The age of anxiety: erosion of the American dream.

AuthorWhalen, Charles J.

IN HIS 1996 State of the Union address, Pres. Clinton remarked that we live in an Age of Possibility. For most Americans, however, today is the Age of Anxiety American Dream is in crisis. The 25-year Age of Prosperity that followed World War II has been replaced by an equally long period of rising economic insecurity for middle-class Americans.

Conventional measures indicate the U.S. economy is strong. Unemployment and inflation are low, while profits and output have been growing steadily for the past three years. Nevertheless, the middle class is not optimistic. According to a survey conducted in the winter of 1994-95 for U.S. News and World Report, 57% of those asked said the American Dream is out of reach for most families, and more than two-thirds were worried that their children will not live as well as they do.

The middle class has good reason to feel uneasy. In today's economy, most working families can not distinguish recession from recovery. Beneath the misleading surface prosperity are numerous alarming trends:

Relentless downsizing. Since 1978, America's largest 100 companies have reduced employment by 22%. More than 1,000,000 workers have been laid off each year during the 1990s--about half from large private-sector firms. In January, 1996, alone, nearly 100,000 job cuts were announced. Today, one in three American families fears job loss in the near future.

Permanent job separation. Unemployment in earlier decades often was cyclical and temporary. Jobs lost to downsizing and restructuring, though, are permanent and frequently come despite strong corporate earning, as is the case at both AT&T and Mobil. Moreover, professional and managerial workers no longer are immune--these categories accounted for about one-quarter of all layoffs in the 1991-93 period, approximately doubel their share from the early 1980s. Of the 2,000 AT&T employees dismissed in January, 1996, 60% were managers.

Longer jobs searches and sluggish job creation. The average duration for a job search in 1995 was 2.5 months. A decade agol, it took 1.5 months; in 1967, 2.5 weeks. Pres. Clinton often talks about the 8,000,000 new jobs created since he entered the White House, but the pace of job creation has been approximately 40% below the level of America's two previous expansions.

Declining fortunes. According to a report by the U.S. Census Bureau, workers losing jobs recently have seen their wages drop an average of more than 20% upon regaining full-time work. A 1994 Department of Labor study found that less than one of three displaced workers returns to full-time employment with equal or higher pay. Research by the Federal Reserve Bank of Chicago, meanwhile, indicates that many affected workers never will see a return to their previous income levels.

Explosive growth in contingent work. Part-time and temporary employment--"contingent" work--have been increasing much faster than the over-all rate of job growth since 1970. In the period 1970-90, total U.S. employment grew by less than 54%, but the number of persons working part time, yet preferring a full-time job, rose 121%, and the number of temporary workers increased 210%. Jobs provided through temporary employment agencies such as Manpower, Inc.--now the nation's second-largest employer--account for about 15% of all employment today. In contrast, during the period 1982-90, temporary agencies accounted for less than five percent of all jobs created.

Wage...

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