We Are Seeing the Destruction of the Middle Class

Today (Sunday February 27), I was doing my standard search for news and came across this headline from Bloomberg (via MSNBC)

A U.S. recovery built on low-paying jobs

I have to admit, I was a bit shocked to see something within TradMed actually recognizing the realities that millions of us have long known from personal experience to be the case. From the article:

Before she lost her job last November as a full-time health department caseworker in Aurora, Ill., Amy Valle was making $23 an hour. Now she's paid $10 an hour as a part-time assistant coordinator in an after-school program.

"From here on out, it will be a struggle," says Valle, 32, whose husband lost his $50,000 government job and still is out of work after a year. "I don't feel like there's any place we can go to get what we were getting paid."

While the unemployment rate dropped to 9 percent in January, from a two-decade peak of 10.1 percent in October 2009, many of the jobs people are now taking don't match the pay, the hours, or the benefits of the 8.75 million positions that vanished in the recession, according to Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.

Of course, things are not likely to improve when we have President Obama's "Jobs and Competitiveness Council" comprised mainly of CEOs whose companies have outsourced millions of jobs and MOTU who were instrumental in the destruction of the global economy. We see the Federal Reserve, one of whose tasks is job creation, far more concerned about inflation, even though inflation is nowhere near the problem in today's economy that joblessness is. Today's NY Times has an opinion piece from Christina Romer, former Chair of President Obama's Council of Economic Advisers":

Let's Play With Some Numbers

While I was looking at the news yesterday, I came across this from the NY Times Economix blog, where the author threw in a rather standard right wing theme that cutting the minimum wage would help the economy:

In my view, all flavors of Keynesian economics ignore the many mechanisms that permit markets to adjust to changes in costs and benefits. Although a minimum wage cut would be an effective and revenue-free way of raising employment, the proposed payroll tax cut increases the benefits and reduces the costs of employment and will result in more employment among people earning less than $100,000 a year — even among those earning the minimum wage.

Not that this will penetrate the bubble around economists such as Mr Mulligan but let's play with some numbers here.