The Mighty U.S. Consumer Is Struggling

And it doesnt take into consideration people that gave up looking for work because they couldnt find it and no longer receive unemployment benefits.

There is also the U6 unemployment rate which adds is discouraged and part time workers who desire full time.

Wages have been rising too, for the first time in many years.

This is truly a time of economic prosperity (at least in the US). It won't last forever. Make whatever moves you have available to you at this time to prepare for the times ahead.

Like the boom years of Reagan and Clinton, we'll all look back at this time later and say "What an opportunity!" Sadly, there inevitably will be a fall like 2000 or 2008 at some point to bring us back to earth.

The tax bill was designed in a way to make people's previous withholdings inaccurate (although theoretically more accurate overall). That was politically motivated for two reasons. People were more likely to see a positive (or less likely to see a negative) impact on their paycheck from the tax bill passing. Republicans have also historically wanted to make the act of paying taxes more painful for the average American on the belief that it would generate political motivation for lowering taxes. Tweaking the withholding rules to result in larger payments (or lower refunds) when filing taxes is part of that plan. Both those points have nothing to do with whether the overall tax plan was beneficial for the average American or the country at large.

Which, by the way, was a suprise due to the mostly-unpublicized changes to the withholding rates.

Add in tax penalties and it's a very unwelcome suprise for all but the most vigilant / those that pay people to manage their money.

We track unemployment (at several different levels). Isn't the relevant question how many people don't have a job? Or are under-employed?

Most people did not save a meaningful amount of money while the wealthy got a massive benefit in comparison.

From your link:

> The middle fifth of earners got about a $780 tax cut last year on average, according to the Tax Policy Center.

> The top 20 percent of earners received more than 60 percent of the total tax savings, according to the Tax Policy Center; the top 1 percent received nearly 17 percent of the total benefit, and got an average tax cut of more than $30,000. And that’s not even factoring in the law’s huge cut to corporate taxes, which disproportionately benefit the wealthy households that own the most stock.

Hence (rightfully so) pitchforks. The average American taxpayer was bamboozled.

I know for an undeniable fact I paid more in federal taxes (if you account for inflation) but I'm one measly anecdotal data point.

I suspect most who don't believe it are like me or saw modest cuts. Perhaps if I saw the data and analyzed it myself I might believe it, otherwise, I suspect the majority got small tax cuts while the very few ultra wealthy enjoyed significant cuts.

The biggest problem with the new tax plan is that the withholding tables changed to be more accurate. This is because a large number of people's standard deduction went up enough to almost match, or exceed, their mortgage interest and SALT deductions.

And since payroll withholding doesn't account for the mortgage interest deduction, but does count the standard deduction, they ended up taking out less taxes (basically giving everyone a couple hundred dollar "raise") during the year, which made the year-end refund much smaller.

And too many people budget big items based on that year-end overpayment refund, instead of setting aside that extra pay every month. So lots of people feel like their taxes went up.

Now what would have been nice is if there was an information campaign that would have business encourage employees (via auto payroll deposit) to divide their paycheck into checking and savings accounts, having that "extra" money go into savings automatically.

I didn't get a tax cut, my bill went up.

This is just anecdotal but I have no regrets about being anecdotal in response to bald hyperbole

> Every. Single. One.

I also object that a number of arts programs that interest me have gotten budget cuts that seem (though the government is large and opaque) to outweigh the money saved by the tax cuts I've seen other people get.

I really don't care about what portion of my out-of-pocket expenses go to the government, I care about the size of my take home - so when taxes go slightly down and cost of living goes up I'm unhappy. And for me, everything went up (and my salary isn't stupid high either)

So many reports that you didn't bother linking to one? I'm sorry, but this seems heinously misinformed given that our debt/equity ratio keeps growing.

It's not just about numbers, but also about income disparity. Upper class incomes are increasing faster than the lower and middle class. The upper class is also the only one who see any real income growth from 2000 - 2016, hinting at the underlying issues that the middle class faces. Jobs existing, but they no longer provide real wage growth or advancement opportunities they once did.

In general, a wide gulf is forming between the upper and lower classes with the middle class being more aligned with the lower class as opposed to the upper class. If allowed to continue, this will essentially destroy the middle class in the long term, as they will eventually merge into either brackets.

https://www.pewresearch.org/fact-tank/2018/09/06/the-america...

I hate to be that person, but I'm going to need some citations for that. After searching for 'intragenerational financial mobility' it seems that the US is awful at it.

So, citations for your claims?

Actualy the lower class has expanded by a few percentage points (it's not constant) due to the vast immigration of low skill workers from Latin America, while the middle class has (as you noted) been persistently moving up for decades (leading to the upper classes gaining a few percentage points).

You can see this represented over the last ~40 years based on the demographics of each bracket. All one has to do is look at the Fed's current household reports on race when it comes to wealth and income, which lays all of this out in a clear manner. White and Asian households have heavily moved up out of the middle class, while Hispanic and Black households now dominate the bottom 50% of households on income and wealth. As recently as 1980, the US was only 6% Hispanic demographically. By 2000 that had doubled to 12%, and was at 16% in the 2010 census.

Further to this point, the White demographic is now contracting. It's primarily the Hispanic demographic where population growth is occurring, and mostly via immigration.

The big middle class question for the next 20 or 30 years, is whether the huge influx of people from Latin America into the US will be able to move up over time through education and skill acquisition, and whether Black households will similarly gain.

Citations please.

This is contrary to the figures I've seen surrounding an expanding portion of the populace below the poverty line and increased income inequality.

Sorta, it's also a broken political system. Polls about whether we should increase the stringency of background checks prior to gun ownership are overwhelmingly in favor of increased checks but nothing happens. In this case it's not a populace being tricked into expressing an interest in policy that harms them - it's politicians just outright ignoring the populace.

I agree about the way this is going and, well, I've emigrated, I hope the rest of my family follows.

Here's an interesting observation on MarketWatch;

> Income was subdued. The slight 0.1% gain in March follows a 0.2% gain in February and a 0.1% fall in January. Year over year, personal income is up 3.8%, moderate by historical standards. Disposable income was flat in March.

> The weakness in income was concentrated in proprietors’ income. Wages and salaries rose 0.4% in March after a 0.3% gain in the prior month.

It makes sense that strong job growth at lower incomes, and low-income wage growth, would squeeze proprietors' profit margins, but if it were merely redistributing income, wouldn't the overall rate stay the same?

EDIT: I think if you look at Table 1 in the full report it gives better context. [1]

[1] - https://www.bea.gov/system/files/2019-04/pi0319_0.pdf

It bypasses the paywall.

It removes the autoplay video ad, the floating banner ad header, and the paywall footer that make me read the article in 3 inches of vertical space.

It cuts out the sidebar/header content, along with all the usability-breaking stuff sites normally dump on us. Isn't that enough?

I hate that it's depriving them of views and revenue when they did legit journalism[1], but considering how webcancerous most news sites are, and how it probably wouldn't cost them much on net to revert to a sane design, I don't feel all that bad.

[1] other than worshipping the mantra of "the Economy depends on high consumer spending", of course.

Mostly it's just to make articles (text content) readable as their text content.

I, personally, have little patience for being advertised to or being asked to check out "interesting related content"... someone linked an article they thought was worth reading so I wanted to read it, this makes reading the article as simple and direct as a plain text file.

I linked it here because I know other folks enjoy it and I thought it'd be considerate to minimize the number of times the article needed to be reparsed to strip out the weird bits.

Yes, and I think those invested in the last year are going to lose big.

I believe in the 7% yearly number we were taught. But I also can see the economy is damaged.

He is probably referring to the fact that most people pay their property taxes out of escrow holdings along with their property insurance. Payment into the escrow account is part of your monthly bill and is rolled up into the "mortgage" payment even if it is not actually part of the mortgage. Most people won't even request these broken out by line. In those situations, you would expect your monthly payment to change year to year based on property tax assessment.

Since it seems that many people can't differentiate between total tax rates and tax refunds, it seems reasonable to assume that people would consider their property tax escrow part of their mortgage payment.

The only thing I can come up with is the OP is implying escrow is making his payment change monthly?

Property tax payment dispersals are handled by bank, which is the rule and not exception in Chicago.

And I promise you, assessments here have gone up orders of magnitude more than 2%. In some parts of the city it's gone up by 30%[1]

Point taken about an anecdotal experience affecting national spending.

https://www.chicagotribune.com/news/ct-met-cook-county-prope...

The tax change has been in effect for a year now.

And, yes, that's my point regarding inflation. A 3% annualized change, adjusting for 2% inflation, is a 1% annualized change. While that may be interesting if sustained, over a few months it's not evidence of much of anything at all.

I'm saying that the act of raising minimum wage DOES NOT EFFECT how much land owners win / loose. It DOES cause the price of everything to go up however, so it has the net effect of wrecking the middle class.

To actually increase //quality// of life, the good things must cost less to buy; that is achieved through taxing profits, increasing supply, and well designed market regulation in general.

It's even less than you'd think - the country's largest employer - WalMart - which is often stomped on as a 'minimum wage employer' only had 4,000 workers on minimum wage a few years ago, and has since raised their own minimum wage to $11/hr nationally.

Minimum wage jobs are in fact exceedingly rare beyond entry level 'starter' jobs...

You do not understand the argument: this is NOT about the cost to employers.

This is about ECON101; If the 'take home' money is more for the lowest end of employees, the price that the market is able to pay for goods that have NOT increased in quantity rises to absorb all of the added take home pay.

TL;DR at bottom

define small, so about twenty percent to labor is small? start inching up from there and many get scared quickly. plus it won't move many out of poverty what it will do is move many who are not employable out of a job. the people you hire at $15 are going to be held to a higher standard than those you would accept at $8, $9, or even $10. Plus you will get people come out of the wood work would never have considered "stooping" to such a job but for $15 an hour its fine then.

So Mr Tattoo who has a bit of an attitude problem but you take him because he is available for $8 isn't someone you will let cross the threshold at $15. Little Ms May who is always late or out sick will be on the other side of the counter. Why, because once you break a mental threshold in pay you get people who would not had considered working there. Now they won't all be seeing a career but they will see a job that is worth their time.

You want to help those in poverty. Then get government off their backs. From expensive government services and fees, to ordinance inspectors who troll poor neighborhoods, to the cops and legal system who prey on the very same. That $20 bucks you paid to update your license could be make or break it for some and that is just the tip of the ice burg. More low paying jobs are in regulated occupations which forces the poor to incur debt just trying to get licensed to work.

TL;DR $15 an hour won't change the attitude of those demanding it, they will feel even more entitled because they are not suited for employment. Won't matter because it will bring out those who are.