Saturday, October 4, 2008

Squeezing the Middle Class

Things are getting tighter. Less jobs and less access to credit already. Now we are told we just spent $840 billion on a bailout with add-ons. But this is probably the first request. Many analysts are saying it could easily be $2 trillion when things are said and done. So how is that affecting the average American? This article from McClatchy Newspapers service (found in the Idaho Statesman) titled Economists may not call it recession, but job stats say it is puts things into perspective. Lets take a look -

The combination of falling home equity, the rising cost of food, health care and housing, tighter credit and eight straight months of job losses — 84,000 in August alone — has put the squeeze on middle-class families struggling to stay afloat in a slumping economy.

Even college graduates are feeling the pinch. Their 2.7 percent unemployment rate is the highest since 2004, while the 9.6 percent unemployment rate for workers without a high-school diploma is the highest since 1996.

Most of the August job losses were again in the manufacturing sector, which shed 61,000 positions, the most in five years. In the past seven years, 20 percent of manufacturing jobs have disappeared despite improving U.S. export numbers, said Scott Paul, executive director of the Alliance for American Manufacturing.

Falling gasoline prices will help many families. But Ken Goldstein, an economist at the Conference Board in New York City, doesn't think that consumers dealing with rising inflation and health-care costs will notice much difference.

Many companies already have cut employee health coverage or shifted more of the costs to covered workers through higher deductibles, co-pays and out-of-pocket spending. Currently, average annual worker contributions for single and family coverage are $694 and $3,281, respectively, according to the most recent data by the Kaiser Family Foundation.

Well we do know one business that seems to be looking up - unfortunately trash outs. As the economy tightens we will be seeing even more job losses in the service and retail sectors. More foreclosures.

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