Good times?

Louis Proyect lnp3 at
Tue Dec 14 08:35:49 MST 1999

The Atlantic Monthly (

Is this the best economy in years? It depends on whom you ask, and where in
the world they live

by Jack Beatty

December 8, 1999

It's not every day that you get an audience with a multi-millionaire. My
chance came earlier this year, in San Francisco. My millionaire was Ann
Winblad, a venture capitalist who has backed many successful high-tech
start-ups. In our brief interview she noted in passing that today's economy
was the best in her lifetime. How's that, I did not have the brass to ask,
for I could hardly bandy words about the economy with someone whose
sagacity on the subject has been so lucratively vindicated. Still, her
lifetime straddles the 1960s, a decade when the median family income rose
41 percent and nearly 40 percent of American workers belonged to unions. By
dismal contrast, since 1973 the median income has barely risen 7 percent,
with nearly all the cream going to the richest 20 percent, and union
membership is down to 10 percent of private-sector workers. How could this
economy be better than the 1960s'?

But of course there are two economies: the first is the money economy
described in the business pages of newspapers and magazines, which is
booming; and the second is the existential economy of daily life, which is
not. When opining on the state of the economy, journalists often mistake
the propaganda of prosperity for the real thing.

A recent report documents a poignant gap between the expectations of young
workers and the reality of the second economy. "High Hopes, Little Trust: A
Study of Young Workers and Their Ups and Downs in the New Economy" was
commissioned by the AFL-CIO and conducted by Peter D. Hart Associates, a
respected polling organization, which interviewed 752 workers between the
ages of eighteen and thirty-four and 401 workers older than thirty-five --
a statistical sample representing opinion nationwide. Among the findings:

--Young workers see two different sets of criteria for judging the two
economies -- theirs and the media's. Fifty-three percent of them name the
standard of living as their number one measure, 41 percent the availability
of good jobs, 26 percent the conditions of poor families, 7 percent the
stock market and corporate profits. Although the stock market held a low
ranking in their personal criteria, a full 53 percent believed the opposite
was true of the media.

--Eighty-two percent of the youngest young workers are hopeful and
confident about the future, yet their hope is at war with their realism.
While 58 percent believe that, with education and diligent application, you
can still get ahead in America (compared to 42 percent of older workers),
only 29 percent think the economy is mainly creating well-paying jobs.
According to the Department of Labor, they have that about right. Six of
the ten fastest growing occupations over the next decade are forecast to be
cashiers, retail clerks, receptionists, home health aides, nurses, and
teacher aides.

--Young workers are markedly resentful of the slights and neglects of
management. Only 2 percent agree that when companies do well the credit
should go to management; 19 percent think workers should get the credit; 79
percent think that both should get equal credit, but 78 percent believe
that management receives the rewards. No surprise, therefore, that 57
percent doubt that their employers treat them fairly.

--Only 43 percent of young workers have pension plans with employer
contributions as compared to 60 percent of older workers. Fifty-one percent
of whites have employer-provided health care, while only 39 percent of
Latinos and 36 percent of African-Americans do. That ethnic-racial skew is
typical of the study's findings throughout.

--Seventy-three percent of young workers have no college degree. They are
indeed "a forgotten majority," as the study calls them. Only 36 percent of
this group earn more than $20,000 per year, as opposed to 68 percent of
college graduates. As other studies have confirmed, the forgotten majority
suffered a 29 percent cut in real wages between 1970 and 1995.

What to make of this cascade of opinion and evidence? Young workers
interpret the data themselves in the list of policy changes they want
government to implement. Nearly 85 percent "strongly" favor requiring
employers to provide basic health and pension benefits. Eighty-four percent
want to strengthen laws requiring equal pay for women. Eighty-two percent
want to expand the Family and Medical Leave Act, which currently covers
unpaid leave, to require employers to provide paid leave. Large majorities
want to raise the minimum wage, "to make it harder to replace full-time
with part-time jobs," and to end tax breaks "for companies that pay CEOs
too much."

This agenda would represent the profoundest change in the government's role
in the economy since the New Deal. To compare this agenda with those of the
presidential candidates -- even the most liberal among them, former senator
Bill Bradley -- is to recognize how conservative, how pro business, the
climate of opinion has grown in the age of the global economy.

Not just opinion leaders but voters too, I think, are fearful that saddling
American corporations with obligations of the sort young workers want to
impose on them will handicap corporations and give the advantage to foreign
rivals, slowing the economy and costing jobs. Young workers feel
economically insecure now, but surely they would feel worse if, under the
burden of unilateral American regulation, more and more corporations moved
their operations abroad. This is the dilemma of reform under corporate
capitalism and within the context of the global market. Reform at home
depends on reform abroad. We can't secure the jobs of young American
workers without securing social decency for workers in poor countries. The
driving force in globalization -- the power of the multinational
corporation -- exceeds the countervailing power of the federal government,
undoing the social bargain struck between labor and capital in the New
Deal. The protestors in Seattle last week, demanding that American labor
and environmental standards be respected in international trade, were
asking for a new New Deal -- this time for the global economy.

Jack Beatty is a senior editor at The Atlantic Monthly and the author of
The World According to Peter Drucker (1997) and The Rascal King: The Life
and Times of James Michael Curley (1992).

Copyright © 1999 by The Atlantic Monthly Company.

Louis Proyect

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