By José Niño
Americans generally take for granted that economic prosperity is always around the corner. The prevailing assumption of U.S. politics since the end of World War II is that every individual has the freedom and opportunity to economically thrive and improve their lot in life through hard work and following the rules.
Click the Link Below to Listen to the Audio of this Article
The American dream ethos animates U.S. politics and has served as a magnet for millions of migrants worldwide, as they try to strike it rich in the United States. However, this assumption might be on its way out.
Spanish economist Daniel Lacalle penned an article titled “Americans are Poorer. The United States Misery Index Rises Again” detailing some lurid realities about the current economy.
Lacalle noted that the country’s unemployed rate moved upward to 4.1 percent, the highest level in three years. This figure is considerably higher than the unemployment rate before the government’s draconian response to the Wuhan virus pandemic.
A sizable portion of job growth is spurred by increases in unproductive government jobs. According to Lacalle’s analysis, “a 70,000 increase in government jobs boosted payroll employment by 206,000.”
In effect, one-third of jobs created come from public sector jobs that are financed with additional debt. The national debt currently hovers close to an astronomical $35 trillion.
Even more frightening is that the employment-to-population ratio and the labor force participation ratio stand below pre-pandemic levels and immigrants make up nearly all labor force growth since the pandemic, per official figures from the Bureau of Labor Statistics (BLS).
Despite what some pundits say, America’s inflation problems are not “transitory” in nature. The ever-present scourge of inflation has reduced American citizens’ purchasing power by over 24% since 2019. Additionally, there has been a 0.6% negative real wage growth from January 2021 to June 2024. Thus far, real wage growth in 2024 has only increased by 0.8% on a year-on-year basis.
The average American is clearly becoming poorer, while the wealthy have grown richer by virtue of holding assets such as stocks. A Business Insider report published in January revealed that the wealthiest 10% of Americans own 93% of stocks, which further exacerbates the wealth gap.
The United States wasn’t always a highly financialized nation. Right after World War II, the U.S. economy made up 45% of global gross domestic product, largely buttressed by a robust manufacturing economy. In the present, America’s share of GDP has fallen to 26%, according to International Monetary Fund projections. This figure remains remarkable, but the nature of the U.S. economy has transformed in the intervening decades.
Several market reforms implemented during the 1980s and 1990s have caused deindustrialization. According to research from UCLA sociologist Greta Krippner, close to 40% of the U.S. workforce was employed in the manufacturing sector in 1954. By contrast, close to 5% of the American workforce worked in the finance, insurance and real estate sector. The decimation of European and key Asian economies, such as in Japan after World War II, had put the United States in an enviable position as it became the world’s factory for a brief period of time.
However, the character of the American economy has radically changed since the end of the Cold War. According to figures published by the BLS in 2022, just 12.8% of Americans were employed in productive sectors such as construction, mining, and manufacturing. By contrast, an overwhelming 70% of Americans are currently working in the service sector. For comparison, just 15% were employed in that sector in 1954.
Joseph Jordan, the author of “Littoria” on “Substack,” has routinely noted that becoming middle class in the United States is becoming a fleeting prospect. Generally speaking, two incomes (or more) are required to reach that status. However, that’s becoming a tenuous proposition with mass inflation and the concurring cost of living increases witnessed in education, healthcare, and housing. In 2019, the Brookings Institution found that 44% of American workers are employed at jobs that pay a meager $18,000 or less annually. These individuals will likely wind up on the dole, putting further stress on America’s bloated entitlement spending.
Despite what regime propagandists say, things aren’t looking so hot for the U.S. economy. It’s increasingly resembling one from a third-world polity, where the rich live in complete luxury while millions slide into precarious economic conditions.
A total facelift of the American economy is needed for the country to correct course. This will require a return to sound money, a major reduction of the regulatory state, simplification of the tax code, and a rollback of entitlement spending, among other reforms—all daunting to say the least.
If we’re being brutally honest, there’s no one on Capitol Hill who is currently willing to undertake these reforms. As a result, Americans are destined to economically suffer for the near future, at least.
José Niño is a freelance writer based in Austin, Texas. You can contact him via Facebook and Twitter. Get his e-book, The 10 Myths of Gun Control at josealbertonino.gumroad.com. Subscribe to his “Substack” newsletter by visiting “Jose Nino Unfiltered” on Substack.com.
