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New Dollars and Dreams, The

New Dollars and Dreams, The: American Incomes in the Late 1990s

Foreword by Nicholas Lemann
Copyright Date: 1998
Published by: Russell Sage Foundation
Pages: 264
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  • Book Info
    New Dollars and Dreams, The
    Book Description:

    Foreword by Nicholas Lemann

    "A brilliant book that both clarifies and explains the seemingly contradictory trends of a booming economy, wage stagnation, and growing income inequality." -Thomas B. Edsall, author,The New Politics of Inequalityand political reporter atThe Washington Post

    More than a decade ago, Frank Levy's classicDollars and Dreamsoffered an incisive analysis of the dramatic changes then taking place in the American standard of living. As wage stagnation and rising income inequality in the 1970s and early 80s began to undermine Americans' traditional economic optimism, Levy's book provided the first diagnosis of what he called the quiet depression. Since then, the U.S. economy has made a dramatic comeback, but economic insecurity remains widespread. New technologies, increased immigration, and global competition have opened up a new economic playing field, one with new rules and new winners and losers.The New Dollars and Dreamsexplores this puzzling economic landscape, in which low unemployment goes hand in hand with sluggish wage growth and high income inequality. This completely revised and expanded version of Levy's original book offers an invaluable guide to the sweeping economic, social, and political changes that have remade life in the United States over the past twenty-five years.

    Levy tells a fascinating and insightful story about what happened to American incomes and jobs. His plot resists the simple truths of everyday journalism, and explains the economic and political twists and turns that have shaped the current American economy-including the oil and food price inflations of the 1970s, the market deregulations and corporate downsizings of the 1980s, the emergence of women as sole breadwinners in many families, the migration of jobs to the suburbs, and the computerization of work.The New Dollars and Dreamsilluminates the key sources of inequality, with chapters that examine the disparate employment progress of whites, minorities, men, and women, and it carefully investigates the claim that the concentration of very high incomes is the result of a winner-take-all economy. Although the growth of the service economy is often blamed for inequality, Levy locates a more fundamental cause in the rising educational and skill demands brought about by restructuring of work in all sectors of the economy. An important part of the story also involves the transformation of the American family from extended and two-parent households to those headed by single mothers and lone individuals. By making sense of these complex trends,The New Dollars and Dreamsoffers crucial insights into why, despite a thriving economy, many Americans no longer feel secure in their financial futures.

    A Volume in the Russell Sage Foundation Census Series

    eISBN: 978-1-61044-354-8
    Subjects: Economics, Business, Sociology

Table of Contents

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  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Foreword
    (pp. ix-x)
    Nicholas Lemann

    To someone who is informed but not a professional, there is nothing more maddening than trying to make sense out of the debate on the state of the American economy. How rosy is the picture? How concerned should we be about the rise in inequality? Did things used to be better for the average American than they are now? Are all the good jobs going overseas? Can the government do anything that would help people move up economically? On all of these questions, and many more, one encounters a welter of conflicting claims, based on competing and supposedly scientific studies...

  4. Acknowledgments
    (pp. xi-xiv)
    Frank Levy
  5. CHAPTER 1 A Half Century of Incomes
    (pp. 1-7)

    Writing about an economy is like writing about a river. The backdrop is the motion, a constant evolution with no beginning or end. The stories mix human effort and impersonal forces, sometimes working together, sometimes in opposition.

    The chapters that follow trace the development of American incomes from the end of World War II through the late 1990s. During this time, our broadest economic goals have remained unchanged: a shared prosperity, the opportunity to progress over a career, the opportunity for our children to do better than we have done. In some decades, the economy has largely delivered these goals....

  6. CHAPTER 2 Beginning Again: The U.S. Economy in the Late 1940s
    (pp. 8-24)

    To some of us, 1947 was not so long ago. World War II had ended, wartime rationing had been lifted, F. D. R. had died, and Harry Truman was president. It is a time that merges in the memory with the 1950s and early 1960s. Between 1947 and 1960, however, the nation covered enormous ground. In this chapter, we begin our story by describing the economy and the income distribution as they looked in the late 1940s.

    Depending on the times, we measure our incomes against any of three standards: subsistence, other people’s incomes,* or incomes of the recent past....

  7. CHAPTER 3 Economic Change, Government Policy, and the Evolution of Living Standards
    (pp. 25-56)

    By the end of World War II, the nation had lived through seventeen years of putting material aspirations on the shelf.¹ During the Great Depression, there was no income. During the war, income returned, but there were no consumer goods. The experience left us ambivalent.

    We had high hopes for the postwar economy, but we also had a sense of foreboding. If a Great Depression could happen once, it could happen again, especially since war production was ending. Depression was not the only danger. When the government relaxed wartime wage and price controls, producers quickly pushed up prices and labor...

  8. CHAPTER 4 Industrial Change: Is There Life After the Service Sector?
    (pp. 57-76)

    For two decades, the most durable economic sound bite has been the nation’s shift to a service economy. Of the three economic stories that opened chapter 1, two were problems—the slow growth of wages and the high level of inequality. The shift of employment to the service sector has been blamed for both.¹ Sound bites leave out too much information. Recall that as early as 1947 more than half of all hours of employment were already in service sector industries (chapter 2). Despite the service sector’s already large size, the 1950s and 1960s were a kind of golden age...

  9. CHAPTER 5 Occupational Change: Can the Economy Still Produce Good Jobs and, If So, Who Gets Them?
    (pp. 77-125)

    In chapter 4, we began our analysis of the job market by examining the economy’s industrial structure. It was a safe choice. While we do not often say it, we believe that in fifty years the U.S. economy still will have industries. Whether these industries will provide good jobs, even for educated workers, is a separate question and a source of some anxiety.

    In this chapter, we examine trends in American jobs since World War II—the nature of the work, how much a job pays, the job’s security. We will look at the progress of different groups—for example,...

  10. CHAPTER 6 The Geography of Income
    (pp. 126-146)

    In the spring of 1986, the Massachusetts unemployment rate averaged 3.8 percent. “Things were so tight,” recalled one bank administrator, “that we were negotiating educational benefits for the spouses of people we were recruiting.” In the same year, New York City regained its fiscal autonomy from the state-created Municipal Assistance Corporation. Nevertheless, it was not spring everywhere. In the center of the country, the Great Lakes states had suddenly become “the Rust Belt.” In Texas, the governor required state agencies to cut budgets as an austerity measure. In Lafayette, Louisiana, families, suddenly unemployed, walked away from recently purchased homes.


  11. CHAPTER 7 Households, Families, and the Welfare State
    (pp. 147-186)

    In earlier chapters, we discussed the variation in incomes across regions, educational levels, race, and industry. Income differences across family types—two-earner families, elderly families, female-headed families—are often larger and they raise a note of caution in our analysis. We are using the family income distribution as one way to summarize the economy’s performance. In reality, however, the distribution is being reshaped by changing living arrangements as well as by the economy, and we have to take that fact into consideration. The same caution applies to thehouseholdincome distribution, which accounts for both families and all other living...

  12. CHAPTER 8 What Comes Next?
    (pp. 187-197)

    To this point, our twenty-year experiment with free markets has produced the three economic stories that opened this book: the outstanding performance in inflation and unemployment, the continued slow growth of wages, and high levels of inequality. Through the spring of 1998, the first story dominated public opinion. In one recent national poll, 53 percent of respondents said the nation is generally heading in the right direction. Sixty-four percent of respondents expect their children’s generation to enjoy a higher standard of living than the current generation. While 56 percent of respondents said that the rich do not pay their fair...

  13. Appendix
    (pp. 198-210)
  14. Notes
    (pp. 211-220)
  15. References
    (pp. 221-236)
  16. Index
    (pp. 237-248)
  17. Back Matter
    (pp. 249-249)