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AlterNet reports
When Republicans in Congress passed a big, fat tax break bill in December, they insisted it meant American workers would be singing "Happy Days Are Here Again" all the way to the bank. The payoff from the tax cut would be raises totaling $4,000 to $9,000, the President's Council of Economic Advisers assured workers. But something bad happened to workers on their way to the repository. They never got that money.
In fact, their real wages declined because of higher inflation. At the same time, the amount workers had to pay in interest on loans for cars and credit cards increased. And, to top it off, Republicans threatened to make workers pay for the tax break with cuts to Social Security, Medicare and Medicaid. So now, workers across America are wondering, "Where's that raise?". It's nowhere to be found.
The U.S. Bureau of Labor Statistics reported this week that wages for production and nonsupervisory workers decreased by 0.1 percent from May 2017 to May 2018 when inflation is factored in. The compensation for all workers together, including supervisors, rose an underwhelming 0.1 percent from April 2018 to May 2018.
That's not what congressional Republicans promised workers. They said corporations, which got the biggest, fattest tax cuts of all, would use that extra money to increase wages. Some workers got one-time bonuses and an even smaller number received raises. But not many. The group Americans for Tax Fairness estimates it's 4.3 percent of all U.S. workers.
The New York Times story about this record breaker describes the phenomena this way: "Companies buy back their shares when they believe they have nothing better to do with their money than to return capital to shareholders." So despite promises from the GOP and the President's Council of Economic Advisers, corporations believed further enriching their own executives and shareholders was a much better way to use the money than increasing workers' wages--wages that have been stagnant for decades.
(Score: 0) by Anonymous Coward on Thursday June 21 2018, @10:07PM (12 children)
The hysterics are getting boring. On-topic: When interest rates are back above inflation, workers can start saving and planning for their future. Remember that? Workers feeling like they have a future? [cnn.com]
(Score: 0) by Anonymous Coward on Thursday June 21 2018, @11:25PM
How many had kids without being able to afford it?
(Score: 1, Interesting) by Anonymous Coward on Thursday June 21 2018, @11:26PM (10 children)
That's a feature, not a bug. By having inflation intentionally higher than the interest rates available, it forces people to invest their money in the stock market as that's the only way most people have for coping with inflation. There's a couple of US bonds that are indexed to inflation, so you don't lose as much value, but the other options are some form of stock, ETF or mutual fund most of which are purchased from individuals who have no duty to offer choices that are in the best interest of their clients.
To make matters worse, retirement accounts are increasingly either not available through work at all or are available and have increasingly expensive options inside of them based upon how the company felt about that particular fund's salesperson.
(Score: 5, Insightful) by captain normal on Friday June 22 2018, @01:09AM (7 children)
Most workers really don't have money to invest as they are living hand to mouth. So most people do not invest in the stock market. Here where I live, in central California, most people cannot even invest in buying their own homes. That was something just about everyone could do in the '50s and '60s. That gave them an equity cushion that they could fall back on. Inflation in everything but wages is destroying the country as the rich get richer and more and more poor are created.
Everyone is entitled to his own opinion, but not to his own facts"- --Daniel Patrick Moynihan--
(Score: 0) by Anonymous Coward on Friday June 22 2018, @03:08AM
And here you are, captaining the new normal. #SAD
ess joooke comrade
(Score: 1, Interesting) by Anonymous Coward on Friday June 22 2018, @07:25AM (4 children)
The rich can get richer faster when they can drive the poor into debt slavery... as not only are the poor paying for their stuff, you've also got 'em paying usury.
And the poor seem to be so susceptible to advertising.... I've seen 'em go buy the damndest things just to try to impress someone, not seeming to realize they have just offered several years into the future to pay for it. There is strong financial incentive to string 'em out in debt, and no incentive to wisen them up to not spend money they do not have.
I am fuming a bit here over a neighbor kid, who I know has few resources, carrying on over an expensive new car he just agreed to make payments on.... and I thought he would have been far better off had he bought something like I bought... an old diesel van... as a van would have given him a place to put his tools, and the option of not relying on someone else who has "the company truck" to provide him employment. He paid over 10X the amount I paid for the van, and what he has is almost useless for doing anything useful. Trying to impress the women with a "hot ride" is about the last thing this guy needs to be doing. Women see that car, and expect to go to really expensive restaurants. He's just being played sucker. But somehow, the "system" has successfully ingrained this paradigm into him. I see the finance company repossessing his ride when the economy burps again.
And he will never get out of his parent's house.
He even has his girlfriend living there... in his parent's house ... raising his son... while he continues to go out ... playing the field ... while his girlfriend rakes in government cheques.
(Score: 2) by lentilla on Friday June 22 2018, @09:30AM (1 child)
Well; to be blunt; he probably gets at least ten times the action you get.
It rather boils down to his priorities. Better to live a day as a tiger than hundred years as a sheep?
Yeah well, that's not cool. But still, he seems to have identified his priorities. He can always have his sweet ride repossessed and eke out a meagre existence in his parents' basement later - but he's only young once.
(Score: 1) by i286NiNJA on Friday June 22 2018, @04:51PM
That's how it works in car commercials and staged youtube videos. Oh and in testimony from guys with expensive cars.
Nobody gets laid for their stupid car in america.
(Score: 0) by Anonymous Coward on Friday June 22 2018, @12:41PM
Spoken like a true incel! Your old diesel van (that is a sensible vehicle allowing you to do things, as you mentioned, such as transporting tools you need) proves that you hate women!
Death to incels! Police be upon them!
(Score: 3, Informative) by bobthecimmerian on Sunday June 24 2018, @04:45PM
Buying used cars is actually a luxury. If my 8 year old car needs a $5,000 repair, I can either take the money out of savings (I have it... barely) or junk it and buy a five year old car to replace it. If the neighbor kid buys a used car and it suddenly needs a $3,000 repair, most likely he can neither afford the repair or a replacement. If he has payments on it, he's doubly screwed because he has no vehicle and a payment. If the same lower income person buys a new car, the payments are higher but for at least three years all maintenance problems more complex than oil changes and maybe one set of brakes and tires are the dealer's cost and not the buyer's.
On top of that, there are safety concerns. As much as we enviro-hippies hate it, mass is a huge factor in collisions. If I roll over a large pickup truck, I'm most likely dead and so are the other occupants. But if we don't roll over, we're going to walk away without a scratch from collisions that will massacre the occupants of a smaller vehicle. Within the same weight class, differences in crash engineering are also enormous. There are a whole range of crashes that would cause serious damage to the occupants of a 2006 Chrysler minivan that will only shake up the occupants of a 2018 Chrysler minivan. So larger vehicle size and newer, safer crash protection are two valid reasons to buy more expensive vehicles. I have my family of six in a brand new Chrysler van, and I'd put us all in a Chevy Suburban or Ford Expedition if I could afford the difference.
But otherwise yes, your point stands. No reason to buy a Mustang when a Focus will do. No reason to buy a Tundra pickup if you can get the job done in a smaller Tacoma. And if you do have $10,000 set aside, rather than making a down payment on a new X, spend $5,000 on a used X and save the $5,000 for repairs - plus all of the money you save month to month without payments. If I didn't have kids, I would be in a used Civic, Focus, Corolla, etc... I could never live with myself if I lost a kid in a car crash, but if I die in a crash I won't be around to miss me.
(Score: 3, Interesting) by AthanasiusKircher on Friday June 22 2018, @12:23PM
Well, I can't speak for central California, but the stats overall say home ownership rate [wikipedia.org] has been relatively constant since the 1960s and actually trended UP until the early 2000s (where it was artificially high, obviously, resulting in the huge housing crash because people actually couldn't afford homes but were given mortgages anyway).
Basically, it's been between 60 and 70% since the 1950s. Recently, due to the trend of younger people marrying later (which is often the impetus for buying homes), it's been trending back down toward mid-1960s levels. What does seem to be true is that more Americans carry less equity in the houses they own these days on average, which is a concerning trend -- but not surprising considering the tendency toward consumer debt in recent decades.
(Score: 3, Insightful) by lentilla on Friday June 22 2018, @09:15AM (1 child)
It would be wiser for "average people" to put their money in the bank. One should only gamble with money they can afford to lose - and the stock market is a form of gambolling.
People should be encouraged to put money in the bank. Money is the bank is not "wasted capital" because it, too, can be re-invested in the economy. If anyone should be left holding the bag, it should not be the general populace - for they are the ones that suffer the greatest consequences, but they also hold the key to re-establishing a solid economic future.
(Score: 1, Interesting) by Anonymous Coward on Friday June 22 2018, @12:27PM
No. The stock market is not gambling. By that logic, owning a small business or rental property is gambling. Owning stock is nothing more than owning a portion of a business. Would owning an HVAC repair business or rental house be gambling? Stock price fluctuations often don't reflect the underlying value of the business. The stock owners profit from dividends and an increase in value of assets of the company. If you own WalMart stock, you literally own part of the store down the street from you that is selling cheap crap and has a building and equipment that you could be sold if it became unprofitable.
Consider shares of most companies can be bought for less than $1000 per share. This allows the common person to be able to afford shares (ownership) in many different companies. Investing is hedging against a loss of employment. When you work for a corporation and have no investments or significant savings you are betting your lively hood that your boss won't fire you, your location won't close down, that they aren't going to go bankrupt, you won't be replaced by a computer sitting in rack, etc. Stock prices are volatile because, frankly, sometimes people are stupid. Even many hedge fund managers and financial advisors. I am stupid sometimes too. Warren Buffet has been stupid.
Buying bonds are a large risk as well. If the fed increases interest rates, what you would be able to sell your bonds for just decreased because nobody in the right mind would buy a 3% bond for full price when 4% ones are being issued.
Buying a home is not without risk. Interest rate changes can drive home prices up or down. A higher home value sounds great, but unless you sell it (and likely buy another house with an inflated price) you will just pay more in property taxes, which are now not as worthwhile to deduct on federal taxes thanks to the higher standard deductions. Also consider the local economy. What if you live in manhatten and the NYSE and Nasdaq move shop to the much cheaper Raleigh, NC? The investment banks will follow suit. Suddenly that closet sized apartment you payed 1.5M for is now worth 500k, and you just lost your job because the local economy tanked. The bank doesn't care what your property is worth. They want their 1.2 million you still owe.
Owning stocks is the sane way to live in a capitalist society. A well run business can adjust to economic and cultural conditions to stay profitable. If you own a dozen well run businesses in different sectors, even a major disruption in one (think electric cars if you own an oil company) won't do a whole lot of damage to your net worth. A market crash is the equivalent of a going out of business sale. It is an opportunity to buy shares at a discount.
Putting all your eggs in one skill basket is risky too. Sysads and programmers make a fortune now, but that may change. For example, learn some basic carpentry, plumbing, or auto repair skills. Learn about psychology, negotiation, and persuasion (think sales jobs and management). You don't have to be an expert, just good enough to convince someone to hire you for slightly less than average.
Gambling isn't even gambling, it is entertainment. The games are rigged in favor of the Casino. All games are designed in a way to guarantee that over the long run the casino will take in more than it pays out. Consider a house advantage of 1%. Given a few million iterations, luck is no longer a factor. It is just statistics. "Gambling" is usually nothing more than placing bets that will almost guarantee you will lose in the long run.
I will continue to buy stocks with any spare cash I get.