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American “Servants” Make Less Now Than They Did in 1910 | Zero Hedge

American “Servants” Make Less Now Than They Did in 1910 | Zero Hedge.

While much has been said about the benefits of Bernanke’s wealth effect to the asset-owning “10%”, just as much has been said about the ever deteriorating plight of the remaining debt-owning 90%, who are forced to resort to labor to provide for their families, and more specifically how their living condition has deteriorated over not only the past five years, since the start of the Fed’s great experiment, but over the past several decades as well. However, in the case of America’s “servant” class, Al Jazeera finds that their plight is now worse than it has been at any time over the past centurygoing back all the way to 1910!

According to Al Jazeera, “at least one class of American workers is having a much harder time today than a decade ago, than during the Great Depression and than a century ago: servants.  The reason for this, surprisingly enough, is outsourcing. Let me explain. Prosperous American families have adopted the same approach to wages for servants as big successful companies, hiring freelance outside contractors for all sorts of functions from child care and handyman chores to gardening and cleaning work to reduce costs. Instead of the live-in servants, who were common in the prosperous households of America before World War II, better off families now outsource the family cook, maid and nanny. It is part of a global problem in developed countries that is getting more attention worldwide than in the U.S.”

The reality is that the modern servant is also known as the minimum-wage burger flipper, whose recent weeks have been spent in valiant, if very much futile, strikes in an attempt to increase the minimum wage their are paid. Futile, because recall that in its first “national hiring day” McDonalds hired 62,000 workers…. and turned down 938,000! Such is the sad reality of the unskilled modern day worker at the bottom the labor pyramid.

Unfortunately, we anticipate many more strikes in the future of America’s disenfranchised poorest, especially once they realize that their conditions are worse even than compared to live in servants from the turn of the century.

Al Jazeera crunches the numbers:

Consider the family cook. Many family cooks now work at family restaurants and fast food joints. This means that instead of having to meet a weekly payroll, families can hire a cook only as needed.

 

A household cook typically earned $10 a week in 1910, century-old books on the etiquette of hiring servants show. That is $235 per week in today’s money, while the federal minimum wage for 40 hours now comes to $290 a week.

 

At first blush that looks like a real raise of $55 a week, or nearly a 25-percent increase in pay. But in fact, the 2013 minimum wage cook is much worse off than the 1910 cook. Here’s why:

  • The 1910 cook earned tax-free pay, while 2013 cook pays 7.65 percent of his income in Social Security taxes as well as income taxes on more than a third of his pay, assuming full-time work every week of the year. For a single person, that’s about $29 of that $55 raise deducted for taxes.
  • Unless he can walk to work, today’s outsourced family cook must cover commuting costs. A monthly transit pass costs $75 in Los Angeles, $95 in Atlanta and $122 in New York City, so bus fare alone runs $17 to $25 a week, eating up a third to almost half of the seeming increase in pay, making the apparent raise pretty much vanish.
  • The 1910 cook got room and board, while the 2013 cook must provide his own living space and food.

More than half of fast food workers are on some form of welfare, labor economists at the University of California, Berkeley and the University of Illinois reported in October after analyzing government economic statistics.

 

Data on domestic workers is scant because Congress excludes them from both regular data gathering by the Bureau of Labor Statistics and laws giving workers rights to rest periods and collective bargaining.

 

Nevertheless, what we do know is troubling. These days 60 percent of domestic workers spend half of their income just on housing and a fifth run out of food some time each month.

 

A German study found that in New York City domestic workers pay ranges broadly, from an illegal $1.43 to $40 an hour, with a quarter of workers earning less than the legal minimum wage. The U.S. median pay for domestic servants was estimated at $10 an hour.

The conclusion?

We are falling backwards in America, back to the Gilded Age conditions a century and more ago when a few fortunate souls grew fabulously rich while a quarter of families had to take in paying boarders to make ends meet. Only back then, elites gave their servants a better deal.

 

Thorstein Veblen, in his classic 1899 book “The Theory of the Leisure Class,” observed that “the need of vicarious leisure, or conspicuous consumption of service, is a dominant incentive to the keeping of servants.” Nowadays, servants are just as important to elites, except that they are conspicuous in their competition to avoid paying servants decent wages.

But… but… how is that possible if the stock market is at all time highs and the wealth is US households just rose by $1.9 trillion in one short quarter. Oh wait, what they meant is “some” households.

And, of course if all else fails, America’s “free” servants, stuck in miserable lives working minimum wage jobs for corporations where the only focus in on shareholder returns and cutting overhead, can volunteer to return to a state of “semi-slavery” (while keeping the iPhones and apps of course, both paid on credit) and become live-in servants for America’s financial oligarchy and the like. We hear the numerous apartments of Wall Street’s CEOs have quite spacious servants’ quarters.

 

No inflation to see here….

No inflation to see here…..

One of the biggest lies in finance is this perpetual deception that inflation is good.

Ben Bernanke, the current high priest of US monetary policy, recently remarked that it’s “important to prevent US inflation from falling too low.”

Well of course, we wouldn’t want that, would we? Just imagine the chaos and devastation that would ensue if the cost of living actually remained… you know… the same.

One shudders at the mere thought of price stability.

Of course I jest. Fact is, inflation benefits those who are in debt up to their eyeballs at the expense of people who have been financially responsible.

Yet economists have somehow managed to convince people that inflation is just and necessary.  We all know inflation exists. But we’ve been programmed to shrug it off as if it’s a natural part of the system.

The even greater deceit is how they report the figures.

Governments all over the world lie about inflation; they do this because inflation has such a huge impact in monetary policy.

The playbook they all use is very simple– as long as inflation is ‘low’, then central bankers can print money. So they have a big incentive to underreport it.

Quoting a report from the US Department of Labor, for example, a recent headline from Reuters stated “U.S. consumer prices rise, but underlying inflation benign”.

I’m not entirely sure how inflation can be ‘benign’ while consumer prices are simultaneously rising.

Yet this is the modern day doublethink coming from the Ministry of Truth that we are all expected to unquestioningly believe.

Inflation does exist. I’ve seen it all over the world as I travel. In India right now, the reported inflation figure just hit 10% at a time when the economy is sagging.

In Bangladesh, workers are now rioting over rising cost of living, which far exceeds the proposed wage hikes that are on the table.

In the Land of the Free, the average price of a movie ticket is $8.38 earlier this year, another record high. Walnut farmers in California are now reaping record high prices on their crop.

And of course, McDonald’s is now killing their once popular dollar menu as they can no longer afford to sell anything at that price.

There are examples everywhere. And this also goes for asset price inflation.

We can see many stock and bond markets near their all-time highs. But then there are other asset classes… like farmland in Illinois, which is now selling for $13,600 per acre.

With an average yield of 160 bushels per acre, the net financial return after paying variable costs is less than 2%. It just doesn’t make any sense.

And in the art world, a Francis Bacon triptych just sold for a record $142 million at Christie’s in New York.

Everywhere you look, there’s overwhelming evidence of bubbles and price hikes. It’s simple. There’s too much money in the system.

Not only is this destructive, it’s the height of deceit to tell people that there’s no inflation.

 

The Biggest Threat To Minimum Wage Restaurant Workers Everywhere? | Zero Hedge

The Biggest Threat To Minimum Wage Restaurant Workers Everywhere? | Zero Hedge.

Over the past year, unionized restaurant workers across numerous fast-food chains but mostly at McDonalds, expressed their dissatisfaction with compensation levels by striking at increasingly more frequent intervals – a sentiment that has been facilitated by the president himself and his ever more frequent appeals for a raise in the minimum wage. Unfortunately, as we have pointed out previously, in the context of corporations that have given up on growing the top line (as virtually all free cash goes into stock buybacks and dividends and none into growth capex), and in pursuit of a rising bottom line, employee wages are the one variable cost that corporations will touch last of all. But what’s worse, these same unionized employees have zero negotiating leverage.

Perhaps nowhere is this more visible than in the recent strategy of smoothie retailer Jamba Juice, which in order to battle a 4% drop in Q3 same store sales has decided to radically transform its entire retailing strategy by getting rid of labor, cheap, part-time or otherwise, altogether. Presenting the biggest threat to minimum-wage restaurant workers everywhere: the JambaGo self-serve machine that just made the vast majority of Jamba’s employees obsolete. Coming soon to a fast-food retailer near you.

Why did Jamba just make its retail sales force obsolete? Part of the problem is heightened competition: McDonald’s has entered the smoothie market, and others like Dairy Queen and Panera spent the summer promoting their rival drinks. Which means even less top-line growth potential. It also means that in order to push more of the top line straight to earnings, and bypass variable costs, a problem that will be faced by increasingly more corporations, Jamba’s corner office had no choice but to unleash JambaGo.

Bloomberg reports:

The smoothie chain is hoping to see improvement from something it calls “JambaGo,” a self-serve machine that can be installed in cafeterias, schools, and convenience stores. Jamba Juice makes money by selling the prepackaged, pre-blended smoothie ingredients to JambaGo vendors, like a soda maker selling syrup to the owner of a soda fountain. The advantages: Jamba doesn’t need to build a store and the labor costs are much lower compared with hiring staff to concoct made-to-order drinks.

 

The company expects this model to help expand its brand more quickly and cheaply. Last quarter, however, revenue from the JambaGo program amounted to just about $400,000. But having recently landed a deal with Target (TGT) to put JambaGo machines in 1,000 Target Cafés, the company will soon have installed more than 1,800 machines (up from only 404 at the start of 2013). By contrast, there are currently about 850 Jamba Juice stores.

 

Based on a goal of $2,000 in annual revenue per JambaGo, the rough math for 1,800 machines is $3.6 million—a decent boost for a company that took in $228.8 million in revenue last year. Another 1,000 are planned for 2014, which would bring in another $2 million in annual revenue.

Here’s what happens next: Jamba will do what every other company does to demonstrate that its radical strategy is successful – fudge the numbers and beat EPS for several quarters. This will happen even if JambaGo is ultimately yet another loss leader. However, its peers will watch closely and soon decide to roll out their own version of just this: a self-contained dispenser of a la carte prepared fast-food food, either liquid or solid, and in the process let go tens of thousands of their own minimum-wage employees, also known to shareholders as “costs.”

What happens after that should be clear to everyone: more unemployment, lower wages for the remaining employees, worse worker morale, but even higher profits to holders of capital. And so on. Because in a world in which technology makes the unqualified worker utterely irrelevant, this is what is known as “progress.”

 

Don’t Worry – The Government Says That The Inflation You See Is Just Your Imagination

Don’t Worry – The Government Says That The Inflation You See Is Just Your Imagination. (source)

If you believe that there is high inflation in the United States, you are just imagining things.  That is the message that the U.S. government and the Federal Reserve would have us to believe.  You might have noticed that the government announced on Wednesday that the cost of living increase for Social Security beneficiaries will only be 1.5 percent next year.  This is one of the smallest cost of living increases that we have ever seen.  The federal government is able to get away with this because the official numbers say that there is hardly any inflation in the U.S. right now.  Of course anyone that shops for groceries or that pays bills regularly knows what a load of nonsense the official inflation rate is.  The U.S. government has changed the way that inflation is calculated numerous times since 1978, and each time it has been changed the goal has been to make inflation appear to be even lower.  According to John Williams of shadowstats.com, if the inflation rate was still calculated the same way that it was back when Jimmy Carter was president, the official rate of inflation would be somewhere between 8 and 10 percent today.  But if the mainstream news actually reported such a number, everyone would be screaming and yelling about getting inflation under control.  Instead, the super low number that gets put out to the public makes it look like the Federal Reserve has plenty of room to do even more reckless money printing.  It is a giant scam, but most Americans are falling for it.

Meanwhile, the prices of the things that most Americans buy on a regular basis just keep going up.  The following are just a few examples of price inflation that we have seen lately…

-McDonald’s has killed the dollar menu because it is becoming impossible to “make any money selling burgers for $1“.

But don’t worry – the government says that the inflation you see is just your imagination.

-Amazon.com has raised the minimum order size required for free shipping from $25 to $35.

But don’t worry – you can afford to order more stuff thanks to the great new job that you got during this “economic recovery”.

-It is being projected that those using natural gas to heat their homes will see their heating costs rise by 13 percent this winter.

But don’t worry – “global warming” should kick in to high gear any day now.

-The price of chocolate has gone up by 45 percent since 2007, and it is being projected that it will now be increasing at an even faster pace.

But don’t worry – eating chocolate is bad for you anyway.

-Thanks to Obamacare, the health insurance premiums of many American families are absolutely skyrocketing.  As I wrote about the other day, one family down in Texas just got a letter informing them that their health insurance premiums are going up by 539 percent.

But don’t worry – this is just “health care reform” in action.

Meanwhile, things just continue to get tougher for middle class American families.  Household incomes have actually been declining for five years in a row and total consumer credit has risen by a whopping22 percent over the past three years.

The quality of our jobs continues to go down and our paychecks are not keeping up with inflation.  In fact, 40 percent of all U.S. workers are now making less than what a full-time minimum wage worker made back in 1968 after you account for inflation.

So what do the “authorities” say that the solution to our problems is?

They want even more inflation of course.  According to CNBC, many Federal Reserve officials (including Janet Yellen) believe that what the U.S. economy really needs is a lot more inflation…

Inflation is widely reviled as a kind of tax on modern life, but as Federal Reserve policy makers prepare to meet this week, there is growing concern inside and outside the Fed that inflation is not rising fast enough.

Some economists say more inflation is just what the American economy needs to escape from a half-decade of sluggish growth and high unemployment.

The Fed has worked for decades to suppress inflation, but economists, including Janet Yellen, President Obama’s nominee to lead the Fed starting next year, have long argued that a little inflation is particularly valuable when the economy is weak. Rising prices help companies increase profits; rising wages help borrowers repay debts. Inflation also encourages people and businesses to borrow money and spend it more quickly.

The rest of that article goes on and on about how wonderful inflation is for an economy and about how the U.S. economy desperately needs some more of it.

Well, if that was actually true, then the Weimar Republic should have had one of the best economies in the history of mankind.

But this inevitably happens when a nation starts producing fiat currency that is backed by absolutely nothing.  There is always a temptation to just print a little bit more.

In the end, we are going to be destroyed by our own foolishness.  We have the de facto reserve currency of the planet, and the rest of the world has trusted it for decades.  But now we are systematically destroying our currency, and the rest of the globe is looking on in horror.

If you want to see a very good example of the impact that inflation has had on our economy in recent years, just check out this amazing chartwhich shows what the Federal Reserve’s reckless policies have done to the prices of commodities.

Ultimately, the U.S. dollar will be destroyed, and we will have done it to ourselves.

Many people are attempting to protect themselves against this inevitability by putting a lot of their money into hard assets such as gold and silver, but before you do that you might want to make sure that you don’t have a vengeful spouse that will toss it all into a dumpster someday.  The following is from a recent New York Post article

A Colorado man was so angry at his ex-wife for divorcing him that he had the couple’s life savings of $500,000 converted to gold — then tossed it in a dumpster so she couldn’t have any of it, the Colorado Springs Gazette reports.

In June, Earl Ray Jones, 52, of Divide, Colorado, was ordered by a judge to pay $3,000 a month to the woman he’d been married to for 25 years, so he pillaged the couple’s retirement account and had it converted into 22 pounds worth of gold and silver bars,  the paper reports.

Jones claims he then tossed the modern-day treasure into a dumpster behind a motel, where he had been living temporarily, later telling the judge he had no money to give his ex-wife, according to the paper.

Did that story make you smile?  It sure did the trick for me.

But that story is also a picture of what the Federal Reserve is doing with our dollar.

Our currency has been used for decades by almost everyone else around the planet.  In fact, more U.S. dollars are used outside of our country than inside of it.

But now the Federal Reserve is systematically trashing the dollar and the rest of the globe is starting to lose faith in it.

Instead of realizing their mistakes, Fed officials say that we need to create even more inflation and they just keep on wildly printing more money.

In the end, we will all pay a great price for their foolishness.

 

McDonald’s ties nine out of 10 workers to zero-hours contracts | Business | The Guardian

McDonald’s ties nine out of 10 workers to zero-hours contracts | Business | The Guardian.

 

Zero-hours contracts cover more than 1m UK workers | UK news | The Guardian

Zero-hours contracts cover more than 1m UK workers | UK news | The Guardian.

 

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