The Shrinking Middle Class? What To Do.
John Hope Bryant
Founder, Chairman and CEO at Operation HOPE, Bryant Group Ventures. Founder, former Chairman, and Principal Shareholder, The Promise Homes Company.
According to PEW research, in 1971, the Middle Class was 61% of the U.S. population. Today, the Middle Class is estimated to be at 49.9%, or less than 50% of the American population for the first time in my lifetime.
This is not only not good news for America, I suggest that it is also one of the primary reasons driving the following trends:
- Strange and growing support for a fear-based voice in the American Presidential election cycle today. A voice that is feeding on fear, financial insecurity and a sense that 'aspiration is no longer working for them.' And while this fear is in some parts true, the voice has resonance because hope is actually dying.
- Increased radicalism of everyday young Americans, unable to find a place of aspiration in America as their parents did.
- Increased volatility (and lost hope) of and in urban America, and the quality of life for those who 'aspire' for a better life.
Powerful statistics and trend lines like this, are but one of the reasons why I have focused so much of my attention and energy on advancing Operation HOPE's Project 5117. Project 5117 focuses on the following:
- Increasing young entrepreneurs and small business owners. As has been repeatedly reported by our partner Gallup, and underscored through our Gallup-HOPE Index, most all jobs come from start ups, small businesses and entrepreneurs, in years three through years seven.
- To quote my friend Van Jones, founder of Dream Corps, "the best way to stop a bullet, is a job." I agree with Van completely here.
- We call this empowerment work our HOPE Business In A Box Academies.
- Increasing youth internship, or Internship America again! We do this by linking classrooms to corporate offices, lunch boxes to briefcases, and education to opportunity. Most kids from underserved neighborhoods don't know someone with a business card, nor earns a salary. They don't know businesspeople. And you 'model what you see.'
- We have found that once a kid gets a shot at interning at an office, even for a mere six weeks time -- the business changes the kid, and the kid changes the business.
- We can this our HOPE B- Business Compact school sites.
- Growing the poor man's Hedge Fund. We are focused on increasing homeownership, small business owners and entrepreneurs. Owners vote. Stakeholders of and in a community care. Homeowners cut their lawn, and no one washes a rental car. It is just that simple.
- We call this our HOPE Inside locations.
- Helping our clients raise their credit scores to 120 points over 24 months, because "nothing changes your life more than God or love, than moving your credit score 120 points!"
- We do this through our HOPE 700 Credit Score Initiative.
You see ladies and gentlemen, we don't have to sit around and simply watch the middle class rate drop from 60% plus in 1971, to less than 50% today.
We don't have to relegate the quality of our lives, and our collective futures, 100% to the whims of random political forces running through our lives.
We don't have to demonize the poor, who don't want to be that way.
We don't have to demonize the rich either, whom -- if we are honest -- most all of us want to be too (rich, I mean). I tell my complaining friends, "you say you hate rich people. No you don't, actually. You hate rich people, until you become rich."
What we hate, is a gamed system. What we hate is a system that appears to be rigged against us. But the thing that changes all of this, we control ourselves.
When you cannot get a job, go and create one for yourself. This is literally -- the American way. It is the foundation of America's wealth creation, and with that, quality job creation too. It was Henry Ford who decided to pay his workers double, so they could then 'buy the automobiles they were building.'
Remember this ladies and gentlemen: every big business, was once a small one.
-- Wal-Mart was Sam Walton with pickup truck and a store front.
-- UPS was Jim Casey, with $100 and a bicycle.
-- FedEx, was and is today an entrepreneur named Fred Smith.
-- Coca-Cola was a pharmacist, who sold the formula for $500, and foolishly refused to accept any stock as part of the sale. He 'only wanted cold hard cash in his hands.' He died a year later. His dream lives on.
I believe that America's dream will live on, but that dream is squarely rooted in the American middle class. Which means the middle class needs to be grown again.
Well, middle class wealth comes from jobs, and jobs overwhelmingly come from the private sector.
And when you realize that half of all jobs in America comes from companies with 100 employees or less, and 70% of all jobs come from companies with 500 employees or less, you also come to another conclusion. Most of our leaders are 'digging in the wrong holes,' and we are 'looking for love in all the wrong places.'
Yes, the American middle class is shrinking, and being hemmed in too, but a lot of this has to do with this companion trend line: there are more small business deaths in America than small business births.
This is simply not sustainable, and we can do something about it.
When you return home tonight, don't just tell your child to go get a job. Tell them -- to think about creating a job too.
I'm doing my part. Tell me how you are you, or someone you know, is doing theirs too.
Saving America, and saving our world, is our business. It is our responsibility.
That buck -- begins and ends with us. If we own it, we can and will solve it.
P.S. Everyone who wants to solve this problem should read Jim Clifton's (Gallup CEO) "Coming Jobs War." He is on my board, and it is brilliant!
Okay, let's go...
John Hope Bryant is the Founder, Chairman and CEO of Operation HOPE and Bryant Group Ventures, a Thinker-In-Residence 800-CEO-READ, and an Inc. Magazine/800-CEO-READ bestselling business author of LOVE LEADERSHIP: The New Way to Lead in a Fear-Based World (Jossey-Bass).
His newest bestselling book is How The Poor Can Save Capitalism: Rebuilding the Path to the Middle Class (Berrett Koehler Publishing), which was voted aTop Book for 2014.
Bryant is a Member of the U.S. President's Advisory Council on Financial Capability for Young Americans, co-founder of the Gallup-HOPE Index with the Gallup Organization, and co-chair for Project 5117, which is a plan for the rebirth of underserved America.
Bryant is the only bestselling author on economics in the world who is also of African-American descent.
Operation HOPE, founded by Bryant, is directly responsible for the U.S. government establishing financial literacy as U.S. federal government policy in 2008.
Follow John Hope Bryant on LinkedIn Influencers here
Photo Credit: Taken by Jared Tennant Photography, at the Conscious Capitalism CEO Summit, 2015, where Bryant keynoted.
Senior Contributor at Liberty Island Magazine, a science fiction, fantasy and horror publication
8 年Stop importing immigrants who undercut wages for the working and middle class while simultaneously consuming disproportionate shares of welfare.
ANALYSIS OF CURRENCY N INTERNATIONAL ECONOMY
8 年USA: OBAMA : OBAMA is leaving USA in DEEPER RECESSION than 2007. kindly go thru the 32 points below --------------------------------------------------------------------------- 1) HOUSE OWNERSHIP is at 1960s level ( 63.4% ) despite @zero% interest rate 2) LABOR PARTICIPATION RATE is 62.6%, the lowest rate since October 1977. 3) has taken 2nd w,war level 110% DEBT / GDP ,USA: OBAMA : i.e. $5 trln in 7 yrs. 4) reduced interest rate to @zero % for last 6 years. 5) SNAP FOODTICKET users grew from 26 mln in 2007 to 45 mln (all time highest ) 6) STUDENT LOAN is $1.1 trln with 17% ( all tym highest DELINQUENCY ) 7) QE @ $3.5 trln easy money printed to prop up the stock market. 8) INTEREST RATE : at present @2.49% is Cost of Capital for Govt , resulting in 26% of Tax Revenue going to DEBT SERVICING. once FED raises rates > just @5% , Interest Servicing will be 67% of Tax Revenue. 9) add to that 250% is NYSE MARGIN DEBT now @zero bound Interest. 10) America’s child poverty levels are worse than in any developed country anywhere,Rank of U.S.: 34th 11) .Median adult wealth in the US ($39,000) is 27th globally, Median income remains lower than it was in 2007, Census said.it's far below the peak set in 1999. 12).Even when “life satisfaction” is measured, America ranks #12, 13)..Education and skills Rank of U.S.: 16th 14).Internet speed and access Rank of U.S.: 16th 15).Health Rank of U.S.: 33rd 16). People living below the poverty line Rank of U.S.: 36th .Officially, 14.5% of Americans are impoverished — 45.3 million people–according to the latest US Census data. 17).Income inequality Rank of U.S.: Fourth highest inequality in the world.ratio of average CEO earnings to average workers’ pay. That ratio went from 24:1 in 1965 to 262:1 in 2005. 18).Prison population Rank of U.S.First. More than 2.2 million Americans are in jail. 19).Corruption Rank of U.S.: 17th . according to Transparency International, a Berlin-based nonprofit. 20) .Stability Rank of U.S.: 20th. The Fragile States Index considers factors such as inequality, corruption, and factionalism. 21) .Social progress index .Rank of U.S.: 16th. A broad measure of social well-being, the index comprises 52 economic indicators such as access to clean water and air, access to advanced education, access to basic knowledge, and safety. 22)Manufacturing output is below 2007 level of Recession , despite all measures 23) as per GINI INDEX of Inequality, USA ranks even below Nigeria. 24) full time employment as % share of total workers has not improved, worse than 2007 level 25) effectively HHDSCR as % of DPI was 30 yr highest @13.5% in 2007 , by reducing interest rates, thr EMI of the economy has come down to 9%. Mere rise of 3% will put it to major slowdown. 26)In the last 65 years nominal GDP growth below 3.7 percent always occurred in a recessionary context, “without exception,” according to Lakshman Achuthan, ECRI Chief Operating Officer. In other words, 3.7 percent GDP growth is an economy’s virtual stall speed, below which it cannot climb or even maintain level flight. Yet, by the middle of last year, year-over-year nominal GDP growth had slipped to 3.5 percent. 27) measure used by the Fed: gross domestic income (GDI), or the amount of money that producers get for their products or services. When the annualized GDI growth rate falls below 2 percent, it often means the country is in recession. In the second quarter, 2012 GDI growth dipped to 1.5 percent and in the next quarter it dropped further to 0.4 percent. 28) Andrew Fieldhouse, federal budget policy analyst with the progressive Economic Policy Institute, says “The United States is mired in a liquidity trap and depressed $975 billion (5.8 percent) below potential output -- in this context expansionary fiscal policy is the only means of ensuring a full economic recovery and avoiding a Japanese-style lost decade . 29) Failing ABENOMICS of devaluing YEN from @80 to now @120+ , over last 18 months hv depressed Emerging market currencies n now EURO almost approacing PARITY > will leave lots pressure on US CURRENT A/C Deficit. 30) Below Poverty Line is 9.4 mln more than pre-crisis 2007 level, despite all measures. 31) Employment to Population Ratio is worse than pre-2007 level , despite @5% unemployment level. once FED raises interest rates situation will turn worse 32) gross federal debt amounted to 55,807 U.S. dollars per capita is more than per capita Median Income of $53,657. this is despite maintaining @0% Interest rate for last 7 yrs. All policies of OBAMA hv plunged USA in deeper DEBT/INCOME ratio than ever before
ANALYSIS OF CURRENCY N INTERNATIONAL ECONOMY
8 年US manufacturing recession: Chicago PMI plummets to 42.9; lowest since 2009 . this is despite @0% interest rate. ECONOMY:USA:INTEREST RATE: 2007 interest rate was 5.25% , ever since FED has dropped it to @0% for almost last 7 yrs. FED increase in rates will spell disaster for US DEBT SERVICING by Govt as well as Households. just waiting to see FED raising it to @3% > 1)67% of TAX REVENUE will go to Interest Servicing (of 110% DEBt to GDP). 2)Household Debt Servicing Coverage Ratio ( HHDSCR ) to DPI ( Disposable Personal Income ) will skyrocket to 12% n above from current 9%.3) Student Loan Delinquency ( now at 17% historical highest ) will also go up. I hv been saying USA is already in FUNDAMENTAL RECESSION,from several standpoints,2 qtrs of negative Growth is immaterial. all u need FED to increase rate to 3% (not even 2007 level 5%) from last 7 yrs @0% >> all hell will break lose.
Economics,finance and accountancy alongside sales expertise.
8 年It's the same and worse in Europe, middle class is deteriorating because of people's and politicians' wrongdoing. And remember, people are people all over the world, it does not always have to be America, not just America. However America I like and understand better, as I take it that you are not talking only about USA, but maybe in general.
Adult educator phd
8 年I suggest 3 things! Hire interns and pay them like any other entry employee as they train. Give them the best tecknology available to learn and study. And last let them travel with work teams as an equal voice. When I was 18 I walked into a high end retail shop and asked if they were hiring? The owner said yes and said you can start NOW! She said blue tags are size 8, pink size 10.... worked there until got my degrees at University! PL PHD