Posted on 07/05/2003 11:36:42 AM PDT by sarcasm
WASHINGTON (Reuters) - When mutual fund powerhouse Fidelity Investments wants new ideas, one of the places it goes is Inferential Focus, a quirky New York prognosticating firm.
In their efforts to predict the future, the company's staff of seven, led by President Charlie Hess, read 350 publications on a regular basis. They ignore most of the noise -- surveys, prognostications, formal speeches and staged events -- and look for actual occurrences that can point to changes in American society, which can then be spun off into investable ideas.
What they are finding now is this: We're going down. Downwardly mobile, that is.
Even though the worst of the bear market might be behind us, the American middle class will continue to lose ground and the American consumer will continue to be squeezed for some time to come, said Hess and Gail Eisenkraft, one of his partners, in a recent interview.
They find that to be true at both middle and upper levels of the income spectrum. That has implications for the way we all spend and invest our money.
It's no secret that the U.S. has been on a rich-get-richer, poor-get-poorer track for several years. Most recently, the Labor Department said that the top 5 percent of America's wealthiest households earned 22.4 percent of national income in 2001, the most recent year for the compilation of these figures. That is its highest share since figures were first collected in 1967.
The lowest class, meanwhile, earned its smallest share, 3.5 percent. The middle section is slipping too.
Middle income households, which in 2001 earned between $33,315 and $53,000, earn 14.6 percent of American income every year. That's another 35-year low. Hess and Eisenkraft now say that this slump is spreading to the better-off, who are starting to act more like the less-well-off.
There are specific economic forces that will continue to hold the middle class down, says Hess.
Here are some of the events and trends that he sees working together to create a middle-class slide: the export of technical jobs and the continued unemployment of many American tech workers; the squeeze on state economies that will result in higher state taxes, fewer state services, and higher-priced state educations; the triple threat of high health-care costs, high debt burdens and continued weak stock prices and battered portfolios.
As a result, even the upper-middle class is starting to downscale spending habits and life style.
'We're seeing those pressures converge on the reasonably affluent household,'' says Hess.
More resourceful parents are sending their children to community colleges for the first year or two of higher education, just to save money. Everyone is shopping discount.
``The Dollar Store near Beverly Hills has shown more growth than any other Dollar Store in the country,'' Eisenkraft notes.
Maybe that's not all a bad thing. Perhaps if everyone is worrying about their money, they will spend less on empty status items, and nobody will have to be ashamed of being budget conscious. It might even be considered cool to shop the sales.
What, besides handwringing, can a squeezed middle-class person do?
Shop down and invest like everybody else is shopping down, suggests Hess. ``We are talking to our investor clients about the many plays that might result from the search for cheaper upscale and cheaper downscale.''
You can live well and spend less by nailing down a 15-year mortgage instead of a 30-year mortgage while rates are low; by buying used cars instead of new, and by looking for freshman-year college bargains, Hess suggests.
You can make money in the market on this trend by buying companies that sell used cars, good clothes at a discount, product manufactured homes or quality items at commodity prices, like the big warehouse stores.
Look, too, at for-profit trade schools that could benefit once middle-class students realize they are graduating college with tens of thousands of dollars in debts and no solid job prospects to speak of, suggests Eisenkraft. That's just one more way of investing in the downscaling of America, so that even if you're down, you can be up, at least a little.
Also, the last paragraph about education was profound indeed. Maybe people will quite looking at universities as glorified trade schools and recognize them for what they should be; that is NOT places to learn to be productive citizens, but rather places to be GOOD citizens.
The poor get poorer?!
What nonsense!
Who wants to assert that the "poor" today physically earn **less** than the poor of "several years" ago?
The "Poverty Level" today is around $14,000 per year for an average household. That's more than the middle-class average income in the 1950's.
The poor get "poorer"?!
I think not.
Have you forgotten about inflation?
Are you claiming that average salaries/wages have failed to keep up with inflation?
Average Administrative Salaries
OfficeTeam's 2000 Salary Guide contains some of the most up-to-date, "real world" salary and staffing trend information available. Job descriptions and a regional analysis of hiring trends and selected local salary variances are also included in the guide. You can request a copy of the Salary Guides through OfficeTeam’s Web site, www.officeteam.com, under "free resources" in the Career Corner section.
Here are the U.S national averages for various support titles/levels and average percentage increase from 1999 to 2000 (Canadian national averages are also included).
|
Title |
|
Salary Range | % increase from 1999 |
|
Front Desk Coordinator |
|
$21,000-$26,000 | 2.2% |
|
Junior Administrative Assistant |
|
$20,250-$23,000 | 6.1% |
|
Administrative Assistant |
|
$21,500-$26,500 | 5.5% |
|
Senior Administrative Assistant |
|
$25,000-$35,500 | 3.4% |
|
Executive Assistant |
|
$28,500-$34,750 | 5.4% |
|
Senior Executive Assistant |
|
$33,500-$46,000 | 2.6% |
|
Office Manager |
|
$26,500-$33,500 | 5.3% |
|
Senior Office Manager |
|
$33,000-$44,000 | 2.0% |
According to the OfficeTeam guide, "Administrative Assistants who possess the Certified Professional Secretary (CPS) rating through the International Association of Administrative Professionals may command higher starting salaries." In addition, a new section on employee retention added to the salary guide this year also suggests that employers offer administrative staff paid association membership to build contacts and develop professionally.
Average Annual Salaries for Secretaries/Administrative Support Staff
1951-1999
Data based on research from the International Association of Administrative Professionals (IAAP) and other sources as noted.
1951
Average Annual Salary
Secretary: $3,060 (membership survey)
1965
Average Salary
Secretary: $5,678 (membership survey)
1975
Average Salaries (membership survey)
60% reported salaries of $9,000 or more
32% in the $9,000-$11,000 range
17% in the $11,000-$13,000 range
7% in the $13,000-$15,000 range
4% at $15,000 and over
1980
Average Salaries (membership survey)
| Under $10,000 | 14% |
| $10,000-$11,999 | 16% |
| $12,000-$14,999 | 33% |
| $15,000-$16,999 | 22% |
| $17,000-$19,999 | 12% |
| $20,000 or more | 4% |
1983
Average Salaries
U.S. Bureau of Labor Statistics, 1983
| Secretary I | $14,732 |
| Secretary II | $16,031 |
| Secretary III | $18,254 |
| Secretary IV | $20,032 |
| Secretary V | $23,137 |
Administrative Management Society Survey, 1983
| Level B | $13, 468 |
| Level A | $15,080 |
| Executive Secretary | $17,628 |
IAAP Salary Study, 1983
| Below $10,000 | 3% |
| $10,000-$12,999 | 12% |
| $13,000-$15,999 | 23% |
| $16,000-$18,999 | 25% |
| $19,000-$21,999 | 19% |
| $22,000-$29,999 | 16% |
| $30,000-up | 2% |
1983 - 1990 comparison
Secretaries enjoyed a 36.1% increase in salary between 1983 and 1990, according to the U.S. Bureau of Labor statistics. The median average salary for secretaries in 1983 was an estimated $13,000. In 1990, it was almost $18,000. That put the average secretary a few steps ahead of the Consumer Price Index -- which measures the cost of living for a family of four. The CPI rose 31.3 percent in the same period.
1988
Average Salaries (based on member survey results)
| Less than $10,000 | 13% |
| $10,000-$19,999 | 18% |
| $20,000-$39,999 | 36% |
| $40,000-59,999 | 16% |
| $60,000-$74,999 | 5% |
| $75,000-$99,999 | 3% |
| $100,000 or more | 3% |
| Don't know/refused | 7% |
1991
Average Salary Range, by Title
| Administrative Assistant | $24,903-$29,305 |
| Executive Secretary | $24,582-$28,300 |
| Administrative Secretary | $24,267-$31,013 |
| Secretary/Receptionist | $ 8,320-$17,744 |
| Secretary | $19,352-$24,517 |
1995
Fortune Magazine, June 1995, "What Americans Earn"
| Initial Pay | Industry Average | Typical Top Pay | |
| Secretary | $12,480 | $28,189 | $50,000 |
| Receptionist | $13,000 | $22,387 | $28,000 |
| Executive Secretary | $14,000 | $37,485 | $70,000 |
1999
Average salaries
1999 Administrative and Office Support Salaries, United States
| Administrative Assistant | $20,000-$25,500 |
| Senior Administrative Assistant | $23,500-$36,000 |
| Executive Assistant | $26,000-$34,000 |
| Senior Executive Assistant | $32,000-$45,500 |
| Office Manager (up to 5 years exp.) | $25,000-$32,000 |
| Senior Office Manager (5+ years exp.) | $32,500-$43,000 |
| Specialized Medical Secretary | $26,000-$36,000 |
| Desktop Publishing Specialist | $27,000-$38,000 |
According to a 1997 IAAP study, the average salary for IAAP members was $28,420. Just over half (51%) earned over $26,000; thirty-one percent earned over $31,000.
For 3,200 other job-field salaries in the U.S., Click Here
Nonsense.
As you can see from the data (for secretaries, with a link to 3,200 other professions included) in the above post, average incomes have soared from $3,060 in 1950 up past $28,000 by 1995, and they continue to climb today.
Even your own chart shows a .2% **real** inflation-adjusted earnings growth in American wages from 1965 to 2000. That's not the same as being stagnant or falling behind, and that's the worst period on the whole graph!
This ought to give the reader a good view of the political view point of the author. Of course he leaves out that many families have switched from 2 incomes to one and that as with any mature economy, there are going to be times when growth slows especially when the boomer generations kids are waiting 4-5 years later in life to marry, have children and buy homes. This story could have been written by Jayson Blair.
Sarcasm's chart in post #15 shows an average annual increase of .2% for American salaries / wages during the very worst period of its data. That's not falling behind. That's not being stagnant. That's slowly getting better off even during the worst periods of wage rates and inflation.
Nonsense. Your graph showed a .2% average annual increase in real wages.
If you want to show something different, then post a different graph.
For example, the poverty level income is around 14K. However if you factor in various indices and financial realities, including things like the CPI and inflation, it should factor in much higher than that! 14K is a joke. Even, to be honest, in major cities an income of 35K would be a sustainance level.
The poor are getting poorer! Just look at the job situation! Most people look at it based on the unemployment index ......but totally ignore the UNDER-employed index! That is the real killer! People who are workign several strata beneath what they are truly worth .....yet because they are 'employed' they are not taken into consideration in any statistical study.
And by the way statistics can be easily manipulated one way or the other. Anyways..........
The average family has a higher dollar income than a family in the 1950s .....but their PURCHASING POWER (another factor your graphs ignore) is by far lower! Their JOB POTENTIAL has also gone down the drain (there is rampant outsourcing of white-collar jobs to places where the pertinent costs are less), meaning that the competition for good jobs has exploded .....globally! You are not just competing against Joe Blow from Michigan but also against Chinese Cho from Hong Kong, Slim Siam from Singapore, Pritesh Shah from Calcutta, and Simon Assegai from South Africa!
As for the rich they are getting richer. The average CEO earns several hundred % more than the average worker compared to a CEO from a couple of decades ago! And because of their connections they can ensure their offspring get good jobs (even with all the outsourcing certain jobs, the high-octane ones, remain in the US .....and the rich ensure their kids go to the right schools and know the right people so as to increase their chances of being a big-shot. Why do you think there is such competition to get into Baby-Ivies ....essentially elite nursery and kindergarten schools? Jack Grubman for example commited fraud and enhanced the profile of a useless stock just to get a recommendation for his kid to go to an elite preparatory school! Why?)
And the gap between the rich and the poor is getting wider! And as the gulf widens the middle class gets thinned.
And the one of the true wonders of the US (which anyone who has travelled globally can attest to) si that it is one of the few places in the globe that has a TRUE middle-class.
That middle-class may be facing extinction .....protracted yes, but seemingly inevitable!
Not according to the inflation-adjusted graph in post #15.
That graph shows average **real** salaries and wages increasing by .2% per year even in the very worst periods of inflation and wages.
Income distribution will **always** flow to the most productive members of an increasingly affluent society, away from those who contribute the least.That's how capitalism works. Money flows to those who are willing and able to best make money for others.
But that doesn't mean that the poor get "poorer", only that the poorer will steadily get further from the wealth levels of the richest.
Think of it as .1% annual **real** salary increases versus 4% real annual increases. Obviously both groups are getting better, but the difference between the two groups will keep growing.
Thank you for living up to your screen name by verbalizing the ultimate in self-destructive philosophies. Children, who needs children? They are just a personal choice, society doesn't need a next generation. Are you really unable to see any societal value in having a next generation of Americans, or perhaps I am misunderstanding you, and you were being sarcastic?
Virtually every western nation is facing a social security crisis because there are not enough young people to support the retirees. America is about the best off compared to any developed country because of our immigration. Italy, Japan, Germany, France, they're all facing bankruptcy in their retirement programs. Personally I find that the least of the reasons for wanting to produce a next generation of human beings, but for selfish pragmatic reasons alone, it should be clear that society cannot function when everyone wants to live off someone else's children.
By the time you factor in the costs (2nd car, wardrobe, having strangers raise the kids, etc.) of a 2nd income, the 2nd income is pretty much eaten up.
You make a very valid point on this one. Virtually all second jobs produce a negative return for the family, unless the wife is in the tiny percentage of high-paying jobs like doctor or lawyer. In addition to the costs you've already mentioned, don't forget taxes (the second income is taxed at a much higher rate since you've already used up your deductions) and food (2-income families spend enormous amounts of money on prepared food, affecting not only their budget but contributing to the obesity epidemic in America).
America now has 2 million real-wage millionaires today, versus some 50,000 or so back in 1950.
So what you are seeing isn't that the poor are getting poorer, only that the poor are noticing that more and more people are getting rich, and that the rich are getting rich faster and faster.
That's to be expected. The whole system of capitalism gives rewards and incentives for continued new success.
What you are seeing is that an entire generation of economic growth and productivity has benefited only a very small percentage of the population. The average guy has actually gone backwards, especially when you figure in affirmative action and government expenditures. This is not "capitalism" but a Marxian parody of capitalism. And we haven't seen the real bad times yet. If a real depression hits, you'll see pent-up hostility explode like hasn't been seen in the US since the thirties, if ever.
No, the **average** guy has only gotten ahead of inflation by .2% per year in the worst periods of American inflation and wage changes.
That's not going backwards. See the graphs in post #15.
In the United States, for example, wages of less-skilled workers have fallen steeply since the late 1970s relative to those of the more skilled. Between 1979 and 1988 the average wage of a college graduate relative to the average wage of a high school graduate rose by 20 percent and the average weekly earnings of males in their forties to average weekly earnings of males in their twenties rose by 25 percent. This growing inequality reverses a trend of previous decades (by some estimates going back as far as the 1910s) toward greater income equality between the more skilled and the less skilled. At the same time, the average real wage in the United States (that is, the average wage adjusted for inflation) has grown only slowly since the early 1970s and the real wage for unskilled workers has actually fallen. It has been estimated that male high school dropouts have suffered a 20 percent decline in real wages since the early 1970s.
I wonder if there are still companies with "Bring your kid to work " Fridays. I wonder if there are companies still "burning" money or measuring their time to death by watching the burn rate.
The article describes a return to normalcy and a good rather than a bad condition.
You're missing a couple of points:
1. That's income. What about expenses like taxes? These have increases substantially, leaving less disposable income.
2. What about the cost of getting that job? If you need to go into debt to the tune of tens of thousands of dollars befor taking your first job, then what is the net result on total income? What if you could take $100K and invest it in a mutual fund when you were 18 and then add that on to your salary because you didn't waste it buying a certificate of work eligibility from our educational institutions? That would be the equivalent of the situation in 1965.
3. This is the average, not the median. Because we have already noted that the rich got a lot richer, that means that if the average stayed the same, then the median person went backwards. Also we know that disproportionate income was dedicated to women and minorities. That means that the average white guy supporting his family is much much worse off than he was in 1965.
4. Why brag about being stagnant? A growth rate of 0.2% during a time of tremendous economic productivity means that the average worker has not been able to benefit from the computer revolution, as well as all the other benefits of an entire generation of economic growth. This is in stark contrast to prior generations when the average American's standard of living rose enormously.
He has no clue.
All women's liberation into the job market has done is to make everyone earn less.
The same is true as to unlimited immigration. More people, fewer jobs; fewer job applicants, more and higher-paying jobs.
Supply and Demand. Supply and Demand.
No, it doesn't mean that at all, and you haven't even phrased it correctly (the average went up .2% per year in even the very worst selected period in our data - that's NOT staying at the same wage).
2 million rich people can get richer at 4% each year, while 280 million people get richer at .1% each year, but that doesn't mean that the median income went backwards.
What it means is that the median income went up at least .1% each year while the average income went up .2%.
My figures are for inflation-adjusted REAL millionaires. Had you pointed such a thing out, you would have been mocked for not realizing that the data was already adjusted.
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