NEW YORK -- It was reassuring for many to hear Alan Greenspan, chairman of the Federal Reserve System, say that the current American economic performance was about the most impressive thing he has seen in 50 years of daily numbers-watching. "Strong growth and low inflation" were the numbers he cited.
But there are other people watching other numbers who raise fundamental questions about what is actually going on in these boom-boom-booming times. The numbers people at the U.S. Department of Labor, for instance, report this:
While median earnings for college graduates increased by 12 percent from 1980 to 1996, the median earnings of high school graduates declined by 6 percent.
In 1982, the top 10 percent of salaried employees made an average of $24.80 an hour and the bottom 10 percent averaged $6.28. By 1996, the top 10 percent were making $25.74 and the bottom 10 percent made $5.46. (All these numbers are in inflation-adjusted 1997 dollars.) So, the pay ratio between top and bottom went from 3.95-to-1 to 4.72-to-1.
If benefits are added to those earnings, the compensation ratio between the top and bottom tenths has gone up to 5.43-to-1.
In simple words and non-numbers, low-paid workers don't get health care and pension benefits anymore. Basically, people who work with their hands have gone from being employees to day workers. While more than 80 percent of American workers get some paid vacation or paid leave, only one-tenth of the bottom tenth get any days off at all.
The numbers people at the the Center on Budget and Policy Priorities, a liberal think tank, report these figures:
A typical poor family now pays an average of 60 percent of income on rent and utilities, twice the government's official "affordable" rate, which is 30 percent. There may be low inflation, but rents for the working poor have increased 21 percent in the past four years. The number of poor families paying more than 50 percent is 4.4 million, compared with 4.1 million in 1993.
(On the plus side, only 14 percent of apartments are classified as "substandard" by the Housing and Urban Development Department -- meaning no reliable plumbing -- compared with 22 percent in 1985. That probably means landlords now have the capital to make improvements but are, of course, passing the costs along to tenants.)
The Economic Policy Institute, another liberal research group, reports these numbers:
The wage rates of college-educated men and women are becoming more equal, but the principal reason is that male college graduates were being paid lower entry salaries in the 1980s and early 1990s. Women graduates' pay increased 4 percent from 1979 to 1994, but men's first-job-out-of-college pay declined by 8 percent.
At the moment, more than 20 percent of all new private-sector jobs are classified as "temporary" -- a euphemism for no benefits. So it is not only the poor, that bottom tenth, who are living day-to-day.
More than one in four American children are officially classified as living in poverty. The number for black children is double that, more than 53 percent.
So, there is more to life than a cheerful Chairman Greenspan and gravity-defying stock markets. We live in a world of useful cliches. There may be a statistic that applies to them as well as anything else -- half are true.
"A rising tide," it seems, does not really lift all boats -- or at least it does not these days. On the other hand, paraphrasing Winston Churchill on democracy, it is certainly true that capitalism is the worst of all possible systems . . . except for all the others.
This booming economy is a terrific thing for most of the people most of the time, but it is a mean one in many ways, genuine but not generous. History shows that the kind of Darwinian capital accumulation going on right now eventually leads to noisier and more dangerous explosions.
Vigilance is the price not only of liberty but also its opposite, order. You can screw all of the people some of time, and some of the people all of the time -- but you better check the proportions and ratios now and then.
Richard Reeves is a syndicated columnist.
Pub Date: 6/23/98