A Few Facts and Figures

Tips When Borrowing Money From Not-So-Great Sources Of Credit

    1. The U.S. borrows $2.1 billion everyday to pay its debt, and the average American household is carrying more than 9,000 in credit card debt. Today’s so-called middle-class families, with two-working spouses are in worse shape financially—they save less and owe more— than a single-income and middle-class family of 30 years ago (pg 30).
    1. Real income for the bottom 50 percent of the U.S. populace over the last 25 years has remained relatively flat and the bottom 20 percent has experienced a slight decline. The top one percent experienced a sevenfold increase of income during the same period (pg 31).
    1. As many as 69 percent of American (92 million people) earned less than $50,000 in 2003. The average adjusted income, after expenses and line-item deductions, for this group was $19,512— not very much money left to pay for food, transportation, and clothing (pg 78).

      savings and budget

    1. Tuition at community colleges averaged $2,191 in 2005-06, and they enrolled 46 percent of all undergraduate students attending college. Tuition at private colleges, including room and board, averaged more than 31,000. The community college is becoming the forced-choice among students of moderate-income; nonetheless, their fundraising ability accounts for less than one half of one percent of all private funds donated to colleges. One likely reason is that a class bias exists in the business and philanthropic community helping to perpetuate a two-tier system of higher education (pg 81-82).
    1. U.S. production is peaking. China and India each graduate four to one more scientists and engineers than the United States, indicating where tomorrow’s innovation, and inventions will come from: Even worse, there is now reverse “brain drain” from the West to the East, as foreign science/math students graduate from college and leave the U.S. and follow the lure of economic opportunity back to the East (pg 95-96).
    1. In 1980, the top one percent in the U.S. owned 21 percent of the nation’s wealth. By 2005, they owned 35 percent, equivalent to what the bottom 95 percent owned. In 1980, the same top one percent earned 8.2 percent of the U.S. income; in 2005, they earned 22 percent, equivalent to what the bottom 50 percent (150 million Americans) earned (pg 140).

These facts came from my book Class Counts which you can find here: http://www.allanornsteinbooks.com

Like and comment what you think which is the most interesting (or eye-opening) figure.


When the American Dream is just a Dream

Unemployment Report

A recent article focusing on the odds of employment after graduating in Nevada put a close-up perspective on a nationwide issue. There’s a growing number of graduating students, and all are hoping to achieve some sort of well-paying job that correlates to their major. But what jobs await them? The answer is startlingly bleak.

Underemployment is nothing new in the last couple years. Its something America’s been struggling with since the recession and collapsing of industries (like the housing market). But now, during what can be considered the ‘reconstruction’, there’s a high number of unemployed workers (with education) that either lack experience to get the job they want or are overqualified for entry-level positions elsewhere.

Over the past couple months, there’s been an addition of 280,000 jobs to the US job market, and yet unemployment rose ever so slightly from 5.4 to 5.5. According to HuffingtonPost, the bulk of these jobs are driven by construction and health care: and this could be one of the reasons why college graduates struggle in finding appropriate work in their field. And even though our economy is consumer based, our consumers are acting more cautiously than in the past. This makes jobs, wages, and wage-increases the most viable way to get them spending again.

Education vs Experience

It sounds like a relatively simple plan: graduate, get a job, contribute to capitalism. But what usually ends up happening is students are often forced to work while earning their education in order to help avoid crippling student loan debt. While struggling to get on your feet after and even in college used to be a sort of ‘rite of passage’ to becoming an adult, the period of time to do so is increasing. And the longer it takes to get “comfortable” in the professional/working world, the more difficult it is to do so. Many end up living at home to try to curtail expenses.

In my book, I talk about how

Our economic system is partially based on a culture that thrives on independence and individualism, not on the collective good… It is fueled by the spirit of work hard, and inner-directed behavior. If I work hard, and with a little luck, I’ll get what I need, and I don’t have to be concerned nor worry about the person who cannot or will not work as hard… it corresponds with the notion of Social Darwinism.
Wealth vs. Work (pg 36)

So what are the currently unemployed supposed to do? And what of those just graduating and future graduates that are going to be entering an over-saturated market?

Eeny, Meeny, Miny, Social Programs

Social Mobility - Student protest, London, 9 November 2011

We’re living in a time where upwards mobility is becoming more difficult, and the middle class is shrinking (and slipping) more and more into poverty. Social programs are used to combat poverty and have been a controversial topic since their inception, but there is finally hope in building a bigger picture on their effects on families. The thought of programs nowadays is that they’re a sap to government resources. That they’re essentially useless and are cushions for more lazy people who’d rather live off disability than get a real job. In many cases, this is true but recent studies featured in the NYTimes showed that

“much of the benefit appears to derive from helping low-income families pay for basic needs like food, housing or health care, or simply reducing the intense economic pressure…. In addition to long-term benefits, the safety net, of course, supports many Americans right now. In 2013, income and nutrition assistance programs lifted 46 million people, including 10 million children, out of poverty, while health programs benefited tens of millions more…. Moreover, safety-net programs do not discourage work in any big way
Smart Social Programs– NYTimes.com

While there is an undeniable fact that many programs have the proclivity for dependency, the benefits can’t be denied either. In the light of recent cuts to nutrition assistance, health care, housing vouchers and other social programs, studies like this can help determine exactly what programs are   most effective. They could also become a good way to better screen potential recipients and have more appropriate contingencies for remaining on any given program. Regardless of which programs are kept, it’s hard to deny their position in securing a safety net for downwards mobility.

10-26-11 Press Conference to Protect Social Security, Medicare and Medicaid

In my book, I talk about the decline of the middle class. The decline is due in part to people slipping into poverty- which can often happen from being denied help from a program. Deciding who gets help (and how much help) is a thin wire to walk across, and it doesn’t help that the government tends to borrow from Social Security and Medicare funds to finance its current deficits.

“The common people… should be concerned that the network of public and private social and health protection is unraveling. There are fewer safeguards against downward mobility in a world pulsating with economic insecurity for the vast unemployment, limited employment opportunities and lw wages; loss of retirement investments and pensions; deflating home values and equity; soaring medical bills and health insurance costs…”
Wealth vs. Work: How 1% Victimize 99% (pg 22)

So which programs do we keep? Which ones do we cut? Who gets them and for how long? Obviously, questions like this are why we have a government but who’s to say they’ll make the right decision, even with this new information?

Mobility in Moving

When starting a family, one of the first questions asked is “Where will we live?” Ultimately, whether out of choice or necessity, families must choose between staying in the area they’ve been living in, or to move elsewhere. Instinct often nudges some to stick to their roots, to not venture out into unknown territory, even if it were to be to a better neighborhood; there are those who feel a type of sentimental pride in their neighborhoods.LuMaxArt Golden Guys APR Home Moving Concept

But is this really the right way to go – especially when it comes to your children’s success? Research that has been conducted over the past few years showed evidence that moving to a better neighborhood is beneficial not only for the children in the household, but for other members as well. According to Raj Chetty and Nathaniel Hendren’s study, there are a few necessary key components that can help determine if a neighborhood will lead to higher success for a family.

“Within a given commuting zone, we find that counties that have higher rates of upward mobility tend to have five characteristics: they have less segregation by income and race, lower levels of income inequality, better schools, lower rates of violent crime, and a larger share of two-parent households.”

Equality of opportunity- Raj Chetty and Nathaniel Hendren

The benefits of moving include a higher college attendance rate and a relative decrease in the poverty rate. However, the benefits are dependent on time and age, according to the New York Times. In the article, the study said, “In the mid-to-late 1990s, 4,600 families living in public housing entered a lottery in which the winners were offered a voucher that enabled them to move to better neighborhoods.” There were those who were given the opportunity to move, but were still unable to reap the benefits of moving to a better neighborhood. This seemed to be the case when children were above a certain age during the move, making mobility less plausible to a parent.

 Moving sucks

That being said, what’s to stop anyone from any neighborhood from achieving the “American Dream”? And what of those who cannot achieve their dreams due to their economic situation or any other hindrance that life is known to give? It seems that whether given the opportunity or not, there’s always the option for “failure” in the sense that a person/student fails to increase their current amount of wealth and/or succumbs to financial instability. It does not, however, account for the general happiness of the person, who may be earning less money doing something they truly love.

“Given how American society has evolved, the idea is… to achieve a balancing act which rewards merit and hard work and provides  a floor or safety net for low-performing, slow running and weaker individuals. But despite this ideal standard for society, we are confronted with the harsh truth that this nation remains much more stratified than what its principles suggest… We would like to believe that through merit and hard work anyone can achieve the American dream”

Allan Ornstein, Wealth vs. Work: How 1% Victimize 99%

But it seems that simply ‘going to school and graduating college’ does not always make the cut for immediate success. There are those who grow up considered ‘doomed to fail’ due to their neighborhood or finances. Shouldn’t they still be provided with an opportunity to live a comfortable life? There is so much talk of how much education or a good neighborhood will lead to success – that having a passion for your job and financial stability will naturally go hand-in-hand if you do things the good ol’ fashioned “American” way.

But what do you do when neither of those options are viable or plausible?

Money Over Matter

The college admissions process can seem confusing, but many of the hoops to jump through are there to make sure candidates meet the standards set at a (usually) high bar. A certain SAT grade, along with a particular GPA correlated with it, are often the only two things keeping students out of college.

Most less-selective colleges have hard admission cutoffs for prospective. For example, the minimum combined reading and math SAT score could be an 830, as long as the student maintained at least a C average GPA. Students can fall to either side of this line, according to the New York Times, and students who did not pass that set bar were rejected from college a majority of the time. To be exact, roughly half of the students who cleared this standard graduated with a bachelor’s degree, as compared to only 17 percent of those who did not meet this standard–regardless of how marginal the difference was.

There have been a few studies of the students that fall to either side of this line over the years. One such study found that young adults who fell above the line and went to college made an average of 22 percent more in their late 20s than those who fell just below the cutoff. This is a statistic that contests ardently to the notion of “go to college to live a successful life.” However, there seems to be an unexplored caveat of this dictum. How many of those students making 22 percent more than those who did not go to college were already wealthy?

According to the Wall Street Journal, “Students from the wealthiest families outscored those from the poorest by just shy of 400 points,” which is just another example of “economic inequality result[ing] in much more than just disparate incomes”

BN-EX013_SAT100_G_20141007150853In my book Wealth vs. Work, I discuss both equality and inequality financially. There are many wealthy students who are given the opportunity to go to college, but either wish to pursue a different career path or are otherwise disinclined towards college.

“When we talk about equal opportunity, eventually the question arises as to whether everyone should have the right to go to college. If everyone has the right to go to a high school education, why not college? …[T]here are many children whose academic limitations cannot be traced to poverty or deprivation. Children who come from upper-class homes have the advantage of social capital, and have parents who can hire private tutors, if necessary. They also have the ability to move to a successful school district- where… the school climate is more conducive to learning.

Others who are less fortunate start out on a less than equal footing and continue to experience family, school, peer group, and community handicaps that only increase their disadvantages- and thus are often doomed to disappointment.”

-Allan Ornstein, Wealth vs. Work: How 1% Victimizes 99%. p. 214

Some say that college dictates success–that social mobility relies on education. Why, then, do those those at the bottom of the totem pole have a society set against them getting a college education? Does excellence matter anymore, or has higher education become a result of money and circumstance, instead?

Robots are the new labor force

When you think of the future, what do you think of?

I think: ROBOTS

That’s right, robots, and machines, that are going to be so technologically advanced that the workforce may not be able to compete with these machines.

Today, machines can process language, recognize faces, read expressions, and even carry out conversations with emotion. The future is not so far ahead.

According to the New York Times, “Machines aren’t used because they perform some tasks that much better than humans, but because, in many cases, they do a ‘good enough’ job while also being cheaper, more predictable and easier to control than quirky, pesky humans. Technology in the workplace is as much about power and control as it is about productivity and efficiency.”

“We no longer need humans to do the heavy lifting, counting, packing, inspecting and moving of items. In addition, robots work around the clock, on Saturday and Sunday, and they don’t get hurt and sue their employers. They may break down and need a new bolt or chip once in a while, but that sure beats a million dollar lawsuit for alleged discrimination or exclusion from meaningful opportunity. As The Economist declared on a recent cover page about robots, they are the “immigrants from the future.” We may not see it at the end of the corner, but technological replacement and unemployment is around the corner. Protectionism will not solve the problem. Outsourcing, global low-labor costs, and technological displacement are converging at the same time and affecting the nature of work.”
-Allan Ornstein, Excellence vs. Equality: Can Society Achieve Both Goals?. Ch. 4, p. 11

Historically, there is no need to fear as long as people stay rational. During the Industrial Revolution, machines replaced manual labor. However, all we needed was a little more education and knowledge. Machines are just machines, after all. What we need is to use the machines and robots to empower and enhance our work, instead of staying idle and letting technology take over. Yes, the robots are coming…but to be afraid of them is pointless.

The U.S. is losing its top spot in the economy, experts say

The United States government is far divided, which could cost the nation its top spot in the economic world. As it slips toward ceding its supremacy, the United States could be handing over its power to other, faster developing nations.

“It’s almost handing over legitimacy to the rising powers,” said Arvind Subramanian, the chief economic adviser to the government of India, in a New York Times article. “People can’t be too public about these things, but I would argue this is the single most important issue of these spring meetings.”


There are several reasons for the United States slipping, but people can be sure that the fall is by no means voluntary. The U.S. is reeking of political infighting, along with financial strains of its own. Internal problems can often overwhelm the government. How does a government hold onto international status if it is having trouble within its own country?

“Experts say that is giving rise to a more chaotic global shift, especially toward China, which even Obama administration officials worry is extending its economic influence in Asia and elsewhere without following the higher standards for environmental protection, worker rights and business transparency that have become the norms among Western institutions,” according to the New York Times.

China has been seen as less stable in recent years, due to a diminishing growth factor, but the nation is still rapidly developing. Experts have debated China’s future, and the superpower’s economy is not headed for an inevitable disaster.

“At what point does the rickety architecture of civilization begin to collapse? What are the limits of American power? Americans are an optimistic people. But make no bones about it – we are in decline, and our standard of living is bound to be reshaped, as other centers of economic growth reconfigure the world order. The 2008 financial meltdown, initially caused by Wall Street greed and irresponsible risk involving some $33 trillion in credit default swaps that few people involved fully understood not only dragged down the U.S. economy, but also the global economy…It was the emerging nations, not only criticizing the U.S. for dragging down global markets but also it was China, Japan, and Saudi Arabia surfacing as the nations with fat wallets and the likeliest candidates to assist distressed countries – all symbols of the shifting landscape of economic power and the future test of the American economy.”

-Allan Ornstein, Wealth vs. Work: How 1% Victimizes 99%, p.18

What do you think of the U.S. economy? Is it in decline, or do you still see glimmers of hope in the seams of the nation?