[Futurework] Coal in their stockings

[Karen Watters Cole]

Three from Center for American Progress, Dec. 05, 2003. COAL IN THE STOCKINGS: With only twenty shopping days left until Christmas, disappointing retail sales have suggested to many analysts that this shopping season "may not be as good as some retailers hoped a month or two ago." And the season so far underscores the income disparity rampant in America. So far this season, high-end luxury shops like Saks and Neiman Marcus have rallied (ironically, FAO Schwartz has recently filed for bankruptcy). However, "department stores that cater to middle-income consumers" reported sales under expectations, and even powerhouse Wal-Mart didn't do as well as analysts had forecast. According to a senior economist at the consulting firm Retail Forward Inc, "the middle-and down-market consumers, mostly blue-collar workers, have been hurt by continuing issues with the job market and unemployment." PERILS OF RELYING ON PRODUCTIVITY: President Bush has been touting a recent surge in productivity in his economic speeches this week – up 9.4% in the third quarter. While productivity is a good thing, especially for corporations, for average Americans, it isn't time to pop the champagne corks. Everett Ehrlich, former undersecretary of Commerce, warns, "Productivity growth does not automatically turn itself into economic growth," as wages and consumption need to catch up for there to be any difference. And it's not good news for some of the nation's unemployed: "If productivity is surging, then some jobs will be harder to find — read manufacturing." Another problem discovered by economist Josh Bivens of the Economic Policy Institute: the gains of the recovery are disproportionately going to corporations instead of workers.  "Those who work for a living have reaped historically low gains from the current economic recovery, while owners of corporations have enjoyed historically high gains," Bivens said. According to Stephen Roach, chief economist for Morgan Stanley, this phenomenon has been exacerbated by companies using cheap foreign labor. "Another aspect of America's recent productivity miracle: the growing use of overseas labor. While this may increase the profits of American business — help-desk employees or customer-service representatives in India earn a fraction of what their counterparts in the United States do — the American worker does not directly share the benefits." BAD FOR THE ENVIRONMENT, BAD FOR THE ECONOMY: From a strictly economic review, damaging the environment hurts the economy. According to The Oregonian, "A group of 104 economists, including two Nobel Prize winners, sent a letter Wednesday to President Bush and Western governors saying that policies harmful to the environment also harm the economy in the long run." When the environment is damaged, the cost of "reversing the trend becomes more expensive over time," the economists wrote. An example: When the environment is damaged, it provides "fewer economically valuable services, such as cleansing the water in streams, and communities therefore must provide replacement services with water-treatment plants." The Office of Management and Budget in September found that "the health and social benefits of enforcing tough new clean-air regulations during the past decade were five to seven times greater in economic terms than were the costs of complying with the rules." Thus the Administration's penchant for easing pollution standards – most recently the relaxing standards for toxic mercury emissions – is damaging Americans' pockets as well as the earth. (For more on the harmful mercury threat, click here for a Q&A with former administrator of the EPA Carol Browner.) Also note that the President will be speaking today from a Home Depot in Maryland to talk about the economy.  Home Depot and others would benefit by the Bush2 proposed cuts to OSHA, something Reagan also did when he ran up the federal deficit. - KWC