BOOM FOR WHOM? Economic Apartheid in America A Primer on Economic
Inequality and Insecurity
(full article at tompaine.com)
Chuck Collins and Felice Yeskel are co-founders of United for a Fair
Economy, an independent, nonpartisan organization dedicated to drawing
public attention to the growth of income inequality in the U.S.
Editor's Note: The following excerpt is taken from the introduction to
Economic Apartheid in America: A Primer on Economic Inequality and
Insecurity (New Press, 2000), by Chuck Collins and Felice Yeskel, with
United for a Fair Economy.
THE AMAZING U.S. ECONOMY?
In May 1997, the cover story of U.S. News and World Report depicted a
superhero flying through the air with the caption "The Amazing American
Economy." The article declared that this is the "best economy in modern
times" with a roller-coaster, yet booming stock market, low unemployment,
high productivity, expanding affluence, nonexistent inflation, and
boundless opportunity for those with money to invest. The accolades have
continued for three years, and the Dow Jones Industrial Average crossed the
11,000 mark in May 1999.
So are these the best of times? What do you see when you look at the signs
of the times? What are the signs of economic health? What's working? What
are the signs that all is not well?
Inflation is indeed flat. Unemployment as a national average is low. Yet
the much touted prosperity brought on by the economic boom of the late
1990s has not been evenly shared. Today's economy is particularly rewarding
if you own lots of assets such as real estate, stocks, or bonds. However,
if you are on a fixed income or depend on a job to bring home wages or a
salary, things have been a bit rough. If you're not part of the 30 percent
of the population that has more than $5,000 in the stock market, then all
the media hoopla about a booming economy doesn't help. In fact, you're
invisible. The economy is not booming for everyone. And the gap between the
very wealthy and everyone else is growing dangerously wider.
Being poor in America has always been a rocky road, worsened in recent
years by social scapegoating and even further eroding living standards. But
many people in the American middle class also share a growing sense of
precariousness. "We have the impression from television and the media that
our prosperity is huge, but that is not the middle class experience,"
observes Marc Miringoff, a Fordham University expert on social indicators.
The signs of the economic times present two divergent pictures. Some of
these signs include:
*** The stretch limousines are longer, yet more people are homeless. There
are more "statement house"" mansions being built, yet fewer affordable
apartments to be found.
*** Unemployment figures are low, yet 1998 was a record year for worker
layoffs.
*** Stores that serve the middle class have gone out of business -- or have
remade themselves into either bargain-basement outlets targeted at working
families or luxury retailers to chase the largesse of the nation's richest
shoppers.
*** Consumer spending and borrowing have gone up while personal savings
have plummeted.
*** Top corporate chief executive officers (CEOs) pay themselves
megamillions while the wages of over half the U.S. workforce have remained
flat or fallen.
*** A growing number of now jobs are temporary or part-time and do not
offer health insurance, retirement, or vacation benefits. Two out of three
new private sector jobs are in the temporary employment category, with
median wages at about 75 percent those of full-time salaried workers. Our
largest employer is now Manpower, Inc. -- a temporary agency.
*** Over the past two years, the Federal Reserve has allowed unemployment
to fall and wages to rise a little. Certainly if push come to shove,
Federal Reserve Chairman Alan Greenspan would side with Wall Street over
wage earners, but since 1996 he hasn't had to choose sides.
*** Thirty zip codes In America have become fabulously wealthy. Meanwhile,
whole urban and rural communities are languishing in unemployment,
crumbling infrastructure, growing insecurity, and fear.
*** In the final month of each year, the juxtapositions become more ironic.
Newspaper articles that chronicle the booming bonuses that go to a handful
of Wall Street financiers are placed next to stories of destitution and
insecurity and exhortations to "Remember the Neediest!"
WARNING: ENTERING THE NEW GLOBAL ECONOMY
Welcome to the new global economy, designed by and for America's largest
corporations and wealthiest individuals. From their point of view, this is
the biggest bash of the century. The economy at the beginning of this
century makes the Reagan revolution of the 1980s look like a sedate card
party.
The people who own America are working overtime to convince you that the
economy is fantastic. Look at that climbing stock market, even when it's on
a roller-coaster. Check out the growing number of millionaires and people
invested in the stock market with do-it-yourself internet brokerages. The
message seems to be: "Hey Jack (or Jane), what's your problem? How come you
ain't rich? Get off your duff!"
But the reality is that many people are working extremely hard and facing
growing economic uncertainty. Personal debt and bankruptcies are rising.
While "keeping up with the Joneses" in our high-tech, advertising-driven,
consumer society accounts for some of this, a large percentage of workers,
particularly those in their twenties and thirties, have two jobs with no
benefits. A growing number of people are living without health insurance
and postponing needed medical treatment. In the last twenty years, a higher
percentage of people have little or no retirement security and are
experiencing no future job security.
People are being told: "You are on your own"; "Security is an illusion";
"Don't expect anything from your employer"; "Don't expect anything from
government (especially as we dismantle it)"; "Get out there and become an
entrepreneur!" All these messages are shaped by the most rich and powerful
people in our country, people who have left nothing to chance in terms of
their own personal economic security and comfort.
Meanwhile, the media gives us an entirely rosy picture of the economy. We
do not see many news stories about economic insecurity and growing
inequality in America. Perhaps Viacom (the new owner of CBS), General
Electric (the owner of NBC), Disney (the owner of ABC), and Time Warner
(with its controlling interest of CNN) do not believe that economic
inequality is a worthy story. We have to get the real story about our
economy from somewhere else. The mass media encourage us to look up the
economic ladder and to fantasize about and identify with the superrich,
while unscrupulous politicians encourage people to direct their blame and
anger toward people one or two rungs down the economic ladder. The
scapegoats for the polarized economy include women on welfare and new
immigrants.
During economic hard times, we have experienced periods of both progressive
and regressive populism. The rural Populist movement of the 1880s and 1890s
was mostly progressive, as it encouraged people to look at large
corporations and concentrated wealth as the source of their insecurities.
However, during the 1980s and 1990s we have experienced a wave of
regressive populism as people are encouraged to look down the economic
ladder to blame those below them.
THE TRENDS: RISING TIDE, SINKING BOATS
The larger economic trends of the past two decades help to explain many of
the signs of the times we currently observe. Each of these following trends
will be examined in more depth in Chapter Two.
Falling Wages: There has been an overall growth in income, but virtually
all income growth has gone to the highest-earning fifth of the population,
with the biggest gains flowing to the richest 1 percent. Real wages, the
actual spending power of people's paychecks, for the bottom 60 percent of
the population have stagnated or fallen. There is some good news, as in
1997 median real wages began to climb back to where they were in the 1970s,
but this hardly qualifies as an economic success story.
Wealth Inequality: The overall wealth pie has grown, but almost all of the
gains have gone to the wealthiest 1 percent of households. The top 1
percent of households currently have more wealth than the bottom 95 percent
combined.
Widening Gap Between Highest And Lowest-Paid Workers: While real wages have
fallen for half of U.S. wage workers, compensation to top managers and CEOs
has skyrocketed. Inequality in wages is at an all-time high.
Losing Ground At Work: During the last twenty years, three out of four U.S.
wage earners have lost ground on the job. In real terms, this means that
people's wages have not kept up with inflation or that workers have lost
some portion of benefits they previously had. Instead of having a pension
or 100 percent health care coverage, many workers now have no retirement
security or pay some or all of their health care costs. Many workers are
now temporary or part-time workers with no benefits. Some have lost their
jobs and have not been able to find a comparable paying job or any job at
all.
This means a lot of people are feeling the sands shifting beneath their
feet. A generation ago, people were more likely to know where they would be
working in five years. Today, half of the population says they feel no
employer loyalty nor job security.
Louis Proyect
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