Eight years of the ‘Obama’ recovery sees more college graduates than ever working a minimum wage job
A new White Paper out from¬†the Washington-based Georgetown University Center on¬†Education and the Workforce shows that not only have wages been stagnant over the past two decades, but more college graduates are being stuck working in minimum wage jobs than ever in history.
Citing facts that show even salaries of higher skilled vocations have declined over the past eight years of the ‘Obama recovery’, the value of a college education is no longer worth the cost due to an average of $30,000+ in student loan debt, and the rising price inflation that has destroyed the American middle class.
Wage stagnation, which has plagued the US economy for¬†almost two decades, is particularly acute when it comes to¬†recent college graduates, whose living standards happen to¬†be the lowest of¬†all the post-WWII generations of¬†Americans.
While a record number of¬†young professionals are working minimum wage jobs, the role of¬†formal education as¬†a means of¬†social betterment is rapidly eroding as¬†it also entails a massive accumulation of¬†student debt, averaging at¬†some $30,000 per student.
Since the Great Recession, worker compensation for¬†recent graduates with¬†four-year bachelor‚Äôs degrees has hardly increased, and, in¬†some cases, has actually shrunk. While the past¬†eight years were characterised by¬†low inflation and near-zero interest rates, the recent acceleration in¬†price growth and the Federal Reserve‚Äôs lifting of¬†base borrowing costs are starting to¬†bite. The heavily-indebted college grads are mired in¬†economic despair, and there are no immediate solutions to¬†the gaping abyss of¬†highly-qualified poverty.
According to¬†a white paper by¬†researchers from¬†the Washington-based Georgetown University Center on¬†Education and the Workforce, young professionals are facing low wages combined with¬†significant increases in¬†rents and home prices, as¬†well as¬†other living costs, both essential and complimentary.
Based on¬†US Census figures, the research shows that a biology major, for¬†example, earned an average of $31,000 per year in¬†2015, some $4,000 less than¬†five years prior. When adjusted for¬†inflation, the loss in¬†effective wages is even more spectacular. – Sputnik News
In 1960 the average (median) income of an American family was $5,600 per year. ¬†In that same year the minimum wage was around $1.29, making the annual income of a minimum wage worker to be $2,683. ¬†This meant that the difference between the incomes of a middle class family and that of an individual working minimum wage was roughly 45-50%. ¬†Yet perhaps the most ironic thing is that if you took that $1.29 wage and extrapolated it into today’s dollars using real inflation, the value is only mildly different (8%) than the actual minimum wage in 2017.
Minimum wage in 1968 in 2016 dollars: $8.68. ¬†Real minimum wage in 2016 was $7.25
No the real travesty is the rise in price inflation since the early 1970’s when the dollar was taken off the gold standard coupled with the nearly complete stagnation in real wages since the late 1970’s. ¬†And as such, income has not kept up with the incredible loss of purchasing power of the dollar, making it a complete double whammy to the American lower and middle classes.
That point of divergence? ¬†1973 and the creation of the petrodollar system.
In the end a college education no longer matters since the value one used to gain before wage stagnation and the destruction of the currency makes it impossible for one’s Degree to make a difference over someone who never went to college. ¬†And because of this there is a most interesting turning of the tables, as someone who never went to college, and in particular accumulated student loan debts in the process, has a much greater net worth than those with a four, six, or eight year Degree, and is also further ahead since they have had four years of work experience to climb the ladder, even if it is just in a lower skilled vocation.
Kenneth Schortgen Jr¬†is¬†a writer for The Daily Economist, Secretsofthefed.com,¬†Roguemoney.net, and Viral Liberty, and hosts¬†the popular youtube podcast on Mondays, Wednesdays and Fridays.¬†Ken can also¬†be heard Wednesday afternoons giving an weekly economic report on the¬†Angel Clark radio show.