The New Year is here, and economists point to a solid stock market and falling unemployment rates. They call it a recovery. But the stock market actually has risen because of jobs cuts, replacing workers with robotic assembly lines and accessing off-shore cheaper labor. And those new jobs, well, I’ve already blogged about how we are now replacing the once high-paying jobs with part-time work, contract labor with no benefits and no future, and lots of low wage service jobs in food services, hospitality and lower end construction. Buying power for the average American has eroded every single year, without a break, since 2002, and 90% of the post-2008 increased have gone to the top 10% of earners.
The economic picture is not really improving that much, and if you happen to be chronically unemployed, not only are your federal unemployment benefits long gone, but your prospects for getting back on your former path are close to zero, assuming you find any job at all.
We’re also so focused on illegal immigration from Mexico, even though that vector has long-since stalled. We’re trying to solve a problem that hasn’t really been a problem for a few years now. First, Mexico is becoming a growth country, so new opportunities are surfacing almost as fast as drug cartel murders are subsiding. The Goldman Sacks economist, Jim O’Neill, who coined the term BRIC to refer to the go-go economies of Brazil, Russia, India and China has a new acronym for the next generation of go-go economies: MINT, and leading that list off is Mexico followed by Indonesia, Nigeria and Turkey. You won’t find the United States on any of those new go-go lists! Mexico? With oil in the ground and off-shore, new manufacturing capacity and a growing educated middle class and lots of new construction? Yeah, that Mexico!
Immigration from Mexico has stalled, as many U.S.-based undocumented are traveling back to their home country where opportunities are growing, leaving the United States where hope is drying up and blowing away. In fact, general population growth in the United States has almost halted and would be negative except for the trickle of immigration that still remains.
“The U.S. population grew by just 0.72 percent in the year ended July 1, 2013, the Census Bureau reported [December 30th]. That’s the slowest growth rate since 1937. Population growth has hovered at super-low levels for the past few years, according to William Frey, a senior fellow at the Brookings Institution, a nonpartisan research organization. The trend is ‘troubling,’ Frey said, and is due largely to the weak economy… ‘This real sharp decline has to do with recession-related issues,’ Frey said. ‘Fewer people come into the country because there aren’t as many jobs, and people are postponing child-bearing.’” Huffington Post, December 30th. Ya think?
We really can’t say that this is the new improved United States, unless you live in the rarified air of the one percenters who own an astounding 42% of America’s wealth. I wonder how low profile cars can still get around in our pot-hole infested cities and when the next levee or bridge will fail. Cities are failing (Detroit syndrome), state and local government pensions are unfunded to the tune of $2 trillion (the feds just print money), and exactly where is that money coming from. Sure we are buying new cars in record numbers, but it that a good or a bad sign? The average 11-year holding period for American cars is so long that people have to buy new cars, because the old ones are not working anymore!
If demographers are correct in their projections of population, and population growth is an economic indicator, the future says we are in trouble… except for those pockets of growing American wealth where the exception actually does prove the rule: “’In a sign of the lean times, the state that saw the largest growth in population percentage-wise last year was North Dakota. In that state, where a recent oil boom brought tens of thousands of jobs, employees can land a gig at McDonald’s that includes a $300 signing bonus… ‘When the economy is ticking, you’ve got people moving to where the jobs are,’ Frey said.
“U.S. population growth is expected to slow even more in the next few decades, though that’s largely not attributable to a weak economy, Frey said. Instead, the slow growth will mostly be the result of an aging population.” Huffington Post. Oh, that’s not a sign of a weak economy? With unfunded pensions, working Americans will increasingly be called upon to support older citizens no longer able to work. Trust me; that is definitely a sign of a weakening economy.
Here are the facts, according to a 2005/6 report by the Office of Policy at the Social Security Administration (by authors Gayle Reznik, Dave Shoffner and David Weaver): “Due to demographic changes, the U.S. Social Security system will face financial challenges in the near future. Declining fertility rates and increasing life expectancies are causing the U.S. population to age. Today 12 percent of the total population is aged 65 or older, but by 2080, it will be 23 percent. At the same time, the working-age population is shrinking from 60 percent today to a projected 54 percent in 2080. Consequently, the Social Security system is experiencing a declining worker-to-beneficiary ratio, which will fall from 3.3 in 2005 to 2.1 in 2040...”
As the birth rates among American whites fall below replacement value, that segment of the American population will continue to fall. But countries like Italy, Singapore and Japan are watching plunging overall populations, dropping to a level that will tank real estate values, reduce the viable workforce and slice growth numbers like a hot knife through butter. Japan alone posted particularly disastrous population contractions in 2013: this island nation fell by a record-breaking 244 thousand people, heading to an overall 1/3 reduction within 50 years.
Here in the U.S., we really need to look at the statistics that matter to the vast majority of Americans in determining when we are actually in a true recovery. My numbers tell me that we are just adjusting to a lower standard of living, smaller homes, less education and fewer hopes and dreams for the future. Recovery? Yeah, and I’m the Easter Bunny. Hippity hop. Hippity hop.
I’m also Peter Dekom, and I have the compulsion to call it like I see it, and what I see is definitely not a recovery!
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