Work

Parsing prosperity

by Ben Geman

America's economic boom is actually starting to help most working people, but distribution of the good times' plenty remains uneven. In this red-hot economy, many families are working longer hours and piling up more debt.

That's the message from the liberal Economic Policy Institute in Washington, DC, which released the latest version of its report State of Working America over Labor Day weekend. EPI's broad study of wealth and wage indicators shows wage growth across the income spectrum in recent years. After years of decline, median wages grew 7.3 percent between 1995 and 1999, while workers at lower incomes saw even sharper wage increases. The authors of the report, which comes out once every two years, attribute the gains to a tight labor market, higher productivity, and mid-1990s increases in the minimum wage.

But serious problems remain. Despite the boom, child poverty is still alarmingly high -- 18.9 percent in 1998, not far below the figure of 19.6 percent in 1989. And although family incomes are growing, much of the increase is attributable to longer work hours: middle-class families in 1998 worked an average of over 180 more hours per week than they did about a decade ago. Meanwhile, income inequality continues to rise in the United States, albeit more slowly than earlier in the decade.

"I would say it's a mixed picture, leaning towards good," says Jared Bernstein, an economist with EPI and co-author of the report. "Working families are clearly better off than they were four or five years ago. But they are working harder . . . and for those at the middle and at the lower end of the income scale, the stock-market boom has largely passed them by, and meanwhile, they have accumulated more debt."