What will the working class poor do?

[seedspreader]

I've been thinking of this quite a bit.

To many people (myself included at various times of my life) 1 - 2 K is a lot of money.

I've always been able to find a decent car for 1500 or less (used to be 500 or less) that was discarded by someone, may have needed repairs, etc.

Now, with the price of scrap what it is, you can't buy a beater car anymore for less than a thousand dollars, and that's something that needs a ton of work.

Which of course, can't be done by the average mechanic any longer because in the past a rough idle might be one of a few things. Now it could be 20 - 30 things which include sensors that aren't just a "purchase and swap" type repair, because of the cost involved. You need to KNOW what is wrong with a high certainty before you go to the parts store.

And yet the minimum wage federally, lets an employee earn 5.85 an hour. (here in Ohio MW is 6.85). I know all the MW arguments, I've made them myself before... so let's say that MW is just entry level pay... let's say that a good long term employee in Ohio makes.... oh... 11.00 an hour at a non union job.

40.00 hours a week... 440.00 dollars. 22880 a year.

So any way, so we don't get weighed down in the numbers... let's just say that this fellow/lady is having a lot harder time finding an automobile, paying for it... paying their insurance/fuel, etc. And of course the vehicle will get horrible fuel mileage, because anything that gets decent mileage is of course worth more.

I guess I see a downward spiral for the working class poor that will continue to marginalize them.

Of course I am sure we will hear the arguments about how they need to get more education, work harder, etc.

But historically speaking, (and I think the illegal immigration issue bears this out) there will ALWAYS BE under educated manual/production labor that make the world go around. In fact, they are needed in our consumer driven world.

So will there be a breaking point, or will there just be more government intervention on the part of the working class poor (because they will vote for whomever promises the most "relief") until the breaking point comes to the middle class folks who are still working and busting their tails, but they got an education and make more, but are bitter about supporting the working class poor through their taxes?

Or am I just missing it and there isn't really a problem and this is the way it's always been?

[country friend]

The working poor will not be able to get to work before long if they have to drive . China , Japan Take a bike and still not bring home enough to heat your home and buy food .
I have seen this day coming for many years We are full time homesteaders have been now for almost 11 years . We do not make a lot of money but every thing is paid off . We have most of are own food and if things get real bad we can give up the truck and car . team of mules and two buggy horses .
I feel realy bad for folks starting out in this because it is going to get bad for it gets any better .
P.s. I do not post much my spelling is not what it should , but I do not know how to use spell check when I post.
Indiana Country Friend Jack

[sgl42]

i think you're right about the stresses on the lower income people. and public transportation is not really an option except in about 5-6 cities in the US (which also have relatively high rents)

however, the middle class is also stressed. particularly since the cost of college, supposedly the ticket to middle class and upper-middle class life, is now quite expensive, and leaves most people fairly deeply in debt. And we've also stratefied our k-12 school system such that if you want your kids to go to a decent school with a low crime rate, you probably have to go quite a bit deeper in debt to afford the house with the decent schools. Just add it on top of the college loans.

i think the 'breaking point' will be due to the middle class, not the lower classes. The stock market hasn't really done anything since 2000 (8 yrs), and now the housing bust is wiping out their "equity" (at least on the coasts; not so much in the middle of the country, except michigan and CO) and their ability to take out a home equity loan to go on vacation. Pretty soon they'll start realling looking at their savings rate, and their assets, the rising cost of everything, and what they need for retirement, and what social security can provide, and realize their fantasies of a cushy retirement aren't realistic.

Also, it used to be only mfg jobs being outsourced, primarily unioned auto workers and steel. Now computer software engineers are competing with imported Indians, and with outsourced s/w development. And some legal work and medical (x-ray reading) are being done overseas now too.

In some sense, it's reversed, ie, a plumber and a hair-cutter can't be outsourced, but more middle-income professions now can.

Unfortunately, we've built a very high cost society. we can't suddenly undo the suburbs with the long commutes, or suddenly create a decent public transportation system, or suddenly make the health care system reasonably affordable.

So far I think the middle class has liked to believe they were above the lower classes because they worked harder and smarter, and were on their way to the upper middle class. I think they'll soon wake up and realize they're likely headed in the other direction. It'll make for some interesting times politically in this country.

--sgl

[clovis]

Random thoughts:

The gap between the have's and the have not's is growing by leaps and bounds.

Alot of things complicate this matter.

The Wal Mart effect is strong in our economy. We no longer care so much about quality, just price. People just seem to want to buy cheaply priced stuff. Who cares if it is made in China..."I can buy a new microwave for $XX". This greatly effects what manufacturers and retailers will pay in wages.

NAFTA, Most Favored Trade status to China...and Vietnam, right? We are a nation of buyers, and we have given our manufacturing base to the world's poorest countries.

My dad is a buyer of electrical components for a major utility. He has had a salesman...from a major manufacturer (a household known name)...who was touting a line of transformers now made in China, tell him that labor was not a factor when determining cost of the transformer. Labor is not a factor? Wow. Just think, every transformer that is sold is another $15 hour job down the drain. I am happy to report that my Dad still stands up for American products made by American workers.

2 years ago, we had a factory close in our town that employed 1,000 people. They made exhaust systems for cars, and closed "due to softening demand". This translates directly to: "we are shipping at least 1/2 of this to Mexico", "We lost market share because too many people bought imported cars". It does matter what you buy, IMO.

Our government has made it harder for our own companies to compete. Both Honda and Toyota got MILLIONS in tax abatements for building new plants here. Wanna guess how much GM got? Heck, they have been providing OUTSTANDING jobs and tax bases for 75 years in several locations in Indiana. They got Zip. Zero. Nada. And now Toyota claims they will pay "signficantly less" than than they are now. They figured out they don't have to pay $14 hour to start...I read in the Wall Street Journal that their new target is going to be less than $10 for new hires. Go figure.

The extension of credit: The middle class, and the poor have been living the dream, or just making it because credit is available. I personally think that there are more people out there buying gas on credit, just to get by. You simply can 'borrow' your way out of a jam if need be.

The extension of credit is coming back to haunt us. Folks have borrowed more than they could ever pay back...especially with houses.

There has been a shift in expectations for education. At one time, a college degree was a ticket to a great career. Now, a college degree is expected even at the lowest levels of work. And because of the extension of credit and the cost of a college degree, it makes it harder for a young graduate to get ahead. With lower wages, paying back those college loans (often due to inflated school costs because kids can get credit) is even harder.

The falling US dollar: The Saudi's started demanding payment for oil in Euro's. A low dollar is great for exports, but what do we export? Grain, waste cardboard, coal? We lost our manufacturing base.

Taxation: It is hurting businesses and the growth of small business.

Social security: 7.65% of every wage is covered by the employer. 15.2% for the self employed. Talk about killing the ability for business to grow.

The Dumbification factor: Okay, that is a term I made up. It used to be that you really needed to know cars to work in an auto parts store. Now, just hire on for $6 hour, and the computer tells you what part to fetch. Corporate America has also perfected how to make the same taco, whether you buy it in Denver or Detroit. Yet another way to pay just above MW for line workers. We support this, me included, every time we opt for a 69cent taco over a family owned restaraunt.

The diminishing face of Mom and Pop stores: At one time, a local grocer would hire a butcher. They paid him enough to own a home and provided a decent living wage to raise a family. Is being a butcher even a career these days? If you want to handle meat in our town, it is going to be either Walmart, Krogers or McDonalds.

Healthcare: Man, something HAS to change. It is crippling our economy, the rich and poor alike. Healthcare, if not reformed somehow, could be the death of us. When families are losing $2 million farms, or their entire estate just to keep grandpa alive and in a nursing home. I am 110% for keeping our loved ones alive and healthy, but when the GREEDY hospitals get ahold of everything someone has worked for in the past 80 years...

If you take a look at our economy today, versus 50 years ago, alot has changed! Namely the stuff I mentioned above.

The bottom line:
Downward pressure on wages.
Unfair playing field.
Rising costs that are not matched by wages.
Soaring commodity prices.

Have I gotten far enough off topic yet????

I am sure the flaming and nit-picking will start immediately....

Clove

[bajiay]

I hear exactly what you are saying Clovis. Especially about the healthcare. I just had a reoccurence with leukemia. No insurance. My blood tests alone were $900 at the local hospital. Lazy Boy in Utah is closing its doors (where my SIL works, to move to Mexico). Don't know what he's going to do. I think what we are seeing is just the beginning of a long battle....

[Big Dave]

Just My .02
I have been homeless and working poor all my life. The last nine years have been the turn around for me. I grew up in Texas and went from job to job not ever getting the opportunity to obtain a skill I could make profitable. After thirty eight years I moved to Tennessee To try for a better life. There were no jobs. I tried there for a year went labor union lasted one day and the put back on the books. Ended up selling papers for money. Moved to Arkansas so relatives could help me get back on my feet. Got a job in less than eight hours. Bill Clinton was governer and this economy was working. It was not a job that I enjoyed but I was working. I now own my own business, am buying my land have the home I need. I never made $10 an hour. That wage was for people up in the north. That is why the poor moved there to find a better life. Then the GOVERMENT started to help. It took us OFF THE GOLD STANDARD. It passed laws to help clean the enviroment. Closed the factories down cause of that. It made us weak as we do not collect tarriffs on imports. Why do people come north it WAS where a better life WAS. Put the powers that be in reverse and get us our way of life we had twenty years ago. Like I said
Just My .02

[Alice In TX/MO]

Seedspreader said:
Or am I just missing it and there isn't really a problem and this is the way it's always been?

I don't think you are missing it. BUT, I do think this is the way it's always been.

I've lived in Indonesia, and the gap between haves and have nots was larger than here in the U.S. Think about Mexico, too.

In any society, there's a top and a bottom.

I agree that the government and insurance companies and credit card companies and outsourcing and OPEC and our culture are making things more bizarre more quickly. But the assumption that everyone *should* be middle class affluent or better is not reality and never has been.

[JJ Grandits]

The working poor will do what they have been doing for thousands of years. One way or another they will get by.

[Txsteader]

Originally Posted by Wind in Her Hair

Having been "working class poor" (below the national poverty level) for a portion of my life, and having had grandparents who were "working class poor", its my opinion that its "always" been that way. I wouldn't worry so much about the working class poor, they'll survive. They always have. Thats what they are -survivors. We could stand to learn a few lessons from those folks, if you ask me. I know I did.

The real trouble is that our EXPECTATION has changed and I see this mainly among the working middle class.

I am surrounded by a mass of YOUNG people (teens and twenties) who believe they are ENTITLED to have everything that we(age 50 and older) have worked and SACRIFICED a lifetime to achieve and they believe they are entitled to it NOW. (Overheard: A statement by a 23 year old - "We work 40 hours a week -we DESERVE a new truck!") "Deserve"...yikes.

Couples we know in their 20s go out and "buy" (mortgage) TWO -not one but TWO - of the biggest shiniest 22" rimmed chromiest XM radio blaring gas guzzlers you ever saw and buy (mortgage) a NEW three bedroom home without blinking an eye. They fill it with NEW furniture (because they can "Buy now and not pay a penny until 2010!") and have it professionally landscaped and have an irrigation system installed. They take expensive vacations, they eat out, they have cable and highspeed Internet and then they WHINE about the economy and expect their EMPLOYERS to make their lives better by increasing their wages.

As I have said again and again - in many many cases, its not an earning problem - in many many many cases -its a SPENDING problem.

When you have nothing - its easy not to spend any. When no one will loan you any money, its hard to dig yourself into debt. Oh, you can do it if you try hard enough - but its far easier to rack up debt when folks are willing to loan you money. And thats a BIG problem.

My grandparents "made do". Their garden didn't look like anything out of a Martha Stewart magazine - it was dirty and dusty and they hauled water drawn up in buckets from the well and my uncles slept out there with shotguns to run the coons out of the corn -because if they didn't - the whole family might STARVE...not "have to get their corn from another source", not "be inconvenienced", not "we'll have to substitute something else", not we'll "have to make it up somewhere else", they might have actually STARVED.

They didn't go crying for FEMA and they didn't expect their government to come and save them or to "make all things equal". They did what it took to survive. They ate venison, and doves, and squirrels and they fished the lakes and scratched a living out of the Oklahoma dust. And they enjoyed a long wonderful healthy happy life and raised 7 strong healthy happy well-adjusted humble and grateful children who bowed their heads before each meager meal and thanked God for the bounty of His blessings. Mercy.

Do you see where we have come in just four generations? It troubles me that we have gotten so far removed from our roots. Thats what draws me to sources like the Homesteading Today Forum - seeking like-minded people with shared values of faith and family and farm. And I suppose thats why I have so little patience for the whiners. Whining ain't gonna change a thing - in my experience, elections won't change a thing - oh the names and the faces will change but nothing that affects my everyday life will change. THAT kind of change is up to ME.

I'll change my habits, my consumption practices, my dependence on cheap groceries, my addiction to cheap gasoline ...and I'll find alternative sources and methods of living well below my means instead of well above it.

I couldn't have said it better myself.

[teresab]

You are right on WIHH. Totally agree with what you have written.

[tn_junk]

Excellent post WIHH.

alan

[DW]

WIHH...you said it all!

[hillsidedigger]

http://tech.groups.yahoo.com/group/e...message/111620

"We drive, they starve. The mass diversion of the North American
grain harvest into ethanol plants for fuel is reaching its political
and moral limits.

"The reality is that people are dying already," said Jacques Diouf,
of the UN's Food and Agriculture Organization (FAO). "Naturally
people won't be sitting dying of starvation, they will react," he
said.

The UN says it takes 232kg of corn to fill a 50-litre car tank with
ethanol. That is enough to feed a child for a year. Last week, the
UN predicted "massacres" unless the biofuel policy is halted."

[watcher]

Labor and wages are just like anything else in the market place; supply and demand works if the government keeps its nose out of things.

If you have a business you have to pay enough to get workers but not so much that your end product cost so much you can't sell it for enough to make a profit.

If you offer pay that is too low you aren't going to find workers or you will have a HUGE turn over rate. Very few businesses can survive with a large worker turn over because it takes time and money to train workers. I see this everyday around here you have what some people call the ultimate no skilled jobs, food service/fast food places offering 9+ dollars an hour just to get workers.

The problem is the government has screwed the system. Not only are businesses required to pay a minimum wage the businesses are competing with the 'wages' the government offers people to stay home and not work. When I worked in fast food I had people tell me they could stay home and make more money than they could working. Add to that the fact a business has to pay the government (in taxes and 'fees') just about as much an employee's base wage which doubles the labor cost. That's why it makes more business sense for a company to pay time and a half to an employee to work over time than to hire more workers. Its also why you see every business that can replacing workers with machines. Even McDees is doing it.

[MarleneS]

There really is something to the idea that people are or will become what they think.

Instead of thinking of yourself and your nation as going into a deep dark hole without any light or any possiblity of ever seeing light again...why not think of this "on the down side" period as a correction, or the transisition into a correction for things that need correcting?

It's surprising for me to actually hear fears and compliants from people who's common interest is getting back to basics, making do, being self sufficient, and/or living a simplier life.

It's actually a good thing that people might have to stop jumping into the automobiles and running into town for a single errand. That food is not as available - might make it also possible that the food that is available is safer, tastier, and therefore better for us.
If families have to give up some of today's readily available entertainment such as computers, televisions, other electronics, and such -- guess what they are likely to be doing --finding things to do as a family. Isn't that great news we can be thankful for in a down turning economy?

When you see your neighbors struggling to put food on the table - you as a self-sufficient, food producing family will be able to share with them, and teach them how to grown more of their own food -- what a learning experience that will be for you and your family.

And please no more of this political talk about who's fault it is that the housing market is crashing, that banks/mortgage companies who lent money to people who could not afford said housing are going under, that it's the fault of labor unions...for it is the fault of each and everyone of us who did as little as possible as long as we had the opportunities afforded us at the expense of others...it's the fault of each and everyone of us that were do busy to pay attention to what was being decided for us by others...

We've all had it coming -- and now it's up to each and everyone of us to pick where we are going to go from here -- are we going to start rebuilding a better life for ourselves and more importantly for our children, grandchildren? Or are we going to whine ourselves into our graves?

Wow...I'm not sure where that came from but I certainly feel better having had the opportunity to have said it

Hugs,
Marlene

[diane]

Well said WIHH. You describe my family. I am amazed at the attitude of so many of the young folks these days. Actually I would probably die of stress if I carried the debt package most of them carry. Simple is good for me and although I understand we all have the right to make choices, it really frosts me that my tax dollars are bailing out the greedy while I am made to feel guilty because I am drawing SS from the system that I was forced to participate in. I have worked hard my entire life and I do appreciate that I can have a little income in my old age. Compared to many parts of the world, my life is a cake walk!!!

[ladycat]

I've also been wondering what the working poor are going to do. When gas hits $5 a gallon and their only way to work is an old clunker that guzzles fuel, how are they going to make it?

[ladycat]

Originally Posted by watcher

Add to that the fact a business has to pay the government (in taxes and 'fees') just about as much an employee's base wage which doubles the labor cost. That's why it makes more business sense for a company to pay time and a half to an employee to work over time than to hire more workers.

Is that how it works...

A few years ago the company my brother works for laid off several hundred workers. The remaining workers got to work lots of overtime. I was trying to figure out they would pay time and a half to a lot of workers instead of letting the laid-off workers work regular time.

Originally Posted by MarleneS

Instead of thinking of yourself and your nation as going into a deep dark hole without any light or any possiblity of ever seeing light again...why not think of this "on the down side" period as a correction, or the transisition into a correction for things that need correcting?

It's surprising for me to actually hear fears and compliants from people who's common interest is getting back to basics, making do, being self sufficient, and/or living a simplier life.

I've been thinking that the only way people are going to get their priorities straight (the people WIHH talked about in her post), is to have a depression.

That sounds really harsh, I know. And a lot of innocent people will suffer- the working poor, and those on a fixed income. The thought of a depression scares the heck out of me.

But a depression seems inevitable at some point, and the gimme-gimme-gimme people will be forced to grow up.

[uyk7]

The falling US dollar: The Saudi's started demanding payment for oil in Euro's.

I haven't heard anything yet that supports this. The last I read was Greenspan telling the Saudi's to ditch the dollar but they did not want to do so.

BUT, I do think this is the way it's always been.

Actually the middle class has been shrinking (no, I don't have the links to show this). The number of lower class (low wage earners) people have been increasing so that there really is a big difference between the rich and poor.

They ate venison, and doves, and squirrels and they fished the lakes

Won't work today because you need hunting/fishing licenses. If you can't afford the license then you are poaching.

.

[Alice In TX/MO]

Of course a depression is part of the normal economic cycle. It will happen.