As market boom shows sign of going bust, some 'haves' face joining the 'have-nots'

October 11, 1998|By MICHAEL OLESKER

THE LITTLE BOX in the corner of the TV screen showed the stock market falling like a safe thrown down a flight of stairs. The young lady at the Falls Road convenience store, earning $5.75 an hour, rang up a sale for coffee and an apple fritter and repeated the words -- "stock market?" -- as though speaking Upper Mongolian.

On television, the genius economic analysts, eyeing the plunging Dow, threw words about that could only occasionally be parsed in the English language: Hedge funds, they said, and all nodded sagely. Normal yield curve, they said. This prompted more wise nods in the television studio. German bonds, they said to a TV audience that, before the stock market boom now coming undone, wouldn't have known German bonds from Gary "U.S." Bonds.

"That's $1.73," said the young lady at the convenience store, ringing up the apple fritter and the coffee. She said she'd been working since 7 a.m. It was now going on 10. She'd risen in the darkness at 5: 30, when every instinct said to sleep in at these wages. She said her $5.75 an hour wasn't much, but there was talk of a promotion to assistant manager in a year or so. (It's what they do for young people in the workplace now, give 'em a title instead of any money.)

They're supposed to be happy simply to have a job -- and why not? In Western Maryland last week, Goodyear Tire & Rubber Co. announced it will close its Kelly-Springfield division headquarters and warehouse in Cumberland, eliminating about 400 mostly white-collar jobs.

"A big loss," William Donald Schaefer was saying at week's end. "A loss like that in one part of the state is a loss to the entire state."

The former governor knows about such things. Last week, Gov. Parris Glendening appointed Schaefer to a task force hoping to reverse the Western Maryland job losses.

Where do 400 people go when removed from their jobs? Where do they go when the great American economy begins to come undone? Where do they go when the state's unemployment rate is still a healthy 4.5 percent -- but it's 9 percent in Allegany County and 8 percent in Garrett County?

"The closing of this facility and loss of these jobs is a testament to the poor business climate that Parris Glendening has left the state in," said James Dornan, a spokesman for Republican gubernatorial challenger Ellen Sauerbrey.

Well, not exactly.

A new report by the U.S. Commerce Department says the number of jobs in Maryland grew 2.5 percent from 1996 to 1997 -- ranking the state 16th in the country, up from 38th, just behind Virginia.

But there are two American economies -- the haves and have-nots, with an enormous gap between them. And now, in the great money capitals of the world, the haves begin to worry about becoming have-nots.

On Thursday, the Dow fell 274 points before climbing back late in the day. The same day, the Nasdaq composite index, which measures many of the fastest-growing technology companies, dropped nearly 3 percent, its lowest closing price in 16 months.

On television, the great analysts of our time began dropping some of the technical terms to speak understandable English. Classic crisis of confidence, said one. All around nodded wisely. There is fear right now, said another. More wise nods.

When there is fear, and money tightens, jobs go away. In Western Maryland, Schaefer was saying last week, there is new hope with the Rocky Gap golf course opening next spring, expected to bring tourism to the area. But tourism depends on spendable income.

Schaefer remembered 12 years ago, when he was preparing to become governor and Kelly-Springfield was already hemorrhaging jobs. Schaefer and some of his economic aides went there and managed to stem the bleeding. But there are places, geographical and otherwise, that the great American economic boom never exactly reached.

In the last 15 years, while the earnings of college graduates rose 12 percent, wages for high school grads dropped 6 percent.

A year ago, said Labor Department figures, high-end workers averaged nearly $26 an hour, while low-end workers averaged $5.46. A typical poor family now pays an average of 60 percent of its income on rent and utilities, twice the government's "affordable" rate. More than 20 percent of all private-sector jobs are classified as "temporary" -- meaning no benefits.

"In Western Maryland," Schaefer was saying now, "they have no major industries. We put a prison out there because they wanted it. Most communities, they don't want prisons; they're worried about breakouts. They wanted it because it meant jobs."

Now, Western Maryland will have 400 fewer jobs. In Baltimore County, at a Falls Road convenience store, the young lady at the cash register handed over the coffee and the apple fritter. She makes $5.75 an hour and feels happy to be employed.

On the television, as the Dow dropped another notch, the deep economic thinkers were worried. They might have to discover how the other half gets by.

Pub Date: 10/11/98

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