4 More Pieces of Evidence the Underclass is Growing
Last month we were on Yahoo TechTicker discussing 5 Pieces of Evidence the US is Developing a Strong Underclass. We think the Two-Class America Theme is a major trend, and here are a few recent updates to the evidence:
4. Private Unemployment is Stagnant
Last Friday’s BLS unemployment data caused a selloff for good reason: private payrolls remained stagnant (as Uncle Sam picked up the slack). Nonfarm payrolls were up an extraordinary 431,000. However, 411,000 of those jobs were in the public sector and mostly temporary. If the private sector doesn’t start hiring soon, the economy may not allow the under class to climb back to the middle.
3. Long Term Unemployment is Getting Scary
46% of unemployed persons have been without a job for more than six months. This is the highest percentage on record dating back to 1948. Long term unemployment can become a negative feedback loop because worker skills wane, confidence erodes, and contacts in the workforce may disappear.
2. Food Stamps Continue to Set All-Time Highs
As we noted last month, the ability to purchase food is a major sign of whether an underclass is growing. Unfortunately, food stamp benefits continue to set all-time highs.
1. U.S. Bankruptcies Near Five-Year Highs
Greece and Hungary are not the only ones facing insolvency. The pace of U.S. bankruptcies in May reached the second-highest daily level since 2005. In total, 133,459 bankruptcy petitions were filed — a 10% rise year-over-year. So long as bankruptcies increase, the underclass will grow in direct proportion.
Do you see any additional signs of a growing underclass? Let us know in the comments below …