DECEMBER 29, 1997 / JANUARY 5, 1998 VOL. 150 NO. 28	2 0f 3
The Paradox of Prosperity	By Nancy Gibbs

What's new about the new economy is that it's scary all the time, not just in cycles. Globalization, for example, may be essential and inevitable and highly profitable, when free-trade policies push the share of exports and imports from 17% of our economy to nearly 25% over the past 20 years. Last week GM, which has lost market share to the Japanese, produced the first right-hand-drive Cadillac to be sold in Japan. But because the market is global, there is no longer even the illusion of control, of national boundaries, and that's what really frightens people. Factories in Karachi, Pakistan, can now produce shorts as quickly and cheaply as an American company in Quitman, Ga. U.S. manufacturers have hooked up computerized counters to sewing machines so they can monitor how quickly each seamstress joins two pieces of fabric. Not only does that give instant feedback on productivity, but the new, networked plant also cuts down on the number of supervisors on the cutting-room floor. New technology may be fueling gains in productivity, but that means many people are working harder than before, especially since their laptops and cell phones stretch the office all the way home. Car repairmen are carrying beepers; husbands and wives rise in the morning and log on to read their E-mail before they make the coffee; the TV in the neighborhood sports bar is tuned to cnbc, because the trading never stops. Americans are working 160 hours more each year than they did 20 years ago, moonlighting is on the rise and nearly half the respondents in one survey said they have less time for lunch. They stop at the back-rub store for five minutes to get some quick relief. They stop at the supermarket to pick up a precooked "home-meal replacement." Anxiety disorders affect more people than depression or substance abuse. "People were saying, 'As soon as things get good, I'm going to take some time off,'" says pollster Celinda Lake. "And now they say, 'Oh, my God, things have gotten as good as they can get, and I can't take time off or stop that second job.'" The National Association of Colleges and Employers reports that the class of '98 has the rosiest economic prospects in a decade; but even graduating seniors at the most prestigious universities are risk averse, very conservative in their career choices, as though the ground could shift at any minute. "There used to be much more willingness to take chances in choosing what to major in or what profession to pursue," says Yale historian Stephen Lassonde. "Now everyone wants to go straight into a consulting job the day after graduation. That way they know they'll have a job and can start paying off their loans, and their parents won't accuse them of wasting their time after spending all this money on this credential." As college becomes harder to afford, students realize they can't afford not to go: this economy pries open the gap in prospects for those with a college degree and those without. The average ceo of a large company now earns 200 times more than the average worker, up from a 40-fold difference in the 1970s, according to trend watcher and author Gerald Celente. And for those who drop out, the options for unskilled workers keep shrinking, as does the safety net beneath them if they fall out of the economy altogether. That too represents an enormous psychological change from the 1950s. In the postwar boom, there was general agreement about shoring up the New Deal institutions that promised to protect people if there were another economic earthquake. That consensus was carried into the expansion of the 1960s but then rolled back in the 1980s. "Most people may want to see welfare reformed," says Mitchell, "but a by-product of that is the widespread notion now that you're on your own. The old social contract that there will be help in bad times is disappearing."

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