Thursday, February 26, 2015

Biden: the Middle Class Is Being "Killed"

Recently, Vice President Joe Biden, said that the middle class is getting "killed" and we need constant and reoccurring infrastructure spending to restore it:

He's right about the middle class getting "killed".  Just look at this chart of real (adjusted for inflation) median household incomes:

As you can see, the so-called Great Recession took its toll.  But, it is also true that 6 years of Obama (and Biden) has not done one thing to improve the median income.  This despite a near trillion dollars in "Stimulus" spending and other programs that were supposed to help the middle class.

So, this brings us to the question as to whether or not Biden's (and Obama's) insistence that infrastructure construction spending will strengthen the middle class.

Well, the answer to that question is no.

In order to raise median household income above the $52,000 level (as seen on the above chart), you need to create a lot of jobs that are well above that number.   Unfortunately, that isn't going to happen with infrastructure projects.  The best paid job on any site is the construction supervisor.  The average construction supervisor salary is about $49,000; or, $3000 below $52,000. The next best paid infrastructure jobs are the heavy equipment operators.  Their average pay is around $41,000.  From that point on, it is down hill until you get to the low-paid individual that controls traffic by flipping around a "stop/slow" sign all day long.  Also, understand that infrastructure construction jobs only make up a small percentage of the workforce.  For, example, there are only about 400,000 equipment operators in this country out a of labor force that is made up of 157 million.  That's less than 2-tenths of a percent of the labor force.

The only reason that Biden and Obama are pushing infrastructure spending is to benefit their union voting block because most heavy construction work in this country is unionized.

The kind of jobs that would strengthen the middle class are managers, lab and medical technicians, research scientists, nurses and nurse practitioners, engineers, programmers, and so many more jobs that have nothing to do with infrastructure.  But, these jobs are being hurt by the heavy hand of government regulation under the Obama Administration.  The best proof of that comes from the massive growth in independent contractors and freelancers.  Right now there are 42 million of them, but that number could be more than half of the salaried workforce of 135 million by 2020.

By hiring independent contractors and freelance workers, companies avoid all kinds of federal and state mandates such as the matching FICA payments, minimum wage, paid family leave, salaried overtime pay, and, especially, not having to pay the fine for not providing healthcare.  Instead, the contractor or freelancer must pay for their own health insurance and prepare for their own retirement.  This is what most Democrats don't seem to understand as they keep boxing companies in with increasingly burdensome regulations.


Construction Equipment Operator Quick Facts:

Salary Data: Construction Supervisor:

Browse Average Salary Ranges for Middle Income Level Jobs:

The Shifting American Workforce: Growing Legions of Freelancers and Independent Contractors:

We're all becoming independent contractors:

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