After a week of rain, Manhattan is starting to resemble a waterlogged Emerald City, and the natives are getting restless. Green, as in shoots, also seems to be the color of choice among economists this spring, and the stock market has responded with gusto, up 30 percent from its Death Valley bottom in early March.
The decline in equity prices has exacted a terrible toll on endowments and individual investors alike, dealing a double blow to nonprofits. So a rebound in stock prices is welcome news. But is the rally sustainable? And is it a sign the economy itself is on the road to recovery?
No, writes New York Times columnist Bob Herbert in today's paper ("Far From Over," May 9, 2009), quite the opposite. "The economy," he says, "is in shambles. Nearly 540,000 jobs were lost in April, a horrifying number. The unemployment rate rose to 8.9 percent," and is expected to hit double digits by the end of the year. Yes, the rate slowed some in April, thanks in part to 72,000 mostly part-time Census Bureau jobs added by the government. But job losses in February and March were revised upward, from 651,000 and 663,000 to 681,000 and 699,000, respectively. Yikes.
As the nonprofit sector knows all too well, rising joblessness is also causing poverty and homelessness to increase. According to the Economic Policy Institute, the poverty rate is in danger of increasing from 18 percent, the 2007 figure, to 27.3 percent by 2010. And the rate for black children -- an already appalling 34.5 percent -- could go to 50 percent if the "official" unemployment rate rises to 10 percent, as expected.
"Joblessness is like a cancer," Herbert writes.
The last thing in the world you want is for it to metastasize. And that's what's happening now. Don't tell me about the stock market. Don't tell me about the banks and their perpetual flimflammery. Tell me whether poor and middle-income families can find work. If they can't the country's in trouble....
Herbert is right, of course, and outside the precincts of Wall Street and affluent communities where a million dollars is just a down payment on a third home, people are scared. Scared that they'll lose their jobs, their homes, their hopes for the future. The question is, What are we going to do about it?
-- Mitch Nauffts