Losing the middle class

Most of my readers know that, after months of speculation as to his fate, former Delaware Senator and Vice-President Joe Biden entered the 2020 tournament for the Democratic presidential nomination a couple weeks back.

I had the opportunity to find this out a little in advance as I’ve been on his American Possibilities e-mail list for awhile. Of course, that’s morphed into the Biden 2020 mailing list so now I get regular missives from him on a variety of topics. Most of them I ignore, but this one begged for a counterpoint. I’ll pick it up after the formalities and omit the appeals for money as I go point-by-point. He’ll be in italics and I’ll be in regular font since it works better than a blockquote.

Michael, this country wasn’t built by bankers, CEOs, or hedge fund managers. This country was built by the American middle class.

It’s nice that you know my name, Joe, and in many respects you are correct. But most “bankers, CEOs, or hedge fund managers” were once members of the middle class – they just used hard work, talent, and aptitude to rise above the rabble that may not have had those same priorities, abilities, or desire to succeed. And the country needs ditch-diggers, too: there’s no shame in hard work. America was built by this team effort.

But today, the middle class is under attack, and too many families are being left out. They are working longer hours for less pay.

That’s why I’m calling for a $15 minimum wage — so we can build an economy where everyone has a chance to get ahead. (Emphasis in original.)

An hour is really still 60 minutes, but I get the point. But it seemed to me that median wages were increasing faster than inflation was since your successor took office, and government figures bear me out. They also prove that the Trump administration is succeeding much better than your old boss in addressing the situation.

I’ll grant the numbers come in at the tail end of the Great Recession (on the cited chart they begin in 2010) but in constant dollars the time period from 2010-2016 saw a net increase of just $5 a week during that six-year period. Moreover, while women’s earnings increased $10, men’s earnings actually declined $2 a week in constant dollars (based on 1982-84.)

Conversely, under Trump men have increased by a full $10 in nine quarters and women are up $2. Overall, the numbers are up $6 despite a hiccup at the end of 2017 that saw a sharp decrease in all categories. In 2018-19 men are up $11 a week, women $4 a week, and overall we have gained $10 a week. (Remember, that’s in 1980’s-vintage constant dollars. In actual 2018-19 terms the numbers since the end of 2017 are $51 a week for men, $29 for women, and $44 overall. A full $20 of that overall figure came upon the enactment of the Trump tax cuts between 2017Q4 and 2018Q1.)

Given that the average wage is now $23.31 an hour (and has risen about $1.50 since Trump came into office): I think the middle class is doing pretty well in this economy. But let’s soldier on:

And Michael, I’m asking you to stand with me on this, Sign your name to call for an increase of the national minimum wage to $15:

No, you’re standing by yourself on this one, Joe. Aren’t I already on your mailing list anyway? (By the way, that was originally a link to the money page.)

The middle class isn’t a number — it’s a set of values. Owning your own home. Sending your kids to college. Taking care of your geriatric parents.

The cost of all of these things is rising. And wages? Those aren’t.

We need to fix that. (Emphasis in original.)

Didn’t I just prove that wages were rising? Surely not everyone has an equal bump in pay, but as a whole they are.

And let’s talk about these milestones, shall we? One huge issue for the Millennials is the student loan debt they carry thanks to a society (aided by government regulatory policies at all levels) which requires a college degree for most of the desirable jobs. But not every degree is created equal; hence you get the proverbial womyn’s history majors working part-time as a barista at Starbucks while many engineering majors make serious coin. (Moreover, a large percentage of STEM majors are foreign students – look at a list of graduates from any engineering program and you won’t see a lot of common American names.)

And why is college so expensive in the first place? Conveniently, this chart happens to go back to my senior year of college and is in constant 2015-16 dollars – so you can see how the cost has grown so much faster than inflation. It’s been almost twenty years since I set foot on the campus of my alma mater but even in that fifteen years between graduation and my last visit there was a LOT of building on that campus – mainly in the category of student amenities such as a recreation center and complete renovation of the student center. Yeah, there were a couple new academic buildings (and they were gutting and expanding the architecture department building at the time) as well but that’s not what really attracts the kids.

Add to that the multitude (as in growing at a rate twice as fast as student enrollment) of new administrators – who surely receive an upper-middle-class salary and benefit package – and you have the beginning of a rampant increase in costs.

But the kicker was finalized by your old boss. Once the government shifted from guaranteeing loans – a practice for which the modern incarnation began in the early 1990s as a pilot program under Bush 41 – to becoming the sole provider in 2010 as a codicil to the Obamacare act, schools had no incentive to keep costs in line – why not dip your greedy mitts into that sweet manna of taxpayer dollars and keep everyone working on campus fat and happy? They had their money, so who cared if the government didn’t get theirs? That was on the student!

So the graduates (if they finished at all) have no money for a house, which is why many millions still live at home. And since their Boomer parents seldom put enough away (perhaps because they’re still supporting Johnny and Sally) for retirement and old age – believing Social Security and Medicare would somehow be enough to cushion their lavish lifestyles – those Boomers and their kids got a rude awakening when it was time for long-term care: Medicare doesn’t cover it and Medicaid will help itself to your estate for reimbursement.

Maybe it’s time to reconsider how much the government has already “fixed” for the middle class here? And don’t worry, I didn’t forget about ol’ “Creepy Joe.” Here he is again:

We need to restore the basic bargain for Americans so that if you work hard, you are able to share in the prosperity your work helped create.

To do this, we need to start with paying fair wages from the beginning.

Joe, did you forget that the true minimum wage is zero? Chances are, if you work hard and learn the skills needed to succeed in the workplace, you won’t be a minimum-wage worker for long. Yes, you may have to relocate or do tasks you might think are “beneath” you, but there are still paths to success in America – even in states where the minimum wage is set to the federal minimum.

Honestly, if we wanted “fair” wages we would have no minimum wage. That would be the ultimate in fairness as you are paid what you are worth to the employer. Don’t forget: employers aren’t there to give you a job, they are working to make a profit for themselves. If that doesn’t suit you, there are many opportunities to be your own boss – be cautioned, though, that there’s a much smaller safety net underneath you. But you would definitely “share in the prosperity your work helped create.”

I’m asking you to speak up, with me, and call for a raise of the national minimum wage, as the first step of many to have the back of American workers.

I told you no once, Joe. Get the government off the back of American workers.

This is just the first step. I look forward to sharing more about my plan for America in the future. Stay tuned.

Yeah, that’s what I was afraid of. When your plan consists of rightsizing government to conform to the Constitution – that would be a good first step. Until then, you’re just a guy who’s lived on the taxpayer dime for way too long.

You know, Joe, I was only six years old when you were first elected, and in that interim time I’ve worked in the private sector for thirty years or so. (For about fifteen of those I was paying off student loans – and that was only for about $10,000, plus scads of interest.) You made it all the way to vice-president, and I’ll give you props for dealing with the tragedies in your life. But arguably you have less in common with a working man than Donald Trump does, even though you talk a good game and he’s a billionaire or whatever. Trump took risks and had spectacular failures but he’s signed the front of checks for thousands of employees, too.

And comparing his economic record to that of your former boss – well, I don’t think there are too many who want to go back to that malaise. I know I don’t.

I don’t know what your domestic situation is, but I would be curious: what do you pay your hired help? Hopefully it was more than your charity giving once was.

Anyway, it was nice talking to you, Joe. Good luck in the debates – you’ll need it.

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