U.S. economy not actually recovering, rather in serious trouble: Gallup

Despite U.S. mainstream media trumpeting the so-called “recovering” U.S. economy, a new Gallup report said that’s not true.

That’s because there’s been much long-term degradation of the U.S. economy, to the point at which the percentage of Americans who say they are in the middle or upper-middle class has fallen 10 percentage points, from a 61 percent average between 2000 and 2008 to 51 percent today, the report said.

“Ten percent of 250 million adults in the U.S. is 25 million people whose economic lives have crashed,” it noted, adding that these 25 million people are invisible in the widely reported 4.9 percent official U.S. unemployment rate.

Millions of Americans, even if they are gainfully employed in good jobs, are just one degree away from someone who is experiencing either unemployment, underemployment or falling wages, the report said.

There are three serious metrics that need to be turned around or the country will lose the whole middle class, it warned.

According to the U.S. Bureau of Labor Statistics, the percentage of the total U.S. adult population that has a full-time job has been hovering around 48 percent since 2010 — this is the lowest full-time employment level since 1983.

The number of publicly listed companies trading on U.S. exchanges has been cut almost in half in the past 20 years– from about 7,300 to 3,700.

Because firms can’t grow organically — that is, build more business from new and existing customers — they give up and pay high prices to acquire their competitors, thus drastically shrinking the number of U.S. public companies. “This seriously contributes to the massive loss of U.S. middle-class jobs,” Gallup said in the report.

At the same time, new business startups are at historical lows. Americans have stopped starting businesses. And the businesses that do start are growing at historically slow rates, it said.

But all is not gloom and doom, the report said. While free enterprise is in free fall, it remains flexible, and small business can save America and restore the middle class.

Small businesses — startups plus “shootups” that grow big — are the engine of new economic energy. According to the U.S. Small Business Administration, 65 percent of all new jobs are created by small businesses, not large ones, Gallup said.

But there is a problem: The deaths of small businesses recently outnumbered the births of small businesses.

The U.S. Census Bureau reports that the total number of business startups and business closures per year crossed for the first time in 2008.

In the nearly 30 years before that, the U.S. consistently averaged a surplus of almost 120,000 more business births than deaths each year. But from 2008 to 2011, an average of 420,000 businesses were born annually, while an average of 450,000 per year were dying, Gallup said.

“America needs small business to boom again. Small businesses are our best hope for badly needed economic growth, great jobs and ultimately accelerated human development,” Gallup said.

Xinhua

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U.S. economy not actually recovering, rather in serious trouble: Gallup