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Previously in Politics & Prose:

Is W. Inevitable? (November 17, 1999)
It looks like George W. Bush has the nomination in the bag. Christopher Caldwell offers a scenario of how Bush could become a loser.

Step Right Up (October 15, 1999)
Scott Stossel asks, What does the Reform Party's cast of odd characters suggest about the state of American politics? Think Fellini. Think David Lynch.

The Billionaire's Curse (September 22, 1999)
Jack Beatty wonders why we should feel sorry for Jim Clark, who founded Silicon Graphics and Netscape and epitomizes "capitalism's hurricane of progress."

Sex and the Social Critic (August 25, 1999)
Jack Beatty on Stanley Kubrick's Eyes Wide Shut -- and what the film's detractors failed to see.

Most Valuable Player (July 21, 1999)
Jack Beatty on Michael Jordan and the New Global Capitalism, a new book examining the economic impact of his Airness.

More by Jack Beatty in Atlantic Unbound.


Join the conversation in the Politics & Society conference of Post & Riposte.

A New Deal for the New Economy

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.


    Join the conversation in the Politics & Society conference of Post & Riposte.

    More on politics and society in Atlantic Unbound and The Atlantic Monthly.


    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.
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