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Wednesday, December 10, 2014

The Need for Middle Class Minimum Wage

~ "I'm not fat, I'm fluffy.."

When one looks back on the last six years with the origin point being the market crash in September, 2008, what has been the biggest failure; the biggest blunder which has prevented sincere economic improvement for all financial strata?

It has nothing to do with political parties in power or who's sitting on the Oval Office throne for the moment which means unfortunately for this continual greatest bleep-up to true sustainable recovery, there is no one specific villain to pin blame on..

The biggest hindrance to real recovery is this:  No matter how much money was spent in the past 6 years by government or the Fed; no matter how high the market has risen artificially and corporate profits have expanded..

There has been no tie-in with wage growth.
~ "Stop looking at my tushy"

Pretty much when money has been shoveled like warm poo for the well-to-do piggies, there have been no strings attached; no earmark of how any part of the money is to be spent.

Imagine if a loved one lost their home in a fire and you were wealthy enough that you could provide the financial assistance that insurance did not cover and do so without feeling any financial pain.

Now maybe call it naivety or just logical, reasonable assumption but one would expect in such circumstances, the money given would be used for practical purposes relating to the actual reason the money was needed

And instead, you find out the money was spent on visits to casinos and strip clubs and other frivolous extravagances.    Be pissed off much?
But in a way, legally speaking it would be your fault..  There were no parameters set up saying this check for X is to be used for food, a hotel room, replacing clothing and other immediate necessities, etc..

You assumed and when one 'assumes' they make an 'ass' out of 'u' and..  well not "Me" me but.. you get the point..

So that's what the government and Fed did.. Whether intentionally or incompetently...

From the $700 billion TARP vote in September 2008 intentionally set up so all banks got a cut of the pie whether they needed or not, just so cloak the angry populace from who the real weak banks were, to endless QE..
At no time was any large amount of money given to the financial or corporate sector with the contingency that in order to receive X billions, they had to raise wages by 10 or 20%, or replace the temps with full-time Real employees

So the soulless businesses took the free no-strings attached money and used it to pay down debts, expand their balance sheets and invest..

Then fired some more people and replaced with temporary workers or shipped the jobs abroad, as businesses will always choose to do if it means saving 15 cents.
The Fed's goal has always been to stimulate inflation, as if the idea that prices drop and everyday people get to save a few dollars is a terrible thing i.e. how the finance world looks currently on the drop in oil price

There are two kinds of inflation though..

1)  "Good" inflation -- when wages rise faster than prices. When this happens, households have more money to spend on consumption, and it's progressively easier for them to pay down debt and support additional borrowing.

This contributes to a healthy vibrant economy.
2)  "Bad" inflation is prices rising while wages stagnate.  Here prices keep rising as central bank money-printing devalues the currency, but wages don't rise along with it.   As a result, even if wages do not drop in numerical terms, they decline in purchasing power which is actually more important.

For instance, if your employer told you he was cutting your salary from $20 to $14 per hour but you could magically now buy a gallon of gas for $1.50, a new BMW for $22k and get a lovely 3 bedroom, 2 bath home for $130k instead of the current average price of $265k, would you be upset?

So this is why in spite of the bells and whistles and economic declarations of "Mission Accomplished" the American people are still hurting financially and if there's been any improvement outside of the top tier, its on an individual basis, not collectively as an economic 'class'
~ "Brr.. I'm freezing my..  Oh you heard that joke before.."

The government may be able to come up with every trick and scheme in the book to survive on a debt load of $18 Trillion followed eventually by $20T then $25T, etc., it does not make the same allowances for its citizenry

Those needless student debts to acquire knowledge that in most fields one could self-educate at the local library..  The need to start families even though its deeply irresponsible and only serves to diminish the economic quality of life of the child(ren) born..  The continual culture of 'live in the Now & pay later'

That ultimately does catch up to individuals..  And when enough experience it, like what is that one raindrop that ultimately causes the full glass of water to spill over, it won't be pretty.
What there needs to be implemented, though of course it never will be, is a middle-class minimum wage.

Remember, what a minimum wage does is prevent an employer from playing applicants off one another in an auction of sorts to find out who is desperate enough to work for next to nothing

"I got $6.15 an hour..  $6.15...  do I hear $6?  Who will work for $6..  I got $6.. Gimme.. Gimme $5.85 now.. Who will work for $5.85?..  Thankyou, $5.85..  Do I hear $5.70?"

The middle class desperate needs a minimum wage too..  Something that says all jobs that possess certain skill sets which require advanced education i.e. College or Trade School degree, is to get paid at bare minimum $20/hr
Based on a full calendar year, that would mean if you have a degree and are hired, the absolute lowest your salary can be is $41,600

The specific bare minimum per hour can be debated but what can't nor shouldn't be is some law that forces corporations and businesses to increase their hiring, instead of taking advantage of every downturn with 10-20% wage cuts and freezes on benefits.

The nation and its people can not survive another 5-10 years on this path.