Recovery Trickles Down Very Slowly

Finances Improve for People Who Already Have Jobs, Money

Washington Post
By Jonathan Weisman
Friday, January 16, 2004


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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."


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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.


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