January 16, 2004
W's jobless recovery
Cathy Wyatt is putting the finishing touches on her trendy coffee shop, Carpe Diem, opened just eight weeks ago. She is paying meticulous attention to her upscale clientele, complete with offering hard-boiled eggs marked for the Atkins-conscious crowd.Posted by Norwood at January 16, 2004 07:38 AMIt may not fit with northeastern Ohio's hardscrabble image, but, she said, industrial Canton's old downtown is in a bit of a renaissance. "It's nothing for people to spend three and six dollars a day on their coffee," Wyatt said.
Just around the corner, however, the Stark County Department of Job and Family Services waiting room is standing room only. In the lobby, escaping the cold snowfall outside, a forlorn Monique Simmons, 21, waited for her ride, baby asleep at her feet.
"I've been looking for a job for two years," she said, recounting her last work at a local telemarketing firm, a job she left and now can't get back. "It's always, 'We'll get back to you.' I just hear a lot of excuses."
The contrast between the pulse Canton's economy is starting to feel on the high end and the stagnation painfully evident in the lower tiers points out a significant national trend: After three years of fits and starts, the economy is revving back to life, but at least so far, its fruits have gone mainly to those who least need them.
"If you have investments already, and if you have a job already, the last 12 to 18 months have been very nice to you," said Gary Burtless, a labor economist at the Brookings Institution. "The stock market has done well. You can refinance your mortgage. You can finance your new cars at very favorable rates, and prices haven't been rising.
"But if you are looking for a new job or had the misfortune of losing a job, for those folks, life is much, much tougher. It's just so damned hard to get employment."
......Nationally, the two-tiered economic gains appear to be playing out on a grand scale. Holiday sales at Neiman Marcus department stores were up nearly 13 percent over the holidays compared with the previous year. Tiffany's sales jumped 16 percent, as the affluent rewarded themselves for their upturn. Dana Telsey, chief retail analyst at Bear, Stearns & Co., calls it "self-gifting."
Yet Wal-Mart, which serves a less glamorous clientele, posted gains of only 3.9 percent, barely meeting analysts' expectations.
On Wall Street, bonuses will be up 20 to 30 percent from last year, according to industry experts. Alan G. Hevesi, the New York state comptroller, recently said he expects Wall Street bonuses to total $10.7 billion for 2003, an average of $66,800 per employee.
But for hourly workers elsewhere, average wages last year rose by 26 cents, or 1.7 percent, the Labor Department said last week.
The Dow Jones industrial average rose 25 percent in 2003, a boon to those with investments. At the same time, consumer debt such as credit cards and auto loans hit a record $1.98 trillion in October, $18,700 per household, the Federal Reserve reported this month. The number of past-due credit card accounts rose to an all-time high of 4.09 percent from July through September, according to the American Bankers Association.
The number of personal bankruptcies during the 12 months ending Sept. 30, 2003, rose to 1.66 million, up 7.4 percent from the 1.54 million filings in fiscal year 2002 and another record.
The economy grew at a remarkable 8.3 percent annual rate in the third quarter of 2003, but by October, there were 2.8 unemployed people for every job opening, up from 2.51 a year earlier and 2.25 in 2001, according to the Economic Policy Institute. Unemployment rates for managers and professionals stayed steady last year, at just under 3 percent.
But jobless rates have risen steadily for lower-paid service occupations, from 6.4 percent in 2001 to 6.6 percent in 2002 to 7 percent last year. Unemployment in production and transportation jobs finished the year at 7.2 percent.
......"We used to have a middle class in this country, a blue-collar worker," Larry Shade lamented. "Now, those blue-collar workers are working fast food. There is no middle anymore."
