How the Other Half Copes

More than 50 percent of Americans have no money in the stock market. You've read that many times, but usually it's stated the other way around: that almost half the country owns stocks, directly or indirectly through mutual or pension funds, and so it is that Wall Street and Main Street are said to be one. Nevertheless, a persistent criticism of those who write about money and business and the markets is that they spend all their time, and their ink, on those near the center of the market "revolution," ignoring those it has passed by. And in so doing (this indictment goes), they not only overlook stories that ought to be told, they fail to deliver the full narrative of how the new money culture has really changed America.

If you wanted to join in this particular critique, you could take as Exhibit A The New Gilded Age: The New Yorker Looks at the Culture of Affluence (Random House), a collection of pieces from The New Yorker published late last year (right around the time it was becoming clear that the "new gilded age" was unraveling). While many of these stories (Malcolm Gladwell on connectedness, Joan Didion on Martha Stewart) are quite good individually, they have a sort of grab-bag feeling taken together, and whatever was special about the 1990s isn't brought into focus but rather lost in the shuffle. Meanwhile, the dig is true: A great deal of time is spent either gaping at the lifestyles of the rich and successful or envying them. To be fair, "the culture of affluence" is all that this collection purports to address, but it's hard not to finish this book and wonder if there isn't something more to the picture.

Several new books, as it happens, do offer contrasting perspectives. Given the often adulatory tone of the financial press in general, it's something of a surprise to find that The Best Business Stories of the Year 2001 Edition (Pantheon/Vintage) is one of them. True, there's a glowing tribute to the investing prowess of Saudi Arabian super-investor Prince Alwaleed bin Talal, an awestruck look at the philanthropy of Bill Gates and a sympathetic catalogue of the complaints of the power-traveler set. But editors Andrew Leckey and Marshall Loeb have chosen as many pieces from Harper's as from The Wall Street Journal. There's a story from Rolling Stone on homelessness in Silicon Valley, and one from Mother Jones on private prisons.

Two pieces in particular address how the other half copes in the midst of a long economic boom. A Barbara Ehrenreich story (soon to be part of a book) focuses on the domestic service industry. Demand for cleaning help has risen, as you'd expect in a time of gushing prosperity; but that prosperity is a mere trickle by the time it reaches private household cleaners and servants, whose median annual income, Ehrenreich says, was $12,220 in 1998. Ehrenreich even spends some time in the employ of a service called Maids International, which offered an hourly rate of $6.63, although missing a day triggered a wage penalty that lowered the rate to $6, "a rule that weighed heavily on those with young children." Similarly, a Ms. article contends that even at "family friendly" companies, the most perks tend to go to those who need them least, while low-wage, less-skilled workers get stiffed not just on wages but on benefits offered to professional staff at the same firms. "Put another way," the story concludes, "some families seem to count more than others." (On the other hand, Ms. tries to convince us that "family-friendly policies help the bottom line" by citing a model example at Xerox— an argument that is undercut by the company's recent fortunes; it has lost several hundred million dollars in the last two quarters.)

This same general theme — the plight of "working families" — animates The Widening Gap: Why American Working Families Are in Jeopardy and What Can Be Done About It (Basic), by Jody Heymann of the Harvard University Center for Society. The result of a series of studies over a seven-year period during which some 7,500 "caregivers" were interviewed, the book focuses on how the "conditions" faced by low-wage working families affect their "health, development, and welfare."

The results are gloomy. A parade of low-wage workers describes the tightrope walk of addressing the inevitable demands and crises of caring for a family without jeopardizing jobs in which the workers' meager skills make them eminently expendable. In some cases these anecdotal lives offer pictures of distress as surreal as the excesses of the more familiar dot.com virtual mogul. Consider the woman dealing with caring for her terminally ill mother, who lives 150 miles away: "Robin worked 55 hours a week, 51 weeks a year, some evenings and weekends, just to earn $29,000. She had breast cancer herself." Or the one who leaves her son with a brother, just out of mental hospital, who "harbored tremendous anger."

At least some of these people, I suppose, make ends meet by racking up credit card debt, because a similarly downbeat collection of anecdotes fills much of Robert D. Manning's Credit Card Nation: The Consequences of America's Addiction to Credit (Basic). Manning, a sociology professor at Georgetown, says there are 157 million cardholders in the United States, with something like 1.5 billion cards, carrying some $600 billion in revolving debt as of 1999. (There's an especially mordant irony here: We have seen a record number of Americans driven into bankruptcy by their failure to grasp the most elementary notions of the hazards of high-interest revolving debt, right in the middle of the famous personal finance revolution.) Manning's hard-luck examples include working family members as well as the college students and elderly who are favorite targets of the card companies.

The trouble with anecdote-driven studies — and what makes them distinct from journalism — is that we get only one side of the tale. The teller is always presented as an upright, honest worker with a heart of gold, victimized by callous and unfair employers and other authority figures who never get to offer a rebuttal. It's not particularly difficult, in some cases, to wonder if some of these individuals aren't at least partly responsible for many of their own problems. This is especially true of Credit Card Nation, which asks for our sympathy, for instance, in the case of a college kid who compounded his debt problems with a spring break trip to London, because begging off the trip would have embarrassed him before his cosmopolitan pals.

Still, Heymann's book, at least, does make some persuasive points about the need for an increasingly affluent nation to grapple with the problems of its working poor. Her key contention is that both in public policy and in the workplace, many of our guiding assumptions are left over from a long-gone, pre-industrial America in which two parents working outside the home was a rarity, not a norm. Heymann takes as one example a school day that ends in the middle of the afternoon, creating a whole set of challenges for parents whose workday runs several hours beyond that time. Lately, more educators have proposed — as does Heymann — a lengthening of the school day (and school year) in order to ease the care-giving burden on working parents.

The nature and details of the shifts Heymann refers to -- America's journey from the pre-industrial frontier to today — are central to Colossus: How the Corporation Changed America (Broadway, $30), an excellent collection of readings pulled together by Jack Beatty, an Atlantic Monthly senior editor. The book also seeks, Beatty writes, "to give perspective to the debate over the corporation's place in the good society."

In the broadest terms, the corporation took off as a U.S. institution in the latter half of the 19th century, largely on the strength of the railroad boom. Railroads themselves made possible markets on a scale that made the most of the corporation's advantages. Mass production, a professional management class, market segmentation, corporate public relations, widespread stock ownership and the Organization Man all followed. So, too, did nagging concerns for the people that Theodore Roosevelt, quoted here by Beatty, referred to as "the crushable elements at the base of our present industrial structure."

Though its first section, dealing with the period before 1820, is likely to be of interest only to students of business history, the book is filled with insights and surprises, too many to deal with here. One of the several strands that Beatty traces prompts him to conclude that we have reached a phase in which more and more and is asked of the corporation; private companies are, for example, being pressed to make up for the decline of public funding for medical and other benefits that the authors above complain about — with disappointing results for medical consumers and private benefit providers alike. This probably says as much about our attitude toward government as it does about an apparent belief in the limitless capabilities of business. "Posterity," Beatty suggests, "may even wish we had asked the corporation to be less socially responsible."

And Beatty does not miss that this attitude runs counter to a more recent development in the evolution of the corporation. Owners (that is, shareholders) are exerting more and more pressure — on those same companies that limit benefits to unskilled workers, on those same banks that court more and more credit card customers, and on most every other sort of firm — to deliver profits at all costs. This leads Beatty to address the "democratization of ownership" that contributes to this pressure. After all, he points out, "nearly half the country" owns stocks these days.

A version of this review appeared in the March 4, 2001 issue of The Washington Post.