January 9, 2004

Commentary

Economy still in the doldrums

By Julianne Malveaux

Don’t believe the happy talk about the economy —unless you’re on Wall Street. New homes sales are up, business revenues are rising and any broker worth her salt is able to put a positive spin on the way things are. The Dow Jones Industrial Average has been ticking upwards and the NASDAG has revived itself from the mid-2002 doldrums.

But millions of folks are dizzy from the economy’s failure.

One in eight of all Americans lives below the poverty line. Poverty rose by 1.7 million in 2002, from a rate of 11.7 percent to a rate of 12.1 percent, according to the Census Bureau. There were 34.6 million poor people in the United States last year, and the number is likely to be rising. Median income dropped, too, from $42,900 to $42,409. The reduction seems small until you break it down.

Overall income dropped by 3 percent for African-Americans, down to $29,026. The poverty rate for African-Americans rose to 24.1 percent, which means that nearly one in four African-Americans lived in poverty in 2002.

Like black income, Hispanic income fell by 3 percent (to $33,100). The poverty rate among Hispanics was 21.8 percent.

Analysts are talking about the upswing in the economy, suggesting job numbers are “lagging” indicators that are likely to recover when stock markets do. Tell that to the people who are trying to live through recovery.

Nationally, President Bush’s request for $87 billion for Iraq crowds out money for social pending, for urban rebuilding and for education here at home.

At the state level, cuts in block grants from the federal government mean cuts in state services. Tuition costs for state schools are rising in the double digits, and state legislatures are cutting services for the poor, the elderly and the disabled.

At the local level, there is little more than trickle down, and the trickle comes drop by drop. Most cities struggle with hunger and home-lessness and now know that there are scant federal funds to apply to unmet needs, and many cities are having to cut back even on police and fire department.

The income and poverty data are just the tip of the iceberg.

Equally disturbing are data on the increasing number of Americans who lack heallth insurance. A year ago, 14.6 percent of the population lacked health insurance. Now, this is up to 15.2 percent —or 43.6 million people— who lack health insurance. Many lack health insurance because they have temporary or part-time jobs. Meanwhile, many health-related stocks are up.

The analysts are speaking of recovery, and poetry rates are rising.

Wall Street is fiddling while Main Street burns.

Julianne Malveaux, a Massachusetts Institute of Technology-trained economist, is author of several books, including “Wall Street, Mean Street and the Side Street: A Mad Economist Takes a Stroll” (Independent Publishers Group, 1999). She can be reached at pmproj@progressive.org.

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