Lots of people feel poorer in Ocala, Marion County, or anywhere in mid-central Florida. The recession, inflation, and lower wages make most Americans feel poorer… because they are!!
THE GREAT RECESSION
Mid-wage occupations (paying $13 and $21 per hour), made up about 60% of the job losses during the recession. In economist talk, the recession ended long ago. However, those mid-wage jobs grew back as only 25% of the jobs since the recession started. Low-wage jobs (paying less than $13 per hour) have grown by almost 60% since the recovery started.
WHAT ARE THE NEW LOW-WAGE JOBS?
There are three primary sectors that have grown. They are food service jobs, retail jobs, and low-wage health care jobs. These are all important jobs, and workers should be paid a decent wage for a decent, hard-day’s work! The wage growth for these jobs just hasn’t developed, at least not yet, which makes people feel poorer – because they are.
WHERE DID THOSE DECENT PAYING JOBS GO?
Some blame shipping jobs overseas. Some see automation as replacing the good, decent jobs. The ones where you work hard, do a good job, and get rewarded for it – the American Dream. A combination of factors probably is to blame. But Dayco, Mark III, and even Lockheed-Martin’s decent jobs are not coming back. They are replaced by food service, retail, or low-paying health care jobs.
“REAL” INFLATION
Despite what the Government says the rate of inflation is, it’s always been more than that. Inflation as measured by the government is really what it calls “core inflation.” Many real life expenses go up, but are left out of the formulas, supposedly because they fluctuate too much. They do fluctuate, but in a steady trend upwards. Fuel, groceries, and heath care costs fluctuate a lot, but they also rise the highest. This is not a government “conspiracy,” in the secretive use of the word, though lawmakers would probably prefer that most people don’t notice this. Economists and other observers know it because they see the publicly available governmental statements and data.
A dollar’s actual “purchasing power” today is far less than it was 10, 20, or 30 years ago. Pick your time period. But even pensions, social security payments, or employers that try to keep up with inflation are really falling behind on what Americans really need to survive.
MINIMUM WAGE IS NOT A “LIVING WAGE”
Minimum wage used to be what was necessary to have a basic “no-frills” life style, but one that a person could live on. It is woefully short of that now. The minimum wage in Florida is currently $8.10 per hour. For a 40 hour work week, times 4 weeks in a month, that’s about $1,300 per month Gross Pay. That’s really closer to $900 per month or so take home pay. It’s extremely hard for one person to live on that. Imagine if you have a dependent or two!!
SOLUTIONS?
Plenty of idea are out there, but have not come to fruition. One good idea, in my opinion, could be to “tech-up” some of the traditional jobs so they are no longer low-wage. A health care worker with an iPad or Tablet could perform better screening. In food service or retail, the data gathered in the course of doing one of these jobs could benefit the employer with better information to make its business more successful.
AN ACCUMULATION OF PROBLEMS
Added to all of these issue are the problems that have always existed. I’m talking here about the unexpected, unwanted surprises life has to offer. These obviously make people feel poorer. They include the loss of a life partner, sudden job loss, medical issues causing a loss or break in steady wages, or a family member where you are the one kind enough to help even to your own financial detriment.
BANKRUPTCY AS A HELPFUL TOOL
I practice Chapter 7 Bankruptcy Law. I’ve done so for over 35 years in Ocala and all of mid-central Florida. Bankruptcy is a “tool” that can help adjust your budget by eliminating debts taken out when there seemed to be every reason to believe they could be paid back.
This also applies to debts taken out “because” of the unexpected surprises. Living on credit at these times is often the only way to survive, and there perhaps never was a view that these debts could be paid back, other than hoping for the best. Unfortunately, bankruptcy law can’t make up for lower wages or higher every-day expenses. But often, by eliminating debts that you had to take out to get by (while also preventing wages or bank accounts from being seized), it reduces the overall expenses in your budget without cutting out the expenses needed for a decent life.
Peter Blinn
For over 35 years, listening to clients and putting them at ease, while meeting their needs and helping achieve future goals, in Marion County (Ocala, Belleview, Dunnellon…); Lake County (Leesburg, Tavares, Mt. Dora, Lady Lake, Clermont, Fruitland Park…); Citrus County (Crystal River, Inverness, Homosassa, Hernando…); Sumter County (Bushnell, Wildwood, Webster, Lake Panasoffkee…); the Orlando area, and The Villages.
