News Release

Holes in New Report of Economic Growth: Analysts Point to Big Gaps in Prosperity


Despite new figures showing rapid growth in the U.S. economy, some economists said Friday afternoon that many Americans are not getting much benefit from the nation’s overall prosperity.

While the Commerce Department has just reported that the economy grew at an annual rate of 6.1 percent during the final quarter of 1998, independent economists cautioned that — despite a hefty boost in the U.S. gross domestic product — huge gaps exist in Americans’ economic well-being.

The following economists are available for interviews:

Pollin, a professor of economics at the University of Massachusetts at Amherst, said Friday: “The demand for soup kitchens and homeless shelters has increased dramatically. What this reflects is the declining value of the minimum wage and the increased difficulties faced by low-wage workers. Despite the fact that these people have jobs, they have not shared in the economic growth.”

An economist based in Washington, D.C., Malveaux commented: “While the overall unemployment rate is 4.3 percent, the rate for African-Americans is nearly 9 percent. Companies like Levi Strauss and Bank of America are posting layoffs. This is clearly a bifurcated prosperity.”

“All growth is not equal,” said Ginsburg, research director of the Midwest Center for Labor Research based in Chicago. “The current economic expansion has a dark side. In the past five years, nearly 50 percent of the jobs created paid less than the federal poverty level for a family of four. According to the Bureau of Labor Statistics, only two-thirds of the people laid off in the last few years in the recurring waves of downsizing are back in full-time jobs. Of those lucky enough to get full-time jobs, nearly half earn less than they did before. This is why the income gap is increasing. That is why real wages have not risen above the level in the late ’70s and that is why the number of poor and homeless in this country continues to grow.”

Wolff is a professor of economics at New York University.

Williams is an economist and associate professor of Afro-American studies at the University of Maryland.

For more information, contact the Institute for Public Accuracy: (202) 347-0020, (415) 552-5378