The Economy: Who Is Hurting and Who Is Not

The woes of inflation and stagnation have touched nearly every American, but while some people are only slightly bruised, others feel as if they have gone ten rounds with George Foreman and are down for the count.

The depression in the housing industry has had a double effect. Many people who want to buy a house now find that it is either beyond their means or they cannot find a mortgage for it. The median price of new houses in the U.S. has jumped to some $35,500, and mortgage rates now hover near 10%. Construction workers, from carpenters to lumberjacks, find that jobs are becoming scarcer every day. The situation is acute in what was one of the fastest-growing counties in the nation during the late 1960s and early 1970s. In New York's exurban Suffolk County, 40% of construction workers are out of a job.

Some states and some cities, like some people, are hurting more than others. Michigan has been particularly hurt by the auto slowdown; in Flint, a big builder of Buicks and Chevrolets, the unemployment rate is more than 14%. Delaware, California and New Jersey have also been clobbered, with the inner cities hit worst of all. "In the spring it took 15 minutes to get your unemployment check and get out," says Charles Johnston, an out-of-work carpenter in Trenton. "Now it takes from an hour to an hour and a half." The South still has a lower unemployment rate than most other regions, but lately its economic barometers have been falling faster than the national average. One reason: the South still "imports" much capital from the North—and the capital is scarce and staying close to home.

Everywhere, jobs are harder and harder to come by. "When something opens up, we all descend like locusts on the company that's hiring," says Bostonian Judy Knight, who lost her job as a staff producer with Atlantic Records last December. "The company ends up getting the pick of the best." When 100 jobs opened recently for firemen in Los Angeles, 1,000 applicants showed up.

The worst off, as always, are the poor and the blacks in ghettos. Unemployment among blacks—as usual much higher than among whites—is 9.8%, compared with 9.2% in 1973. Prices of the foods that the poor depend on have risen far faster than the consumer index as a whole in the past year. Rice is up 90%, sugar 132%, bread 27% and milk 20%. The aged on fixed incomes are often devastated. "I walk into the supermarket, pick up a few oranges and lemons—and then count my money to see if I have enough," says Leah Binder, a 72-year-old Los Angeles widow.

The fall in the stock market has hit brokers with all the force of the potato famine, while many middle managers, in the 40-plus age bracket and the $25,000-to-$40,000 income bracket, are among the first to be squeezed out when their companies are in trouble. A younger man, their bosses believe, can do much the same work for half the pay.