Hey, poor? CNN says to stop whining: life is good
Losing your house? Food-insecure? Buried in credit-card debt? Student debt? Negative home equity? The double-income trap? CNN says you’re blessed.
The Dow is soaring, and the economy is growing. So why are so many Americans bearish? Fortune’s Nina Easton looks at an economy where money is plentiful, but security scarce.
I don’t know if I’d call the Dow ‘soaring’, given that it is up one day and down the next – while the newspapers treat each day as though the previous one never happened. Overall it is up, surely:
(I had intended to stop being lazy and hotlinking, but I doubt MSN will notice my pageviews in their bandwidth)
We probably said it was soaring back there in February of this year – and look what happened. The S&P 500, the preferred index in many circles, is not so up – although it, too, is up. ‘Soaring’ is still not the word I would choose. Easton makes an interesting point a little later, when she’s done talking about how rolling in it we all are:
Lake hit on it, I believe, with this comment: “There have been times in our history when the American dream was rooted in opportunity, and there have been times in our history where the dream was rooted in security. This is a time, and has been for a couple for years now, where the dream is rooted in security.”
There’s not a lot of security in a fast-paced global economy where workers get ahead by chasing opportunities (not obediently following office rules), by constantly reinventing their careers (not relying on seniority), by self-investing their savings (not counting on company pensions).
In other words, in the new economy, we all have to be entrepreneurs with our own lives – with all the rewards and risks and, yes, anxieties that entails. According to Third Way, middle-aged men are staying at the same job nearly half as long as they were just 20 years ago, and more than 60 percent of workers report they’ve actually had to switch the type of work they are doing.
Add to all that a war in Iraq that America can’t seem to win, and the always looming threat of another terrorist attack here at home, and it goes a long way toward explaining public unease.
Easton’s prescription, then is to be entrepreneurs with our own lives. Has she not heard that thousands of American did that – and ended up with sub-prime and/or Adjusted-Rate Mortgages they can no longer afford? Default rates are at their worst since the depression, and the real ARMs haven’t even hit, yet.
I have a few other things Easton may not have considered (besides housing, job or pension insecurity):
First, from the City Mayors Society:
The survey of 23 cities found civic and government groups received, on average, seven per cent more requests for food aid in 2006 than in 2005, following a 12 per cent jump in 2005. Requests for shelter rose by an average of nine per cent in 2006, with requests from families with children rising by five per cent. More than half the cities said family members often had to split up to stay in different shelters.
With the rising number of urban Americans in poverty, cities, including Los Angeles and Boston, said they could not meet all requests for food and shelter. Instead they had to ration food and other help. The report estimates that 23 per cent of requests for emergency food assistance remained unmet.
This was using official homelessness statistics that economists believe actually under-estimate the true numbers (“woefully outdated”, was one of the terms used).
Second, a report found idly googling the matter, called Two Steps Back: City and Suburban Poverty Trends 1999-2005, from the Brookings Institution:
An analysis of poverty in cities and suburbs of the nation’s 100 largest metropolitan areas, based on data from the 2005 American Community Survey and Census 2000, indicates that:
- In 1999 large cities and their suburbs had nearly equal numbers of poor individuals, but by 2005 the suburban poor outnumbered their city counterparts by at least 1 million.
- Poverty rates rose significantly in Midwestern and Southern metropolitan areas, but remained steady in the West and Northeast.
- Nearly half of large cities nationwide saw a significant rise in their poverty rates, versus about one-third of their suburbs.
- In cities and suburbs where overall poverty rates rose from 1999 to 2005, child poverty rates rose faster.
If Easton would only look up a Gini coefficient every now and then, she might know that ‘plenty of money’ is meaningless to the increasing numbers of families with less and less of it.