Wednesday, January 11, 2012

The Road toward 21st Cent Global Sharecropping

Once upon a time, there was a land far far away in the world of dreams and "remember when..", where people, even if they weren't always happy, were able for the most part to have good lives financially and take care of their families.  In this magical place, one breadwinner was only needed to raise the average family of four in a level of comfort and the spouse could Choose to work rather than need to out of absolute necessity.

In fact, this distant world was such an amazing place that the sole breadwinner did not need to attend college and compile any form of student debt in order to secure well-paying work.  There were jobs a-plenty, creating wonderous products that all the world sought after due to the reputation of high quality workmanship.  And these workers received salaries that allowed them to pay their bills, go on vacations, have savings for the future, and never in a million years think of doing things like using credit cards to supplement income or taking out Insta-pay loans to cover between paychecks...

To me, its definitely "Once Upon a Time" because the American economic golden age of the 1950s and 60s was before my time.  But one does not have had to actually have lived over the last 50-60 years to know there's been a profound shift in the quality of life of the average worker.
According to CNN/Money, "Nearly one third of Americans who were raised in the middle class dropped down the economic ladder as adults -- and that's before the Great Recession hit... Pew's Economic Mobility Project looked at children born in the early- to mid-1960s and assessed their economic status roughly 40 years later.

"Being middle class in the parents' generation meant a household income of roughly $33,000 to $64,000 in 1979. But their children had to earn between $54,000 and $111,000 to maintain their relative standing in society in the mid-2000s. (These figures are adjusted for inflation.)...
"Long-term unemployment has devastated the ranks of the middle class, with many people losing their homes and forced to turn to food banks and government aid after they run through their savings. It takes nearly 41 weeks, on average, for the jobless to find new work. Also, the steep decline in home values has hurt many in the middle class.
Recovering from a huge drop in income is not easy, a separate Pew study found. Half of people who lost more than 25% of their income in 1994 had not recovered four years later. And a third did not regain their economic footing after 10 years..."
Some quick observations:
1)  Notice how no one talks about or encourages individual entrepreneurship.  You're only supposed to survive by working for others; by being fully dependent on the whim and will of corporations to hire you when its best for them and at the lowest possible wage they can get away with.. No one in media gives any encouragement or even refers to the possibility that starting up one's own business is as good or better an avenue for survival than to work for others.
2)  Like we wrote before, the average length of time to find a job is 41 weeks- that's over nine months.  A child could be conceived and fully delivered into the world before the average person can find work again,  and that's not even taking into consideration whether that job matches the previous job's pay scale and educational requirements.
3) The destruction of the middle class would have occurred 25 to 30 years ago if not for the widespread introduction of credit cards as a means to supplement the lost income.  Credit cards had been around  before the 80's but they had annual fees usually around $75 to $125, and some like AMEX required 100% pay back on the bill when the monthly statement arrived.    They were cards of privilege for the privileged.
Once legislation was passed in early 80's which forced uniformity of all states to have to accept the interest rates of a credit card company based on what the home state of the credit card allowed (usually Delaware or South Dakota), then credit cards were free to explode into the market place and eventually without annual fees. Then came the rewards points and cash advance/transfer checks.. on and on..
4)  Its going to be harder and harder for people to maintain middle class and especially so for young people to enter it.  It is a global playing field now and the ultimate goal of corporatilists  is an level economic playing field between east and west, so everyone's paid bare minimums and the vast majority of people working and living for no other purpose than to repay 'company store' debts.

Company stores were used, starting in the post Civil War reconstruction period to keep sharecroppers, mostly black ex-slaves and poor whites, forever enslaved to the land by providing all the farming equipment, seed, etc for "free" (loaned but never taking cash for said items) but then to be repaid at very high interest rates which the worker was forced to accept terms and sign contracts even if illiterate, or go elsewhere.  And if a sharecropper didn't work, he was arrested and would spend many many years in prison doing work detail for free on chain gangs.

Not much of a choice is it?

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