Eight years of the ‘Obama’ recovery sees more college graduates than ever working a minimum wage job
A new White Paper out fromÂ the Washington-based Georgetown University Center onÂ 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 forÂ almost two decades, is particularly acute when it comes toÂ recent college graduates, whose living standards happen toÂ be the lowest ofÂ all the post-WWII generations ofÂ Americans.
While a record number ofÂ young professionals are working minimum wage jobs, the role ofÂ formal education asÂ a means ofÂ social betterment is rapidly eroding asÂ it also entails a massive accumulation ofÂ student debt, averaging atÂ some $30,000 per student.
Since the Great Recession, worker compensation forÂ recent graduates withÂ four-year bachelorâs degrees has hardly increased, and, inÂ some cases, has actually shrunk. While the pastÂ eight years were characterised byÂ low inflation and near-zero interest rates, the recent acceleration inÂ price growth and the Federal Reserveâs lifting ofÂ base borrowing costs are starting toÂ bite. The heavily-indebted college grads are mired inÂ economic despair, and there are no immediate solutions toÂ the gaping abyss ofÂ highly-qualified poverty.
According toÂ a white paper byÂ researchers fromÂ the Washington-based Georgetown University Center onÂ Education and the Workforce, young professionals are facing low wages combined withÂ significant increases inÂ rents and home prices, asÂ well asÂ other living costs, both essential and complimentary.
Based onÂ US Census figures, the research shows that a biology major, forÂ example, earned an average of $31,000 per year inÂ 2015, some $4,000 less thanÂ five years prior. When adjusted forÂ inflation, the loss inÂ effective wages is even more spectacular. – Sputnik News
In 1960 the average (median) income of an American family was $5,600 per year. Â In that same year the minimum wage was around $1.29, making the annual income of a minimum wage worker to be $2,683. Â 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%. Â 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. Â 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. Â 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? Â 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. Â 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 JrÂ isÂ a writer for The Daily Economist, Secretsofthefed.com,Â Roguemoney.net, and Viral Liberty, and hostsÂ the popular youtube podcast on Mondays, Wednesdays and Fridays.Â Ken can alsoÂ be heard Wednesday afternoons giving an weekly economic report on theÂ Angel Clark radio show.