Meckz.net

Notes from the Widening Class Divide

tanya77:

newsweek:

Rana Foroohar on the outlook for the kids entering the job market today:

Unemployment and the specter of instability it creates will really shape the behavior of Generation Recession. A weaker dollar will make all Americans feel poorer by raising the cost of goods, but the young generation graduating and going to work now may actually end up poorer in real terms. Unemployment among 20- to 24-year-olds in the U.S. is more than 15 percent, compared with the nationwide average of 10 percent, and statistics show that for every percentage point in higher unemployment, new graduates take a 6 percent pay cut—an effect that lasts for decades. Skills loss could be a huge issue, too, especially because the average duration of unemployment has increased. Although wages in the U.S. have been relatively flat since the 1970s, Generation Recession may be the first in 30 years to see theirs actually fall.

[This] data underscores another megatrend that Generation Recession will have to deal with: the growing divide between the fortunes of big American firms and the average American worker. Markets may be up, yet unemployment, while slightly down, is still at its highest level in decades, and even the most bullish economists believe it will stay higher than average for years to come. Large U.S. firms are well into the black, in part because of the labor-cost savings they’ve enjoyed from IT improvements and offshoring to cut expensive U.S. jobs, yet the small- and medium-size firms that generate the majority of new jobs at home have been hurt most by the financial crisis as their lines of credit have dried up. “We are in a very unique period, in which we’re seeing the biggest disconnection between financial capitalism and the real economy since modern economies began in the 19th century,” says Nobel laureate and Columbia economics professor Edmund Phelps, who runs the university’s Center on Capitalism and Society. “That’s not to say that banks don’t fund some useful projects like wind farms or whatever, but increasingly they’re existing in a virtual sphere in which they are more interested in funding each other, and developing complex securities, than in funding real businesses.”

And Media Corporations are baffled as to why Interent Users “don’t want to pay for anything online”.

And, an even bigger head-scratcher (well, sort of, my cynical side asks why I’m surprised) is why, in this climate of near Gilded Age rich/poor divides, and with a near supermajority in the Senate, the Democrats are scared to raise taxes on the über-rich.