Tag Archives: recession

The New Economy, Older and Part-time Workers, and Fulltime Exploitation

IMG_5745Missoula   With the truck brought to the curb with transmission problems, I found myself in this small, university-based town for the weekend.  Looking for a guy who knew mechanics, I walked through a Saturday farmers’ market near the river that was jumping with young families and children with strollers abounding and smartphones crushed to their ears.  Later in the evening, kids on the block engaged in a water balloon and flaying hose “fight” for hours as an excuse to keep cooler on a hot day, laughter peeling to the streets.  I felt like I was being transported back to a Norman Rockwell painting of the 1950’s.

            Sitting with friends who were longtime residents or natives of Montana in the yard of the house where we were squatting, as sausage cooked on the grill and the sun finally began to set, the subject that quickly jumped to the surface was, “who are these people and what are they doing here?”   The term “new economy” was bandied about.   People tethered to a high speed internet connection who could work anywhere on web startups, bio-mimicry, research, e-commerce, and the like, who wanted a laid back, small town lifestyle and had the money to make it happen.  The days when they remembered sagebrush where the malls are now, and cowboys tipping their hats on wobbly legs at dawn on Sunday mornings, was long gone now and somewhere – or nowhere — else.  They wondered whether folks in their fifties and sixties were too old to press the “reset” button on new careers, and theoretically agreed it was possible, and practically had no interest in doing so.  Earlier in the week, walking through Walmart, the number of older workers seemed legion.   My friends were clear: law, slaw.  There was discrimination against older workers, particularly when ripping off younger workers seemed such easy pickings.

            In the wake of the Great Recession, these conversations are in earshot everywhere around the country, not just small, lively Western towns, like Missoula.  There are now 2.7 million workers classified as temporaries.   The exploitation of young workers as unpaid interns slaving for contacts and network connections in the “new economy” has led to fifteen different legal actions according to ProPublica. 

Employers are having a field day and dealing with workers desperate for some income with a wink and a nod.   $1.2 trillion is estimated by economists in unreported income, which means no taxes paid perhaps, but also means more than that since this figure does not report the level of cash, under-the-table payments by cheap, often immigrant labor that is also providing the infrastructure under the “new” economy. 

Where were the values though?  My friends bemoaned the fact that younger, newer folks in Missoula seemed to just be scuffling with no interest in the environment or conservation.   I asked if there was recycling in Missoula because I didn’t see any cans or receptacles.  Oh, yes, we have recycling they all said, but it turned out that meant you could contract with a private company or take your stuff to Target who claimed they loaded it on their empty trucks and took it somewhere.  So, you really don’t have recycling as a public service then, I said.  Well, no, not like that. 

What new economy?  Neoliberalism in city politics with some visual amenities.  Worker exploitation, wage theft, and immigrant labor.  Great older workers turned out to pasture.  Sure sounds like the new boss is just like the old boss, and the new economy has a heavy foot on the everyone’s neck here just like the old one, even if the boots where bought at Patagonia.


Citizen Wealth Still Reeling from Recession Unless You Are Rich

New Orleans   Looking at the soaring stock market and the touts’ claims of an improving housing market and corporate profitability, I would have hoped that what I call “citizen wealth” or the average family’s overall income security would have also come back strong.    So far, not so much.

            A big part of the problem in this recovery is plain and simple inequality.  The Federal Reserve in Washington estimates that Americans as a whole have regained 91% of the $16 trillion that we lost from the 2007 to 2009, but the Federal Reserve Bank in St. Louis has also found in a recent report that the “typical household” has “regained only half of its wealth.”  The average American family in 2013 is only 45% as financially secure as they were in 2007.  Part of the problem is that a lot of what I might call that “statistical security” is based on the rising numbers that come from stock market speculation.  In fact two-thirds of the citizen wealth recovery since 2009 according to the St. Louis fed is due to rising stock prices.  And, as Christopher Rugaber of the Associated Press notes, “Those gains disproportionately benefit affluent households:  about 80 percent of stocks are held by the wealthiest 10 percent of the population.”

            As I pointed out in my book, Citizen Wealth, for average families of low-and-moderate income much of what we have for income security is held in our homes and the amount of the mortgage that is paid off to the bank.  Home prices around the country are still 30% of what they were in 2007, and the weird codependency of bankers and the Obama Administration that allowed them to resist modifications for home owners facing foreclosures has prolonged and perhaps indefinitely postponed any recovery for most of us.

            You get an idea how stratified class is becoming in America when you look at average household net worth.  First think about where you stand once you add up your house, if you have one, the age of your car, the slimness of your savings account, and what not.  Then, sit down as you take this in.  The average household at the end of 2012 had a net worth after all of your debts and loan payments of $539500, making most American households semi-millionaires.   Good news might be that that was up more than a hundred grand from the $469,000 in 2009 in the doldrums of the recession, but still down by a hundred grand from the $641,000 where the average sat when the bell rang on the spring of 2007 before the collapse.

            If you are scratching your head and saying, hey, Wade, is that really the average, because here’s all I have, then you have finally come to grip with two things:  one, how precarious your own citizen wealth is, and, secondly, how rich the super-rich and their gang are to be able to amass so much that they can pull the average up so high over your head.   When you look at the ceiling over your head, you’re wondering how much rain may come in.  When they look at the ceiling, they are seeing nothing but blue sky, baby!

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