Economy Update: 'Middle Class Is Actually Shrinking'
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September 04, 2014, 12:17 PM
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Business reporter Stuart Varney appeared on Fox News Thursday morning to comment upon the new unemployment figures:

STUART VARNEY: The numbers are pretty good, I gotta say, those headline numbers hit you pretty good. But you dig a little deeper just beneath the surface and you see that not everybody is sharing in this recovery What youve got is steady, not spectacular, growth.

Now the other side of the coin, the other side of the headlines, not everybody is sharing in this, prosperity is not widespread. Youve got wages which are static, youve got a lot of part-time jobs being created, not full-time well paid jobs but part-time stuff. Youth unemployment very very high, the middle class is actually shrinking. So youve got, dare I say, a dichotomy, between what youre seeing in the headlines in the official numbers and how it actually feels on the ground, the two are different things

The other side of the coin is American corporations are frankly the best run in the world. Theyre making do with far less, theyre squeezing more profit and theyre using technology in the best possible way. Thats why youve got Wall Street at an all time high.

Technology means more computers, automation and robotics, and therefore fewer humans are required to accomplish the work. Improved technology is one of the three factors crushing the American worker: smart machines, outsourcing and immigration.

Below, a government chart shows how productivity and employment have moved apart in recent years.

If Republicans were smart, they would campaign on the Obamas anemic recovery, hampered by over-regulation and other Democrat afflictions. In particular, GOPers should denounce amnesty as a stab in the back to American workers and focus on protecting American jobs.

The downward trend for workers in the workplace has not gone unnoticed. PBS Newshour reported an interesting poll on Labor Day that showed how pessimistic citizens have become about making a living: 71 percent say they believe the economy has permanently changed for the worse. Interestingly, part of the blame is placed on foreign workers, so Americans are aware of the government-produced demographic changes.

U.S. optimism lags behind economic gains, study finds, PBS Newhour, September 1, 2014

JUDY WOODRUFF: We turn now to another take on today’s economic picture.

Jeffrey Brown has that story.

JEFFREY BROWN: For many months now, the number of new jobs created has risen and the jobless rate has fallen substantially, all part of what looks like a slow, but steady recovery.

But a new study finds that Americans are hardly upbeat; 71 percent say they believe the economy has permanently changed for the worse. And that’s compared to 49 percent who thought so just after the economic crisis had hit.

Political scientist Cliff Zukin of Rutgers University worked on the survey, and joins us now.

Welcome to you.

Well, let’s start with the big picture, this idea that more people feel there’s been permanent damage now than even a few years right after the recovery. They’re more pessimistic now?

CLIFF ZUKIN, Rutgers University: They’re more pessimistic now.

I think they’re unhappy and I think they’re anxious. What we found is that the notion that there’s been a permanent change in the economy has grown, not receded, as we have now hit almost five years of continuous growth. And the key to understanding this is, it’s just not showing up in their personal life.

JEFFREY BROWN: Well, that’s what I wanted — that’s what I wanted to ask you. What kind of experiences are they pointing to?

CLIFF ZUKIN: Well, they’re pointing to what they have in savings and salary and things that have changed around them. So they have now — 42 percent say they have less in savings and salary now than they did five years ago.

And they say that their current economic status for three out of five of them is either fair or poor. And so they have had some diminution of the quality of life. We asked two questions that allow us to try and frame this, whether they have had a major or minor change in the quality of their life and whether it’s been temporary or permanent.

And we have one-third in the country — so that’s 80 million people — who say there has been a permanent impact or their quality of life, either major or minor. So whatever has happened in the stock market and other indicators is not getting through to Main Street at all. People are struggling, and there’s been no letup really in the last five years.

JEFFREY BROWN: And did that pessimism cut across both class, ethnic lines, geography, as much as you could tell?

CLIFF ZUKIN: Yes, absolutely.

I mean, I think you can call it a generalized sort of malaise and upset. It’s so pervasive that it is not — it doesn’t break by the usual demographics, because it affects pretty much everybody.

JEFFREY BROWN: There was also a negative portrait of the American worker, by and large, as — as well as unhappy. I mean, that’s one way to just look at it generally.

CLIFF ZUKIN: Well, one of the things we wanted to do for Labor Day was to take a snapshot of how Americans view the American worker. And so we gave them 12 adjectives and asked them to check off things that they thought fit very well.

And the lowest was happy at 14 percent. Well-paid came in the next lowest at 18. Two that came in the highest are fearful or insecure in their jobs, and then highly stressed in their work. One of the interesting things was the picture of the American worker is not at all attractive or what we might think. Only 20 percent say that they’re innovative, only 30 percent ambitious. Only a quarter say that they’re well-educated.

And I think the statistic that surprised us the most out of all of this is just one in three said the American worker is better than workers in other countries.

JEFFREY BROWN: There was some new Gallup polling suggesting that with wages finally starting to creep up a little bit, that there was some — some new confidence in the economy.

Did you — did you see any signs of hopefulness?

CLIFF ZUKIN: Not really.

I mean, we have the same number as Gallup when you ask workers if they are satisfied with their own jobs. But when the focus is on the economy, the U.S. economy as a whole, only one-third tell us that it’s gotten better in the last year. And only one-quarter thinks it’s going to get better next year. It’s very, very hard to go through the numbers that we went through and find a lot of encouragement or upside.

JEFFREY BROWN: And let me ask you briefly, finally, you’re a political scientist. Did you see a direct political impact in terms of who people blame for all of this?

CLIFF ZUKIN: Well, I think they blame partly — foreign workers, partly just the economy, but they certainly are not enamored with government. We asked them how much confidence they had in Washington’s ability to solve problems. Just 2 percent said a lot. Another 20 percent said some.

If they had to choose between President Obama or the Republicans in Congress to handle the economy, they said neither of the above at 40 percent. And they don’t think unemployment is going to get better even if the Republicans take both houses of Congress in the fall.

JEFFREY BROWN: All right, well, not a pretty picture for this Labor Day.

Cliff Zukin of Rutgers University, thank you so much.

CLIFF ZUKIN: Thanks for having me.