November 20, 1997
IN AMERICA / By BOB HERBERT
The Game Is Rigged
The unemployment rate in the United States dropped to 4.7 percent in
October, the lowest it has been in 24 years. Inflation has, for all
practical purposes, vanished. Alan Greenspan continues his mad hunt for the
dragon of wage inflation, threatening always to kill it, but he can't find
it.
Meanwhile, all those economists who argued for years that a drop in
unemployment below the "natural" rate of 6 or 6.5 percent would inevitably
lead to accelerating rates of inflation are now furiously grinding out
reams of learned papers (explanations and rationalizations) that ought to
be published under the collective title "Never Mind."
That's the good news. The not-so-good news is contained in a report
released last week by the omic Policy Institute in Washington. The report
found that despite the low overall jobless rate, persistently high
unemployment continues to plague low-wage workers. Some groups -- including
young African-American women -- are experiencing disastrous levels of
unemployment.
Jared Bernstein, a labor economist and author of the institute's report,
noted that the continuing job squeeze at the low-wage level has ominous
implications for the so-called welfare-to-work initiatives that so many
politicians, starting with President Clinton, are pushing with such vigor.
The report says: "If workers with a similar labor market profile to welfare
recipients are already facing difficulty finding work, our expectations
regarding the success of welfare to work might be somewhat tempered. As one
example, note that while overall unemployment has averaged 5.2 percent over
the past year, unemployment among young African-American women [ages 15 to
25] with a high school [diploma] was 19.7 percent."
Fifty percent of the women who have been on welfare for an extended period
of time do not even have high school diplomas. To throw them and their
children off welfare while pretending that their job prospects are anything
but bleak is irresponsible, cruel and potentially tragic.
Women make up 58.2 percent of the low-wage sector. And not surprisingly, in
the fierce competition for jobs in that sector, individuals who are young,
black and non-college-educated fare the worst.
The report touches on a point that is fully understood by economists and
politicians but not widely known by the general public -- that it is
national policy to restrain growth and keep unemployment artificially high.
"Fearing inflation, the Federal Reserve Board has used monetary policy to
keep unemployment rates unnecessarily high," the report says, "thus
dampening potential wage growth among those who benefit most from tight
labor markets: low-wage earners."
The interests of the monied classes will trump the interests of the lower
classes every time. Alan Greenspan's purpose in life is to protect the
assets of the very wealthy. The value of those assets erodes with every
uptick in the rate of inflation.
Never mind that a modest increase in inflation may be the result of a
growing economy that is providing jobs and higher real wages for millions
of additional Americans. Let unemployment slip a little further, or wages
climb just a little higher, and watch how quickly Mr. Greenspan, the
powerful chairman of the Federal Reserve, raises interest rates to slow the
economy and halt that modest improvement in the quality of life for
ordinary working Americans. Watch how eagerly he slams the door on the
oyment opportunities of those men and women, especially the poor and the
young, who are looking for work.
The game is rigged against those at the bottom, and hardly anyone talks
honestly about it. Last Monday President Clinton urged businesses to
provide jobs to more welfare recipients. And he noted that since last
spring some 2,500 companies, responding to the nonprofit Welfare to Work
Partnership, had ed to do so.
"This has to be an American crusade," said Mr. Clinton.
But The Times's James Bennet, in an article on Tuesday, reported that the
companies had "only agreed hire at least one welfare recipient." Citing
government statistics, Mr. Bennet wrote that "more than 10.2 million people
remain on welfare."
Some crusade.
The welfare recipient, all good intentions, gets up in the morning and goes
off in search of an entry-level job, not knowing and in her eagerness not
suspecting that the game is rigged at the very highest levels of the
national Government.
Copyright 1997 The New York Times Company
