America on its way down. Is it?

[Skybird]

@ August,

If you base your view on the group of people you are teaching at that trade school, then you are basing on a very specialised audience that neither could surprise anyone with it'S attotude and interest for trade, nor is is a representative sample of the social structure of the american society.It is a highly specialised group. Is the lecturing for free or almost free (an equivalent to German Volkshochschulen), or do the courses cost money like at university? If more like the latter, then you already would have a specialisation of that group by the fact that these are exclusively people who can afford the costs of the education (which I would expect to make a difference since education in the US and Germany gets handled very differently). Which would be illusionary for a poor family where both parents have lost their jobs recently, work in three different low wage jobs both, and find their family financially floating just above the limit at the end of the month (not to mention time).

From the Congressional Budget Office, summer this year:
http://www.cbpp.org/files/6-25-10inc.pdf

A bit older, Spring 2007, from before the economy crisis, but a competent piece on the problematic trends in low wage jobs. reminds me of Germany, where we see a massive annihilation of jobs that get reduced with low wage jobs that in parts even must be payed for by public taxes (with the profit staying in private hands, of course)
http://se1.isn.ch/serviceengine/File...owwagework.pdf

Over 40 million jobs in the United States—about one in three—pay low wages. Unlike
good jobs, most low-wage jobs do not offer employment benefits such as health insurance
or retirement accounts, tend to have inflexible or unpredictable scheduling requirements,
and provide little opportunity for career advancement. Globalization, automation,
outsourcing, and other economic forces have all contributed to a changing domestic labor
market. All too often low-wage jobs are replacing jobs that have traditionally supported a broad
middle class. While there is considerable public concern about the erosion of the middle class,
national policy-makers have done little in the last decade to improve the pay and conditions of
low-wage work.

(Identifying CEPR in it's own words: http://www.cepr.net/index.php/about-us/)

I perfectly understand how the american model was supposed to work. But the important question is if the ideology adequately decribes the reality, and this I always have put in doubt: I see a huge contrast between the historic claim how america wants to be, and how it really is. the social polarisations seem to massively increases as well, since somewhere in the 70s. The scissor between rich and poor is widening rapidly, also few and fewer people at the top become ever richer, while more and more people work more and more, but have shrinking living conditions and payments. In principle we have the same trend in Germany and throughout Europe. As I see it, massively living on tick and making debts, while not having savings, was in parts just a logical conseqeunce, becaseu for many it would not have worked otherwise anyway. And even the economy crisis was adressed by US poltiics by the same old way: making even more debts (and demanding others to do so as well).

It is a vicious circle. Companies replace jobs (with full wages and by that producing cunsom and taxes) with low wage jobs (producing drastically reduced consum and taxes - if any at all). The profit from saving wages is either kept private, or gets invested to increase the economic activity of the company on basis of low wage jobs - low wage jobs thus become a necessary precondition for creating "jobs" and economic growth. Then a structure is established where low wage jobs cannot be tackled without costing jobs and damaging the economy that has made itself depending on low wage jobs. However, where the state needs to compensate for that lack of money that low wage workers need in order to make it through the month, these payments are made by the public budget - taxes that is. In other words, low wage jobs shift things so that any gains are kept private, but any additional costs for it are made a public issue. In other words the tax payer directly finances by indirect subventions the increase in money gained by the company.

what's more, more and more workers turning into low wage workers means the state's basis for getting a tax income gets eroded. Less and less money is available to compansate for the social costs of lowe wage jobs, and indirectly financing companies switching to low wage jobs. And this is where things are heading for a heads-to-head collision. Politicians, eager to secure their election interests before anything else, have one big answer to that: increase public debts, spending on tick.

At the same time the industry becomes more and more dependant on the few and fewer rich ones to buy and to consumme. Becasue the more low wage workers oyu hve, the smaller is your populations inancial capacity to consume and by that boosting the economy. In Germany we see this trend very drastically unfolding, hacking away at our socialmiddle class: families with children. At the same time, for different reasons, the number of single parents with kids but without a partner, is drastically climbing - which in most cases feeds back on the costs for the social security network payed by taxes that are payed by less and less tax-payers: becasue more and more people work in low wage jobs and few and fewer people have children (=future tax payers).

It is social dynamite both in Europe AND America, I think. I leave out gunnar Heihnsohn's considerations on social structure of birth rates that I have linked to two or threemon ths ago. In brief it was about the huge problme of ever mnore spoical low class babies being born, but ever fewer high class or academics' babies getting born, which again has an impact on future tax incomes and costs for social networks.