Image: © Philip Halling via Wikimedia Commons

Are people getting richer, or have they just stopped saving?

Reuters report investigates where American 'growth' is really coming from

It used to be that the richest people's buying habits were what kept the economy going – creating jobs and all that. But in the last two years, it's been lower-income people spending more... and saving less.

What it means: Reuters looked into the American economy to draw some conclusions on whether things are looking stable, and sustainable.

On the whole, they found, consumer spending is going up – but for the first time in two years, it's the bottom 60%, not the top 40%, who are fuelling the rise.

Unemployment is at its lowest since 2000, so more people are on wages than before. But while hourly wages for lower and middle income workers grew just 2% this year, spending rose by 8%... which means most of the 'growth' (the increase in goods and services produced in the country) is coming from people spending more than they're earning, and wiping out their savings – to the point where one in four Americans say they could not cover a $400 emergency expense.

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Reader Comments

  • RW

    Your right to a degree. You mentioned “the wandering Jew”.

    I elaborate that the Jewish people, historically have tended to migrate almost exclusively to locations that are economically and culturally vibrant already. I would speculate that Jews have thrived in these places and have often improved the bounds of their economies and knowledge base.

    You can also ask; how many massive entertainment conglomerates, Nobel winners or billionaires has Isreal developed? If Jews are so capable, why isn’t Tel Aviv the Rome of our time?

    Jews are successful because they value education, maintain a strong social cohesive, they actively monitor and have a good sense for Zeitgeist wherever they are and they carefully choose the places they settle and congregate themselves heavily in these choice locations.

    But most importantly (haulocaust increased the importance of this aspect), they actually designed their culture for success. They not only attend Harvard, they use what they learned to better the group as a whole. With as much, they studied intricate networking systems, adapted to it and in many cases improved upon them. (See how Japan acquired Aegis warships and made them better).

    Of course there is nothing wrong with any of this. It’s when you elaborately gain disproportionate power in any society where you would stand out, you must take care when attempting to make a society better (Civil Rights movement) and rewriting that society all together (mass immigration). Ask blacks in China, Mexico, Philippines or India how much opportunity they have? Go to businesses owned by their American diaspora and see how many blacks they hire. Go to Silicon Valley and see how many East or South Asian tech workers wish they could work with more black people. California might work as a state, but as a nation, I think your rolling the nuclear dice here. I hope we can succeed as a tolerant pluralistic superpower but at this stage in human societal development, it’s a pipe dream.

    And if Jews really are the icon for success, they would see that fundamental human successes happen over generations. Just look at the rest of the planet? Are we ready?