This is scary

[jim king]

Middle class America

The Middle Class in America Is Radically Shrinking. Here Are the Stats to Prove it
Posted Jul 15, 2010 02:25pm EDT by Michael Snyder in Recession
Related: ^DJI, ^GSPC, SPY, MCD, WMT, XRT, DIA
From The Business Insider
Editor's note: Michael Snyder is editor of theeconomiccollapseblog.com
The 22 statistics detailed here prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America.
The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.
So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.
Here are the statistics to prove it:
•    83 percent of all U.S. stocks are in the hands of 1 percent of the people.
•    61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
•    66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
•    36 percent of Americans say that they don't contribute anything to retirement savings.
•    A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
•    24 percent of American workers say that they have postponed their planned retirement age in the past year.
•    Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
•    Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
•    For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
•    In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
•    As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.
•    The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation's wealth.
•    Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
•    In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
•    The top 1 percent of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.
•    In America today, the average time needed to find a job has risen to a record 35.2 weeks.
•    More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.
•    or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
•    This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
•    Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.
•    Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
•    The top 10 percent of Americans now earn around 50 percent of our national income.
Giant Sucking Sound
The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker 10 times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool.
What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are "less attractive" than ever. Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States.
So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay.
What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about six unemployed Americans for every new job opening in the United States, and the number of "chronically unemployed" is absolutely soaring. There simply are not nearly enough jobs for everyone.
Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs.
But you can't raise a family on what you make flipping burgers at McDonald's or on what you bring in from greeting customers down at the local Wal-Mart.
The truth is that the middle class in America is dying -- and once it is gone it will be incredibly difficult to rebuild.

[pigman]

I do not believe all of the above stats. He states that the stats prove that the middle class is radically shrinking, but he does not prove any of the stated stats are true. :-\

[Warbird]

Respectfully, that entire piece reads like a bunch of fear-mongering.  Do you have any cites that backup all of these claims?

[scgargoyle]

I do believe the 'middle income class' is shrinking, although I don't know by how much. There are still a lot of folks out there living in very average houses in very average neighborhoods- the epitome of middle income.

Much of the money problems that people have today have been brought on by themselves. When I was a kid, we were middle income. Mom didn't work, we had one car, and we didn't have all the toys people 'need' today. Now, each person has to have a fancy new car, the kids all have cars, and toys such as boats, snowmobiles, ATV's, and a huge plethora of electronic gadgets that didn't even exist when I was a kid. We had an old black and white TV in the unfinished basement, with rabbit ears and some foil to improve the reception. No one had a cable bill in the old days! Houses, on average, were much smaller, and central A/C was unheard of. Family vacations, if you were lucky enough to go on one, consisted of going to Camp Itchiscratchi for a week in the family station wagon, not taking the kids to Paris for a month. Can you imagine if you limited yourself to the same basic things you had in the 50's? Life would be a lot more affordable. I think 'keeping up with the Joneses' is one of the big factors in the fix we're in today.

My dos centavos: I wish they wouldn't use the term 'middle class' or 'upper class', when what they mean is 'middle income', or 'upper income'. There are certainly some low class people in the upper income brackets!

[jim king]

Respectfully, that entire piece reads like a bunch of fear-mongering.  Do you have any cites that backup all of these claims?

I picked it off Yahoo news this morning.

My dos centavos: I wish they wouldn't use the term 'middle class' or 'upper class', when what they mean is 'middle income', or 'upper income'. There are certainly some low class people in the upper income brackets!

Well said

[SwampDonkey]

About the only thing that has changed around here is vinyl siding and more pavement on farm community roads. Vinyl siding made tar paper shacks look a little nicer.  Pavement keeps the car a little cleaner.  I still get 4 TV stations over the air. ;D

[Magicman]

This guy, Michael Snyder deals in spreading fear and bad news.

http://www.businessinsider.com/author/michael-snyder

[deutz4]

Pigman is right. I've seen politicians do this for years. Throw out an odd sounding stat. The interviewer can't challenge you because he doesn't know the difference and by the time someone comes up with the correct data we are on to the next global crisis. IMHO, NPR has been particularly good at this.

[fuzzybear]

   well  one has to ask themselves a hard question... If I become sick today will my family be able to survive?   I am willing to wager that over half the people you ask that question to will answer with a loud NO!!!   I have asked people for years to take the dang blinders off and look around them.  Homelessness is at an all time high, but it is ignored by everyone.  There are NO statistics on the number of families living on the street, there are NO statistics on the number of children living below poverty.  Why?? Because it is not an important issue to people.  The numbers you find online are guestamets.
   People are loosing everything at an alarming rate. They are forced to sell everything or let the banks take it back. one only has to look at the housing market. The back log of forclosures in North America has reached an all time record.  I am not certain of the exact number but it has risen over 800% in the last 3 years.
   If you loose your job today how long will it be until you find another? be honest with yourself.  If you are in your 40's it will take you longer to replace that job than someone in their 20's.  If you are in your 50's you are in real trouble.
   For those of you with retirement accounts how much have you lost in the last 3 years? My mother-in-law reached her retirement age last year and cannot retire. She lost over $100,000 due to this last (or is it still the current) recession.
   How many of you know of someone who has lost everything recently?  Odds are at least half of us do.
   Something needs to be done. But the sad truth is NO ONE is going to do anything because the problems have gotten so bad no one can. And simple human thought is  "it's not my problem, why should I care?"   but what if it all of a sudden becomes your problem.  There isn't a lot of hope left.
   I am by no means a doom preacher. I prefer the reality of living on this planet....it's a whole lot scarier.

[red oaks lumber]

as sad as it sounds, i think jim's right . if we take off the blinders and really look around it will scare the hell out of us.

[SwampDonkey]

You can predict a little housing boom here very easily as soon as the government announces a hiring boom. You get retirees building and new blood moving in from elsewhere to build. Most want a new house by their own design around here and a lot of other homes will sit on the market. The average Joe can only afford older homes, usually a 50+ year old farm house tax assessed at $50,000. Newer generation farmers are also putting themselves in deep debt, not only from purchasing a farm but having a house with everything and at least 3 pleasure vehicles and the riding mower. My father's generation never had a new house until they retired and sold the farm.  :

[jim king]

In my opinion this is a very interesting topic.  When I was a kid we went to town once a week as to not waste gas.  Milked 24 cows on 120 acres and lived well.  I feel fortunate that I was able to grow up under those conditions and grew up in probably the best time span -the 50´s and early 60´s in the history of the US.

Virtually all the food was grown on the farm, the schools worked well and it was good.  I see great changes in that every one has to have everything and it is just not working out for many families.

The world is in fact changing fast.  If one could only see the future.

Here in The Amazon we have a very difficult time finding anything Made in the USA but China has taken over the country as to imported products and the purchase of the raw materials.  They are now into civel construction and financing and building infrastructure projects also.  Also buying up mines of gold and other minerals which used to be the sector dominated by the Canadians.  American companies are dwindeling fast here.

It is sad to see.  The Chinese are doing this thru out the developing world in a very organized way.  They flood the countries with "legal" immigrants and they all arrive to the help and guidence of the existing Chinese population and in a few weeks they have a store or restaurant using Chinese imported products.

They are hard workers and live a very low visability and for the most part live in the back of thier store or restaurant.  Quite humble in thier ways and business methods  but they are taking over.  How long they can maintain the pace they are on who knows.

[SPIKER]

I work with a Chinese guy, Pengfie is a good person, hard worker very smart and I consider him a friend.   He and his wife & daughter went to Canada first then he got a work visa and is working for same company as I am.   He (like MANY chinese people) is highly educated and highly motivated.   In all a hard working people like US trying to survive & prospher.   He has family in china still and was gone much of june back in china.   His friend whom he graduated a tough collage with are living in china in million dollar condos in Beijing.   They are making 5 times what he is now and living a good life.   SO that is part of the reason you are seeing so much made in china, hard working people who are dedicated to making themselves better.   Part of the reason USA has lost so many jobs were / are the same as china is starting to loose them, others willing to go after the openings and provide services to anyone at a lower rate.   USA people are walliemart shoppers due to lower costs for average to good widgets.   New trends are moving factories to center of china where labor rates are still cheap or cheaper and will help the poor.  the poor in the center of the country will get better at wages and will do less farming.   (One thing USA still excels at is farming and we wont be taken over in that respect.)   Lots of jobs are leaving china for Vietnam Cambodia and India (I also work with a guy from India, KP "Kapieash *(%)($ Patel" his name is very long and has some very interesting heritage behind it) I have learned first hand from these two guys about where they come from and how interesting their homes Countries are.

USA is in a lot of ways later in the life cycle of the industrialization of a nation, China is where USA was in the 60's lots of cultural changes going on government becoming more liberal capitalism is very strong there.  India also is coming along and the people are more separated in their beliefs of country and life.  There will be a similar movement there pretty soon I would imagine.

Anyhow to stay ahead of the game you have to get with it, stop laying around and thinking you are owed something work hard for it and save towards it.   sounds simple but many people dont WANT to do it and others cant.  the problem is finding out which one need the help and which one simply wants someone to hand it to them...

Mark

[Ron Wenrich]

US GDP for 2009 $14.3 trillion.  China GDP for 2009 $5 trillion.  China's population is 3 times that of the US.  Per capita production in the US is 9 times that of the Chinese.  When the Chinese get a 10% rise in their GDP, that equals a 3.5% in the US GDP.

India has a $1.3 trillion GDP.  Their population is about the same as China.

Just some numbers to chew on.

[fishpharmer]

Interesting discussion.

Ron W. do you have any stats on GDP to national debt ratios?

[jim king]

China -CIA Factsheet    just Google (CIA - The World Factbook)

China's economy during the past 30 years has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy. Reforms started in the late 1970s with the phasing out of collectivized agriculture, and expanded to include the gradual liberalization of prices, fiscal decentralization, increased autonomy for state enterprises, the foundation of a diversified banking system, the development of stock markets, the rapid growth of the non-state sector, and the opening to foreign trade and investment. Annual inflows of foreign direct investment rose to nearly $108 billion in 2008. China has generally implemented reforms in a gradualist or piecemeal fashion. In recent years, China has re-invigorated its support for leading state-owned enterprises in sectors it considers important to "economic security," explicitly looking to foster globally competitive national champions. After keeping its currency tightly linked to the US dollar for years, China in July 2005 revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies. Cumulative appreciation of the renminbi against the US dollar since the end of the dollar peg was more than 20% by late 2008, but the exchange rate has remained virtually pegged since the onset of the global financial crisis. The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2009 stood as the second-largest economy in the world after the US, although in per capita terms the country is still lower middle-income. The Chinese government faces numerous economic development challenges, including: (a) reducing its high domestic savings rate and correspondingly low domestic demand through increased corporate transfers and a strengthened social safety net; (b) sustaining adequate job growth for tens of millions of migrants and new entrants to the work force; (c) reducing corruption and other economic crimes; and (d) containing environmental damage and social strife related to the economy's rapid transformation. Economic development has been more rapid in coastal provinces than in the interior, and approximately 200 million rural laborers and their dependents have relocated to urban areas to find work. One demographic consequence of the "one child" policy is that China is now one of the most rapidly aging countries in the world. Deterioration in the environment - notably air pollution, soil erosion, and the steady fall of the water table, especially in the north - is another long-term problem. China continues to lose arable land because of erosion and economic development. In 2006, China announced that by 2010 it would decrease energy intensity 20% from 2005 levels. In 2009, China announced that by 2020 it would reduce carbon intensity 40% from 2005 levels. The Chinese government seeks to add energy production capacity from sources other than coal and oil, and is focusing on nuclear and other alternative energy development. In 2009, the global economic downturn reduced foreign demand for Chinese exports for the first time in many years. The government vowed to continue reforming the economy and emphasized the need to increase domestic consumption in order to make China less dependent on foreign exports for GDP growth in the future.

GDP (purchasing power parity):    
$8.789 trillion (2009 est.)
country comparison to the world: 3
$8.086 trillion (2008 est.)
$7.418 trillion (2007 est.)
note: data are in 2009 US dollars

GDP (official exchange rate):    
$4.814 trillion (2009 est.)

GDP - real growth rate:    
8.7% (2009 est.)
country comparison to the world: 4
9% (2008 est.)
13% (2007 est.)

GDP - per capita (PPP):    
$6,600 (2009 est.)
country comparison to the world: 128
$6,100 (2008 est.)
$5,700 (2007 est.)
note: data are in 2009 US dollars

GDP - composition by sector:    
agriculture: 10.6%
industry: 46.8%
services: 42.6% (2009 est.)

Labor force:    
813.5 million (2009 est.)
country comparison to the world: 1  

Labor force - by occupation:    
agriculture: 39.5%
industry: 27.2%
services: 33.2% (2008 est.)

Unemployment rate:    
4.3% (September 2009 est.)
country comparison to the world: 39
4.2% (December 2008 est.)
note: official data for urban areas only; including migrants may boost total unemployment to 9%; substantial unemployment and underemployment in rural areas

Population below poverty line:    
2.8% (2007)

Household income or consumption by percentage share:    
lowest 10%: 3.5%
highest 10%: 15%
note: data are for urban households only (2008)

Distribution of family income - Gini index:    
41.5 (2007)
country comparison to the world: 54
40 (2001)

Investment (gross fixed):    
45.2% of GDP (2009 est.)
country comparison to the world: 3  

Budget:    
revenues: $1.002 trillion
expenditures: $1.111 trillion (2009 est.)

Public debt:    
16.9% of GDP (2009 est.)
country comparison to the world: 109
15.6% of GDP (2008 est.)

Inflation rate (consumer prices):    
-0.7% (2009 est.)
country comparison to the world: 14
6% (2008 est.)

Central bank discount rate:    
2.79% (31 December 2008)
country comparison to the world: 125
3.33% (31 December 2007)

Commercial bank prime lending rate:    
5.31% (31 December 2008)
country comparison to the world: 142
5.58% (17 December 2007)

Stock of money:    
$2.434 trillion (31 December 2008)
country comparison to the world: 3
$2.09 trillion (31 December 2007)

Stock of quasi money:    
$4.523 trillion (31 December 2008)
country comparison to the world: 4
$3.437 trillion (31 December 2007)

Stock of domestic credit:    
$5.555 trillion (31 December 2008)
country comparison to the world: 4
$4.653 trillion (31 December 2007)

Market value of publicly traded shares:    
$5.011 trillion (31 December 2009 est.)
country comparison to the world: 4
$2.794 trillion (31 December 2008)
$6.226 trillion (31 December 2007 est.)

Agriculture - products:    
rice, wheat, potatoes, corn, peanuts, tea, millet, barley, apples, cotton, oilseed; pork; fish

Industries:    
mining and ore processing, iron, steel, aluminum, and other metals, coal; machine building; armaments; textiles and apparel; petroleum; cement; chemicals; fertilizers; consumer products, including footwear, toys, and electronics; food processing; transportation equipment, including automobiles, rail cars and locomotives, ships, and aircraft; telecommunications equipment, commercial space launch vehicles, satellites

Industrial production growth rate:    
9.5% (2009 est.)
country comparison to the world: 5  

Electricity - production:    
3.451 trillion kWh (2008 est.)
country comparison to the world: 2  

Electricity - consumption:    
3.438 trillion kWh (2008 est.)
country comparison to the world: 2  

Electricity - exports:    
16.64 billion kWh (2008)

Electricity - imports:    
3.842 billion kWh (2008)

Oil - production:    
3.79 million bbl/day (2008)
country comparison to the world: 4  

Oil - consumption:    
7.999 million bbl/day (2008)
country comparison to the world: 3  

Oil - exports:    
388,000 bbl/day (2008 est.)
country comparison to the world: 32  

Oil - imports:    
4.393 million bbl/day (2008)
country comparison to the world: 4  

Oil - proved reserves:    
15.7 billion bbl (1 January 2009 est.)
country comparison to the world: 14  

Natural gas - production:    
76.1 billion cu m (2008)
country comparison to the world: 11  

Natural gas - consumption:    
80.7 billion cu m (2008)
country comparison to the world: 10  

Natural gas - exports:    
3.34 billion cu m (2008)
country comparison to the world: 30  

Natural gas - imports:    
4.44 billion cu m (2008)
country comparison to the world: 34  

Natural gas - proved reserves:    
2.46 trillion cu m (1 January 2009 est.)
country comparison to the world: 13  

Current account balance:    
$297.1 billion (2009 est.)
country comparison to the world: 1
$426.1 billion (2008 est.)

Exports:    
$1.204 trillion (2009 est.)
country comparison to the world: 2
$1.435 trillion (2008 est.)

Exports - commodities:    
electrical and other machinery, including data processing equipment, apparel, textiles, iron and steel, optical and medical equipment

Exports - partners:    
US 17.7%, Hong Kong 13.3%, Japan 8.1%, South Korea 5.2%, Germany 4.1% (2008)

Imports:    
$954.3 billion (2009 est.)
country comparison to the world: 4
$1.074 trillion (2008 est.)

Imports - commodities:    
electrical and other machinery, oil and mineral fuels, optical and medical equipment, metal ores, plastics, organic chemicals

Imports - partners:    
Japan 13.3%, South Korea 9.9%, Taiwan 9.2%, US 7.2%, Germany 4.9% (2008)

Reserves of foreign exchange and gold:    
$2.422 trillion (31 December 2009 est.)
country comparison to the world: 1
$1.953 trillion (31 December 2008 est.)

Debt - external:    
$347.1 billion (31 December 2009 est.)
country comparison to the world: 22
$400.6 billion (31 December 2008 est.)

Stock of direct foreign investment - at home:    
$456.3 billion (31 December 2009 est.)
country comparison to the world: 10
$378.1 billion (2007 est.)

Stock of direct foreign investment - abroad:    
$191.8 billion (31 December 2009 est.)
country comparison to the world: 18
$147.9 billion (31 December 2008 est.)

Exchange rates:    
Renminbi yuan (RMB) per US dollar - 6.8249 (2009), 6.9385 (2008), 7.61 (2007), 7.97 (2006), 8.1943 (2005)

[Kansas]

Excellent article, but one piece of information doesn't go far enough. Yes, they decoupled in 2005 the value of the yen to the dollar. Officially. In July 2008, pegged it against the dollar again. Unofficially. They did that because at the time the dollar was declining. Now they are making noise to use a currency basket again for valuing it. I highly suspect it is because the European Union is such a strong trading partner. When the Euro currency collapses, they want to hedge their bet. When the Euro does that, the dollar will go high, and make it difficult for them to sell to Europe.

[jim king]

Kansas:

I do not have any idea how they do what they do.  The tropical wood flooring blanks leave here for an average of $1.65 a bf.  It then goes up the Amazon 8 days to the nearest road going to the Pacific up over the mountains, another 24 hour trip and then they pay all the port charges the river port and in Lima and ship the wood to China.

Sounds good until now, but then you look on any of the internet sites selling Chinese tropical flooring that the raw material is from here and the retailers in the States are selling it at the same price or less than it leaves here. 

There is a currency game of some kind that I simpley do not understand.

[SwampDonkey]

I think it's in the shipping. Take here for example in NB, if I was to buy a car that was assembled here in NB within 10 miles of home, I would still have to pay freight and other add-ons as if it came 100's of miles from Toronto. The further you are from the central point of business the higher your shipping, no matter if it's made next door.

When I lived in Northern BC, it cost $800 to fly 500 miles the Vancouver and $300 from there to the opposite coast. :

[scgargoyle]

I do know that China subsidizes their companies to make them so competitive that everyone else gives up. I work for a company that molds plastic products. We can buy finished goods (retail) from China cheaper than we can buy the plastic resin for to make them in-house! We could actually go to Wal-Mart and buy plastic goods and re-grind them for the material cheaper than buying the material to begin with. Where are they getting their cheap raw materials from? Plastics are made from petroleum. Either the Middle East is giving them a better deal on petroleum (entirely possible), or their government is paying the difference. Either way, if they can keep it up much longer, they won't have any competition, and then they can charge whatever they want. Now THAT is scary!

[Ron Wenrich]

China has one vast problem.  Nearly everything they sell has to be shipped to a market with consumers.  With a GDP of $5 trillion, there really isn't a whole lot to go around.  Their closest markets are Japan and South Korea.  Russia is by rails, as is Europe.  US is by boat.

But, the folks with the biggest consumer markets are the US, Canada, and the EU.  Their expansion can go only so far, and is dependent upon the willingness of our consumers to buy their goods.  That would also depend on their quality, which is very low on some goods.  If our markets tank, they're pretty well sunk.

GDP to debt ratio by country.  The US is #47 on the list @ 52.9%.  China is #109 @ 16.9%.  World debt is @ 39%.  CIA records that use government borrowing/GDP. 

If you start looking at stats and how the US stacks up, we're not in that bad of shape.

[SPIKER]

I do know that China subsidizes their companies to make them so competitive that everyone else gives up..  ...Where are they getting their cheap raw materials from? Plastics are made from petroleum

we have a large amount of added taxes to the costs that may or maynot be there if the costs are less there are other factors as well such as the Gov help...
just nthink how much the USA GOV helps the businesses here. : : :D
mark

[Kansas]

Kansas:

I do not have any idea how they do what they do.  The tropical wood flooring blanks leave here for an average of $1.65 a bf.  It then goes up the Amazon 8 days to the nearest road going to the Pacific up over the mountains, another 24 hour trip and then they pay all the port charges the river port and in Lima and ship the wood to China.

Sounds good until now, but then you look on any of the internet sites selling Chinese tropical flooring that the raw material is from here and the retailers in the States are selling it at the same price or less than it leaves here.  

There is a currency game of some kind that I simpley do not understand.

Jim
Don't know that there could be a currency game. I would be curious which wood flooring it is.
Is there any chance they are resawing it and veneering it onto something a lot cheaper?

[Kansas]

Well that didn't work. What I was wanting to ask is all of this in the same dollars. The other question is, any chance they are resawing or veneering and putting that on a cheap board or product? Even if the market is subsidized something doesn't seem right.

[jim king]

Kansas:

Yes the figures are all US dollars.  Yes they do laminated flooring also for the same price and sometimes lower.

This is why the US and China are always at odds over the undervalued Chinese currency but I have no no idea how that game works.

[SwampDonkey]

Just check out the "International Monetary Fund" website. ;D

[Kansas]

If the buying and selling of the same wood is at the same price, all priced in US dollars, then there is no currency manipulation. The renmimbi is pegged to the dollar. You would have to have wildly fluctuating currencies. And where they move in tandem, that won't work. I can't think of a single trick that would change that. Maybe someone knows one I don't know of.
That leaves two possiblities. One- they are resawing the lumber and then using that surfaced against some cheaper wood or product. The second, is that the government is subsidizing the industry. I suppose that's possible. They have been known to do that. For some reason, I doubt that, but I dunno.

[ihookem]

  Yes, middle income class is shrinking, mostly because if China. Scgargoyle grew up like me and if we go back to our lifestyle when we were kids we would be better off. Honestly, we seemed happier then anyway. We want it cheap! China is the answer! They make junk though. By the sound of it, they have more problems than I thought. They can hardly feed themselves without having rural farmers heading to the city. Erosion is up and water table is down. I found myself saying to myself the other day when thinking about the world economic collapse. We have land and a lot of it, and it's good land! If Americans can keep our land we will most likely fair ok. We can't sell our land to foreigners. We can work and make more money than China. We just have to lower our wages enough to compete to some degree and be content with the simple life style we had 40 years ago.It was a good life then, maybe better cause it was simple. Hebrews 13 v 5  " Keep your lives free from the love of money and be content with what we have, because God said never will I leave you or forsake you ". I guess I want more too but need to be reminded sometime. We still have plenty.

[Ron Wenrich]

40 years ago the chant was about the Japanese and how everything you bought was made in Japan and that it was junk.  Different time and a different country to complain about.  We can't go back 40 years. 

China and those other countries making lower quality products with a cheaper labor force are taking jobs away that can't support a middle class lifestyle.  Back in the '50s, the US had the only manufacturing base that wasn't bombed out during WWII.  That gave us a manufacturing advantage until those other countries came on board and started taking low end jobs.  Eventually they got into higher end products like electronics and cars.

But, our future and our middle class isn't in our past.  If we brought back all those knitting mills, shoe factories, toy factories and other of the lower end manufacturing base, we would end up having to have immigrants as our labor source.  We can't support a middle class with that sort of manufacturing.

You need to have higher end products.  You need a well trained work force, which means that the education system needs to improve.  You need to start looking at some of those green jobs that can help in a lot of different ways.  Look at the profits from the iPhone and other innovative products. 

Lowering our wages just to get more jobs just leads to poverty and a wider gap between the rich and poor.   

As for the flooring, when looking around the net, the cheapest I found was $2.69/sq ft.  It was 1/2" think.  For the heavier stuff, it was all up in the $4-5 range for an average price.  We're getting 34-50 ¢ for our flooring stock.  I think we should be able to compete.

[fishpharmer]

Ron, where is the iPhone manufactured?

And why?

[jim king]

As for the flooring, when looking around the net, the cheapest I found was $2.69/sq ft.  It was 1/2" think.  For the heavier stuff, it was all up in the $4-5 range for an average price.  We're getting 34-50 ¢ for our flooring stock.  I think we should be able to compete.

Ron:  You are looking a retail prices , not what the Chinese sell it for.

china walnut flooring  FOB Price: US $22-25 per sq meter
china walnut flooring   $2.09 to $2.38 per sf
18mm x 92mm/122mm x RL
T&G micro beveled
prefinished with 9 coats of lacquer with aluminum oxide

engineered flooring, Flooring market, china flooring
1. Size: RL*123*14/3mm
2.Engineered flooring
3.handscrapped Feature...
Min. Order: 1300 Square MetersFOB Price: US $12-26 per sq meter
$0.95 to $2.47 a square foot

They have several web site marketing operations, one is "Alibaba"  there you can find the wholesale price of about anything they make.

[Ron Wenrich]

Ron, where is the iPhone manufactured?

And why?

I didn't say anything about the manufacturing.  I said about the profits.  Its a US product, and we're the ones reaping the profits.  You profit from the innovation. 

[ihookem]

Ron, to some degree you are right about having to import imagrants to help, but we wouldn't if we would get rid of the extra white collar workers and make the prisoners work. We have 2 million prisoners doing nothing. I think they should be in the bean fields all day. Then they would think twice before commiting a crime.

[SPIKER]

Ron, where is the iPhone manufactured?

And why?

Made by the biggest electronics manufacture in china (forget the name was 3 or 4 weeks back they were in headlines.)  It was the one that has been in the news for workers killing themselves at work.   I forget what the facts were but something like average wage was / is ~160.00/month working 10/12 hr shifts 6 days.   They went on strike and the company gave them what amounted to a wage increase of somewhere about 20/month more.

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