The weekly number of new unemployment claims has been hovering around 325-350K. The monthly non-farm payroll number is usually about 100-150K.
What do these numbers tell us? 1.4 million Americans are losing their jobs every month, and only 150,000 are being hired for non-farm jobs. The rest are either picking oranges or competing for the 100-150K jobs that open up.
The middle class is losing over 1 million people per month. Where else do we see signs of the shrinking American middle class?
Have you been to Costco on a weekend lately? You can shop on a Saturday at noon without bumping into another shopper. I used to wear hiking boots to Costco to prevent my ankles from getting bruised by the sea of careless shopping carts.
Staples is about to shutter 225 stores in North America. Maybe we don’t need as many office supplies because offices are half empty, and small businesses, the lifeblood of Staples, have nearly vanished.
The middle class used to be made up of well paid union employees. They were displaced by overseas workers who could buy a house for what the union employees were paid in a single day.
Enter the computer savvy knowledge workers. The knowledge workers are being displaced as well…due to the telecommunications revolution reducing the cost of moving knowledge work.
If Americans aren’t building automobiles or providing customer service, where are they getting their money? The short answer–they aren’t. There was an awful lot of money here during The 20th century. We spent it all in China, and there is no one left to buy the stuff we built overseas.
Wealth is doing what it does best. It is growing in the hands of the wealthy and shrinking in every other social class. Even the rich are getting poorer, and only the “super rich” are watching their money expand.
I am presenting a problem without a solution, which is not a good business practice. I have a pretty good imagination, but I haven’t been able to dream up an answer to this massive and ever increasing gap. Historically, this was only reversed by violent revolution. When even the rich are poor, so poor they can’t afford to renew their Costco membership, will they riot?
I do not support or condone violence. We are an extremely bright generation of enlightened individuals. One of us will figure out how to generate new wealth for the masses. One route is to reduce our need for non-discretionary spending. Solar power can charge our electric cars. Oil barons won’t get our cash. That frees up money to spend on home improvements. Contractors can’t bee moved offshore,
Any other ideas?