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2018
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Frank Bernheisel: The View From Here
Frank Bernheisel
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Frank Bernheisel
Posted 11.01.16
Just Outside Washington

FRANK BERNHEISEL

Mad as Hell

All of the talking heads in Washington and elsewhere are trying to explain why there is so much anger in the U.S. voting public. I think that Bill Clinton got it right in his 1992 campaign when he said: "it's the economy stupid."

How can that be, when the U.S. Census Bureau reports that incomes for families grew by a record amount in 2015. This brought the Median Household Income to $56,516. [Note: this includes the income of all workers in the household; father, mother, children, etc. Also, the unemployment rate in the U.S. has steadily fallen to less than half of what it was in 2009.]

Much of the reported anger comes from the so called "blue collar workers". It is tough to check the color of everyone's shirt statistically so the American Community Survey uses the term "middle-skilled" workers; defined as those with some post-secondary experience but less than a bachelor's degree.

The chart below shows the breakdown of individual salaries by the amount of education. This survey shows what we all know; education pays off in the workplace. It indicates that, in 2015, if you had a bachelor's degree, as single individual you could expect to earn about 90 percent of the Median Household Income. However, if you had only some college and I assume equivalent training, i.e. "blue collar", you would expect to earn only about 60 percent of the Median Household Income.

chart

But wait, there's more. Remember the Great Recession? As the following graph shows, everyone's income, regardless of education, went down from what it was in 2007. Through 2011 the downward trend continued. (Ignore the blips.) Notice that the 'blue collar' (some college) continued on down until 2013 and declined from 100 percent of their income in 2007 to only 87 percent. And, nobody lost more than the 'blue collar' workers in the Great Recession. Even when they started to recover, the blue collars recovered less.

chart

Keep in mind that some areas did better than the national figures shown. For example: the declines were only 3 percent in the San Francisco area but 17 percent in Riverside-San Bernardino for the period 2007 to 2015. Further, there are many other factors that impact employment and wages. But we do not want to get down into the weeds.

Bottom line, given the political mantra that Bill Clinton expressed: it's the economy stupid; it appears to me that the blue collar workers have something to be angry about.

Congress has done almost nothing.

A major highway program to fix our deteriorating highways funded by an increase in the gas tax would have been almost painless and created good paying jobs. (Painless, because the price of gas dropped from $4 in 2008 to about $2 in 2015, due to the crash in oil prices.) There are hundreds of things that need doing in the U.S. and doing them will create jobs.

We need people in Congress who can identify problems, propose solutions and identify ways to pay the costs.

We have but a few days remaining before the November 8th election. We have little time remaining to sort out the problem solvers from the 'true believers' who tell us how firmly they will hold to their beliefs.

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