloggers get.
I don’t think they’re in denial as much as sugarcoating in the face of a hostile media and anxious public who’ll try to twist anything they say for the next Chicken Little segment.
If you poke any leftist blogger even a little bit on the economy a spiel about infrastructure spending / wage growth esp. with minimum wage increases / FICA cap lifting / not raising interest rates / reduction of household debt esp. college spending won’t be far behind.
I don’t sense the urgency – a recognition of how broken things have become since 2000, when the link between productivity increases and wage increases was broken.
Nor is there any admission that these larger forces are not friendly to the party that has held the White House for 7 years.
Leftists have been pounding that wall since before Obama’s Presidency. And have been ruthlessly stonewalled/slandered by the corporate media and conservatives who only acknowledge our warnings or plans just to strawman them. You really can’t blame the blogosphere for recognizing that they’re just peeing into the canyon as long as the political situation remains how it is.
I agree and disagree. I don’t think liberal bloggers are in denial. It’s just that no one else really reporting the positive signs so we seem to be in defense mode most of the time.
Secondly, I agree with your comment about the participation rate. It’s a red herring. If people aren’t looking for work they shouldn’t be counted as unemployed. If you need a job, I don’t see any reason why you would stop looking no matter how long it has been.
Approximately half the drop in the LFPR is due to aging-related changing demographics.
The rest has multiple causes, some relatively benign — more people in school, for example — and some not.
It is complicated. There is evidence of an increase at stay at home parents for example – which in part may be a reflection of weak wages and expensive child care – or simply a choice.
The BLS definition of “not looking for work” includes those who read the want ads but do not for any reason, including not being qualified for the jobs available, apply for a job and those attending a Job Training Course so they can qualify for a job.
Are you talking about the economy here or are you defending Obama’s record on economic policy? Those are dramatically different sets of data because the Republicans, Blue Dog Democrats, and New Democrats have stripped Obama of power to actually affect the economy.
Meanwhile, the economic elites, freed of the restraining hand of the government and ensured that government spending has been cut…cut…cut… have created another bubble economy in which shady assets hid insolvency. The first ripple, such as a recession in China, causes a rush to the exits.
If previous patterns hold true, a major crash of some kind will happen in early to mid-October after 3rd quarter financial reports are out. Watch for it. If it happens we are extremely different economic and political waters.
I am trying to make the distinction.
Obama is NOT and was not anything similar to Hoover. Economists talk about government stimulus in terms of deficit to GDP. Below is a comparison of the deficit to GDP ratio for FDR and Obama. Note:
Some of this was a result of automatic stabilizers (unemployment insurance eg) and some was result of the stimulus package. The stimulus package has been attacked for being too small and too tilted toward tax cuts. The defense, never articulated anywhere is that the problem was finding projects ready to (worth noting that some of the transportation money STILL has not been spent – see California High Speed Rail). The tax cut argument is a replay of the ’61 debate between Walter Heller and John K Galbraith, which Heller won (he argued tax cuts would provide quicker stimulus).
In any case the size of the package was too small, but the policy response to the crisis (which includes Qe2 – which was the opposite of the policy the Fed pursued in 29)- is arguably the best response a democratic government has ever made to a financial crisis.
But.
Obama’s limitation is he does not understand the systemic shift that has shifted the power from labor to capital. Offshoring and technology have been used to extract a larger share of the income produced by labor. So while the response to the crisis has been excellent, the failure is to appreciate a structural crisis which has created a seeming permanent gap between supply and demand.
Here is a comparison of the deficit to GDP ratio under FDR
1929-01-01 0.70172
1930-01-01 0.80043
1931-01-01 -0.59690
1932-01-01 -4.59664
1933-01-01 -4.54895
1934-01-01 -5.36826
1935-01-01 -3.77254
1936-01-01 -5.06949
1937-01-01 -2.35806
1938-01-01 -0.10183
1939-01-01 -3.04385
1940-01-01 -2.83771
1941-01-01 -3.81839
1942-01-01 -12.35120
1943-01-01 -26.86066
1944-01-01 -21.17409
1945-01-01 -20.8383
And under Obama
2007-01-01 -1.11000
2008-01-01 -3.11547
2009-01-01 -9.79761
2010-01-01 -8.64968
2011-01-01 -8.37480
2012-01-01 -6.72821
2013-01-01 -4.07811
2014-01-01 -2.79340
I think you are right about the crash. However, people will blame the President and his Party, not 35 years of wrong-headed economic policy. And HRC just offers more of the same.
I do wish Bernie wasn’t feeding the Shadowstats “OMG, the BLS is cooking the books” with his “the real unemployment” numbers rap.
There’s U3, and it’s real, and the way it’s been reckoned hasn’t been changed since 1994, and there’s U6, and it’s real.
How they’re derived is not some occult secret. Why one is used and not the other as the headline indicator is similarly not the result of a grand media conspiracy…
Obama is not a God Emperor. By and large, Congress runs Economic Policy and the Executive Branch operates within the constraints.
I’m not blaming Obama. He did the best he could with a bad hand dealt by 8 years of Bush and Republican misrule combined with the Banks going crazy nuts after Glass Steagle was destroyed.
But to ignore the reality of the current economy, one where the benefits the verym very rich receive are not trickling down is sheer stupidity. More democrats should embrace the narrative that things would be vastly different without the obstruction of the past 8 years by a predominately Republican Congress (aided and abettted by conservadems).
Imagine if Obama could have passed the much larger stimulus plan he originally envisioned for just one example.
And I didn’t want to imply you were.
How can that be happening?
Permanently compounding 20% and above interest rates even for people who regularly pay their credit card payments above the minimum balance because of the credit scoring algorithm that favors the house–always.