1/18/2013 8:45 PM ET|
A 2nd term to save the middle class
Obama steps into his second inaugural with a vow to turn around the decline of America's middle. But that promise is already in peril.
President Barack Obama, who said his "one mandate" in a second term was to help middle class families, takes the oath of office with many barriers to raising most Americans' living standards.
Most Americans started this year with a cut in take-home pay as Congress let a temporary 2-percentage-point reduction in payroll taxes expire. Workers' leverage to gain wage increases will be limited for years by competition from the swollen ranks of jobless Americans as forecasters expect the unemployment rate to remain at or above 7% through 2014.
Even with bright spots such as signs of strength in housing and an energy boom that's lowering fuel costs for manufacturers, forecasters predict a slower expansion as federal tax increases and spending cuts crimp growth and demand for exports drops with a weakening global economy. While the U.S. economy advanced at a 3.1% rate in the third quarter, growth of just 2% is seen this year, according to the median estimate of economists surveyed by Bloomberg.
At the same time, Obama faces united Republican opposition to his agenda and pressure to slash federal spending.
"The president is still fundamentally on the defensive," said Damon Silvers, policy director for the AFL-CIO labor federation. "His fundamental task is to avoid being forced into austerity measures that will hurt the economic recovery or the capacity of our government to serve the people."
Obama was confronted in his first term with an inherited recession that drove down most Americans' incomes. His second term starts with a fight to merely hold the line against the Republican House majority's push to cut benefits in entitlement programs such as Medicare and Social Security that many Americans rely on.
Looming battles over the budget, the legal debt limit and a round of automatic spending cuts scheduled for the end of February restrict Obama's leeway for other priorities, such as boosting infrastructure spending to stimulate economic growth.
The pieces of his economic agenda most likely to raise middle class living standards in the near term are "the parts that look like they're not going anywhere," said Larry Katz, a labor economics professor at Harvard University. These include plans for an infrastructure bank and tax breaks for new hires.
"Left by itself," Katz said, the economic recovery is likely to continue generating "tepid, small improvements" in middle-income workers' living standards "but not enough to really offset the poor performance since the late 1990s."
Middle class U.S. workers -- defined by one measure as households with annual incomes within 50% of the national median, or between about $25,700 and $77,000 -- have faced a four-decade-long erosion of living standards. It was interrupted by a rare period of rising earning power during the fast-growing economy of President Bill Clinton's second term, Katz said.
Real median household income soared to $54,932 in 1999 from $50,661 in 1996 based on constant 2011 dollars, an all-time high since the U.S. Census began reporting the data in 1967.
By contrast, median household income in November 2012 was $51,310 -- $3,850 lower than when Obama took office in January 2009, according to an analysis of census data by Sentier Research, an economic-consulting firm in Annapolis, Md.
In Clinton's second term, gross domestic product grew at an average 4.3% rate and the unemployment rate averaged 4.4%. That created a tight labor market, which provided workers leverage to press for higher wages.
Clinton also won congressional passage of a two-step increase in the minimum wage, which took effect in 1996 and 1997, creating additional upward pressure on pay; the federal minimum wage hasn't gone up since 2009, when the final step of a wage increase signed by President George W. Bush took effect.
The gains of the late-1990s are eclipsed by decades of downward pressure on pay.
Median wages for men between 25 and 64 dropped 19% - - to $34,000 a year -- from 1971 to 2011, after accounting for inflation, according to an analysis by Michael Greenstone, a Massachusetts Institute of Technology economics professor and director of the Hamilton Project, a Washington research group affiliated with the Brookings Institution.
The impact of the decades-long slide in wages was initially cushioned in many families by the increasing number of women who went to work, and later by the home equity that families borrowed against during the run-up in housing prices before the real estate bubble burst.
More from Bloomberg:
MORE ON MSN MONEY
VIDEO ON MSN MONEY
You know, the pre-union wage before unions came along and created the middle class.
That's why Republicans hate unions and the middle class. that's why Repubs hate a fair wage for a fair days work.
A repeal of outsourcing and a FEDERAL minimum wage of $15 an hour would cause the American economy to soar. Republicans will fight a repeal and will fight against any wage increases.
Republicans have long declared war on the middle class and are winning by sending our jobs to China, union-busting, and wage-busting.
Why do you hate good wages?
Will senior citizens vote for Republicans that want to END their Social Security and Medicare.
Tea Party Republicans = Senior Citizens Against Their Social Security Checks
Stand with Republicans desire to END Social Security and Medicare by declining your Social Security and MC.
SS/MC are social safety net programs that a conservative like you despises, unless you benefit from it, then social welfare programs are A-OK, when it's you using them.
Since Repubs want to end SS/MC, decline your SS/MC benefits. Let's see how well you fare.
It is his plan to destroy the middle class . Break our backs by taxing us to death , destroy property values . Have the employers reduce hours & wages to save the company and there employees from financial ruin and jack the cost of living to the moon.
Now we have to get back to work ! Millions on welfare depend on us !
Tomorrow is a triple header day for the Jerry Springer worshipers of the world !
God save us .....
I need not say anymore.
Your government believes that the best way to eradicate trillions of dollars of debt is to spend trillions more of our money.
Obama has stated on national TV that he believes himself to be the fourth greatest U.S. President, behind Washington, Jefferson and Lincoln but greater than Theodore Roosevelt.
They had to settle for coal, because they couldn't find a 200 ton piece of s**t.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.
Not fair to make judgment of this, until you see what the Fire Chief says!!!!
In South Los Angeles , a 4-plex home was destroyed by a fire.
A Mexican family of six, all welfare recipients and gang members,
Lived on the first floor, they died.
An Islamic group of seven welfare cheats,
All illegally in the countryfrom Kenya , lived on the second floor,
And they, too, all perished in thefire.
6 LA, Hispanic, ****ers, & ex-cons,
Lived on the 3rd floor and they, too, died.
A lone, white couple lived on the top floor.
The couple survived the fire.
Jesse Jackson, John Burris and Al Sharpton were furious!!
They flew into LA and met with the fire chief, on camera.
They loudly demanded to know,
Why the Blacks, Black Muslims and Hispanics,
All died in the fire and why only the White couple lived?
The Fire Chief said,
"They were at work"
THE BIG QUESTION - - - WHO DO SUPPOSE VOTED FOR OBAMA?????
Save it?? What the hell does that mean?? He spent his first 4 years destroying it. Is this just in case it does survive and he can take the credit? And the Sheeple have so much koolaid in their systems that has short-circuted their memories that they will fall for it like a bunch of lemmings off a cliff.
Elderly Republican VOTERS can show their support for the GOP's desire to end SS/MC by REFUSING/DECLINING their Social security and Medicare.
Show solidarity with ALL elected Rethugs by declining your SS/MC.
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
[BRIEFING.COM] Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.
The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.
The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble (PG 81.89, +3.19). The second-largest staple stock advanced ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|