The Big Squeeze – How Obama Killed the Middle Class

Wal-mart is no longer the only retailer full of cheap, poorly-made foreign goods, American cars are made in Mexico and middle-income earners are extinct.

That’s the economy President Obama is setting up for the United States.

Two major agenda items for the President will cause the collapse of the manufacturing and start-up sector. The trans-pacific partnership (TPP) and his new push for raising the ceiling for overtime exemption.

The overtime exemption change won’t have the effect the president expects. Instead of magically raising everyone’s income, it will likely hurt millions of Americans:

“This change is likely to have the opposite of its intended effect and will clearly harm more workers than it helps,” Robert Cresanti, a spokesman for the International Franchise Association, said in an e-mail. “Millions of salaried workers will now become hourly and lose out on key benefits such as workplace flexibility and long term advancement opportunities. This is just the latest example of the Obama Administration unnecessarily meddling in the everyday management of small businesses.”

Obama’s proposed  change will likely force many lower level managers and technical workers into hourly pay and businesses will have no choice but to cap their hours to maintain their budgets. With inflation at historic lows, business have no ability to raise prices – so incomes cannot be increased simply because the president wills it so.

“There simply isn’t a magic pot of money that lets employers pay more just because the government says so,” said David French, National Retail Federation’s Senior VP for Government Relations.

One alternative will be to find someone who will do the job for a lower hourly wage (H1 visas anyone?) so that the overtime costs the company nothing additional. For factories, a more likely approach will be to move manufacturing plants overseas or over the border where U.S. labor laws don’t apply.

The TPP is perhaps the final blow. Making the flow of imports much easier from countries with less stringent labor laws and non-existent safety regulations means that American companies would be crazy not to relocate their plants overseas and import the products back into the country to satisfy the veracious American consumer.

This two-pronged attack will continue the death of the American worker that NAFTA started when it sent textile manufacturer, auto makers and electronics plants to foreign countries so that they could re-import their previously American-made products back into the U.S. for less cost than it took to make it in the United States in the first place.

Highly paid super-skilled workers and extremely low paid unskilled workers will be all that remain – a service economy that imports everything it needs.