The technical term is “structural unemployment” for what has happened to the middle class in the US.
The reality is that US corporations have focused largely on their profits at the expense of their workers (jobs and income) through outsourcing, technology, and financialization (buybacks).
The obsession with profits has doing more than push their stock prices up without real underlying sales growth (see This Will Not End Well).
The other reality is that in countries such as Germany, manufacturing corporations invest in their workers. The average hourly wage in Germany for example is $37.14 while here the average wage is $23.70 (source: Levinson). Germany companies are competitive, profitable and they invest in their workforce.
For the US to get out of “structural unemployment,” corporations must stop outsourcing and financialization and go back to investing in their companies and the US worker.
For the complete analysis, see The Causes of Structural Unemployment.
The cost of US “structural unemployment”
The role of banks over the last 15 years
With the repeal of Glass Steagall in 1999, banks have looked at profits rather than their role within the economic landscape. They shifted to structuring products and financialization. This reduced capital formation (as illustrated by the velocity of money) and ultimately has led to rising unemployment.
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” Upton Sinclair
