Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, December 6, 1994 TAG: 9412060073
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: JOHN CUNNIFF ASSOCIATED PRESS
DATELINE: NEW YORK LENGTH: Medium
While this isn't the most luminous statement that can be made about the economy, it isn't a contradiction. Many people are benefiting from the growing economy, but many are not.
If you are one of the beneficiaries, it may be difficult to understand any complaints, since almost all the popular evidence supports the notion that in almost every way the economy is getting better and better.
Gross domestic product grew at a strong 3.9 percent in the July-August-September quarter, for example. Profits were up, consumer confidence reached a four-year high and buyers used credit cards like there was no tomorrow.
Work rolls have also been improving, as indicated by the November report showing 350,000 people found jobs, helping to lower the unemployment rate to a four-year low of just 5.6 percent.
That's a strong economy, but it's such strength, contrasting so sharply with the late and unlamented recession, that draws attention to the fate of those who can't join in the fun. They are many and varied.
Those with loans, for example, and their number ranges all the way from Uncle Sam, biggest single borrower of all, to the poor credit risk who must pay high rates to establish credit-worthiness.
The Federal Reserve has raised interest rates six times this year and is likely to raise them again, perhaps before Christmas. That means holders of variable-rate mortgages are getting squeezed.
Maybe that doesn't sufficiently emphasize their plight. They are being crushed; the mortgage note they renegotiated at a low rate two years ago now emaciates the budget every month. For some, it means hundreds of dollars.
Those on the bottom rung of the labor market also are doing poorly. Wages in the lowest-level service jobs remain near the minimum, and there is no pressure for them to rise. The unskilled are not recovery participants.
Greg Tarpinian, economist for the Labor Research Association, which provides news and analysis for trade unionists, maintains job conditions today are worse than in 1991. He lists these reasons:
``Real wages remain virtually flat; the number of temporary workers is on the increase; and the average duration of unemployment continues to rise and remains at deep recession levels.''
The General Agreement on Tariffs and Trade was passed recently by both houses of Congress amid promises of a stronger economy with more jobs and more profits. But those promises don't apply to many unskilled workers.
It would be disingenuous of any free-trader to deny that GATT will export some American jobs. They will move abroad, simply because it is a principle of free trade that goods be produced where they can be made most efficiently.GATT certainly won't do a thing to stop that trend and it could intensify in the short run. That's the other side of GATT, a side overwhelmed by the enthusiasm attending the bill's passage in both House and Senate.
So, when you hear the news of a strong economy, and there's been plenty of it lately, think of those who are exceptions to the rule.
by CNB