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Posts Tagged ‘Gallup’

That’s the premise behind an article on CBS news by Aimee Picchi which is based on a book co-written by Sociologist Professor Kathryn Edin of Johns Hopkins University. A sample:

“By one dismal measure, America is joining the likes of Third World countries.

The number of U.S. residents who are struggling to survive on just $2 a day has more than doubled since 1996, placing 1.5 million households and 3 million children in this desperate economic situation. That’s according to “$2.00 a Day: Living on Almost Nothing in America,” a book from publisher Houghton Mifflin Harcourt that will be released on Sept. 1.

The measure of poverty isn’t arbitrary — it’s the threshold the World Bank uses to measure global poverty in the developed world. While it may be the norm to see families in developing countries such as Bangladesh and Ethiopia struggle to survive on such meager income, the growing ranks of America’s ultrapoor may be shocking, given that the U.S. is considered one of the most developed capitalist countries in the world.

“Most of us would say we would have trouble understanding how families in the county as rich as ours could live on so little,” said author Kathryn Edin, who spoke on a conference call to discuss the book, which she wrote with Luke Shaefer. Edin is the Bloomberg Distinguished Professor of Sociology at Johns Hopkins University. “These families, contrary to what many would expect, are workers, and their slide into poverty is a failure of the labor market and our safety net, as well as their own personal circumstances.”

Despite questionable statistics from the U.S. Department of Labor, most Americans do not believe the recovering economy has really boosted their well-being. True, there are more jobs now than in 2009 at the bottom of the recession. However, many of these jobs, as CRI has said here and here and, oh what the heck, just read here, are not the kinds of blue-collar jobs which were lost during the Great Recession. By this we mean jobs which paid at the absolute minimum, $35,000 and helped families earn at least a basic standard of living, even on just one income. The jobs we are seeing growth in are jobs in sectors like retail, restaurant, and tourism, which are generally minimum wage jobs.

The exact numbers receive EBT benefits (also known as ‘food stamps’), TANF (Temporary Assistance for Needy Families), Affordable Housing, student loans, etc., varies from month to month. But one thing that has absolutely happened is, more and more Americans are becoming poor, increasing numbers of working and middle class Americans are finding themselves sliding downward and not up, and the future looks bleak, because our deficit is so large there is no real way to ever pay most of it off. That’s why in poll after poll, the majority of Americans believe the so-called “Millennial Generation” will be the first generation to be worse off than their parents.

It should surprise no one that presidential candidates like Donald Trump and Bernie Sanders are stealing the show. The rhetoric each espouses, while different in ideology, basically says the same thing: the ruling class (Berni’s ‘billionaire class’ and Donald’s ‘political class’) has changed America from a free-market oriented society to one that is a combination of socialism and crony capitalism, the exact same system countries such as Canada, Sweden, Germany, France, the UK, Belgium, the Netherlands, Italy, Spain, and Portugal have. The days when a person could confidently and reasonably believe s/he could work hard, save money, invest wisely, and earn a higher standard of living are fading. Yes, there are indeed people who do overcome the odds and become millionaires or billionaires, even from humble beginnings. But for those who lack some superstar athletic, musical, or coding talent, those opportunities seem more and more distant as the majority of Americans work harder and harder for less value per hour.

The question of who to blame for this economic malaise floats around. People who identify as conservatives or libertarians generally put the blame on the government, believing government policies aimed at keeping people dependent on government, discouraging work opportunities for the poor (this post from ZeroHedge explains it, and mind their language), and federal reserve dollars being pumped into the system causing inflation are the main source. Throw in Statist politicians from both parties taxing and spending and pushing a tax code which actually harms people trying to acquire wealth through work rather than the already-rich and people whose income comes from the stock market, and there’s your answer.

People who identify as liberal or socialist will put the blame on Big Business. According to the Brookings Institute, the average age of a business in America is sixteen years- the highest it’s ever been. Despite claims of “new entrepreneurial activity” by our elected officials, fewer people are attempting startups. The biggest reason, besides bureaucratic red tape and high taxes? Business cronyism, where large firms use the government to rig policies in their favor and against their competitors, especially small competitors. As access to capital for small business owners, especially young people and people of color, declines, you will see fewer people taking risks to create jobs. That leaves us more dependent on corporatism for our daily bread.

In our view, both the left and the right make fair points, which then brings us to the next step: the solution. In our view, only a truly fair marketplace, where a person reasonably believes he or she can compete either for a job or in business, will help people climb the economic ladder. The reason Trump and Sanders are hitting cords with a segment of the population is because (and the political pundits miss this, for the most part) the majority of Americans, whose household income is less than $55,000 a year, are becoming frustrated and resentful that opportunities are being taken away and incomes are declining due to government policies which discourage work and entrepreneurship, and corporate entities who raid the treasury for their own gain, depriving would-be entrepreneurs and workers of the funds they need to either start a business, take care of their families, or save for retirement. The economic mobility ladder is slowly but surely being lifted up by those who already “made it” and are using the government to keep everyone else away, or dependent on the government administrators for their basic needs.

We hope the public at large begins putting the pieces together and starts to vote for candidates who will oppose the so-called Ruling Class and their wealthy financiers, and instead turns to candidates with quality solutions that will give people opportunity and real hope. That is change we could believe in.

CRI will continue to conduct research on policies which we believe best help all Delawareans achieve what they can and believe they can move up the economic mobility ladder. If you agree that Delaware needs a real change in how our government does business, then visit caesarrodney.org and learn about what you can do today to help.

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Since 2008 America has seen a greater number of businesses close than open. According to Gallup, roughly 6 million businesses out of 26 legally recognized actually function; the rest are inactive or exist only on paper. Of these 6 million “real” businesses, 3.8 million employ 1-4 employees. Only about 108,000 businesses in America (2% of “real businesses”) employ 100+ people. If we continue to kill off small business with over-regulation and over-taxation, how will the government be able to pay its bills, short of more printing, borrowing, and cancelling debts?

From Gallup: (article truncated for space)

“The U.S. now ranks not first, not second, not third, but 12th among developed nations in terms of business startup activity. Countries such as Hungary, Denmark, Finland, New Zealand, Sweden, Israel and Italy all have higher startup rates than America does.

We are behind in starting new firms per capita, and this is our single most serious economic problem. Yet it seems like a secret. You never see it mentioned in the media, nor hear from a politician that, for the first time in 35 years, American business deaths now outnumber business births.

The U.S. Census Bureau reports that the total number of new business startups and business closures per year — the birth and death rates of American companies — have crossed for the first time since the measurement began. I am referring to employer businesses, those with one or more employees, the real engines of economic growth. Four hundred thousand new businesses are being born annually nationwide, while 470,000 per year are dying.

You may not have seen this graph before.

Until 2008, startups outpaced business failures by about 100,000 per year. But in the past six years, that number suddenly turned upside down. There has been an underground earthquake. As you read this, we are at minus 70,000 in terms of business survival. The data are very slow coming out of the U.S. Department of Census, via the Small Business Administration, so it lags real time by two years.

Here’s why: Entrepreneurship is not systematically built into our culture the way innovation or intellectual development is. You might say, “Well, I see a lot of entrepreneurial activity in the country.” Yes, that’s true, but entrepreneurship is now in decline for the first time since the U.S. government started measuring it.

Because we have misdiagnosed the cause and effect of economic growth, we have misdiagnosed the cause and effect of job creation. To get back on track, we need to quit pinning everything on innovation, and we need to start focusing on the almighty entrepreneurs and business builders. And that means we have to find them.”

No matter how much some people will try to convince you the Roaring Twenties are back, the reality is that we have far too many businesses closing and not enough replacing them.Businesses do open and close all the time, but a lot of business closings are small businesses getting shut down because of government policy via regulation and taxation. A lot of these policies are Cronyist policies pushed by big business to weaken their competition, which is smaller stores. Thus for example, a big chain like Costco can safely come out in favor of the minimum wage increase knowing it will end up hurting the roughly 80 percent of businesses which employ nine or fewer people, while at the same time reaping the benefits of “caring” for their employees (note: we don’t object to Costco paying its employees well; we applaud it. But just because Costco might be able to afford a wage increase doesn’t mean every business can).

Crony business policies, government bureaucrats who make new regulations to justify their jobs, politicians who want to “do something” to get votes, and a well-intentioned but misinformed public which votes for things like minimum wage hikes  all result in a decline in new business startups and jobs lost and never created in the first place. We at CRI support economic policies which make it easier for people to start businesses and create new (hopefully well-paying) job opportunities without sacrificing necessary regulations and basic standards of decency. But unless we fundamentally change the way our country is operating, that 70,000 per year decrease in total businesses operating in America will increase in number.

Help support CRI! Your support allows us to research and provide analysis to the public on policies which will best grow the economy and create jobs. An end to the prevailing wage, Right to Work legislation, an end to Delaware’s gross receipts tax and lower corporate income taxes and personal income taxes, health care reform which encourages innovation from the private sector, and energy policies which would give people more choices would go a long way to helping Delaware, and America, make a sound economic recovery for all. Please consider making a contribution today.

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