NFG Jobs Toolbox. Chapter 1: Introduction

NFG Jobs Toolbox: A Funder's Guide to Jobs

Why Think About Jobs During an Economic Boom?

At first glance, an expanded commitment to jobs seems to come at an unusual time. These are heady days for the American economy. According to the nation's top economic official, the Federal Reserve's Alan Greenspan, the domestic economy is performing at its highest level in at least 50 years.¹ And even this bold assessment is restrained in comparison to a 1998 Fortune article which argued that the U.S. economy is stronger than it has ever been at any time in its history.²

These claims of economic prosperity seem to hold a measure of truth, at least in the aggregate. Monthly unemployment tallies are at a 25-year low, maintaining levels below five percent for the first time since 1973. Inflation indicators are also stable or even declining. Moreover, the combined rate of unemployment and inflation - known as the misery index - is at its lowest point since the 1960s. Consumer confidence in the economy is now at a 29-year high.

Statistics for job growth and stock market activity tell a similar story, with a record 13.5 million new jobs created since the last recession of the early 1990s and record gains in the Dow Jones Industrial Average. Key sectors such as construction and automotive manufacturing have rebounded from the last economic downturn, while the trade deficit has dropped and federal deficit spending has been eliminated.

Yet even with this remarkable growth, few jobs are available for poor and under-skilled individuals. This employment gap is particularly severe, and growing, in inner cities and poor rural areas with high unemployment and entrenched poverty. The "Jekyll and Hyde" economy, as some have called it, is destined to become worse for the nation's lowest income citizens as welfare reform policies move millions of new job seekers into the low-wage workforce.³ These job seekers must compete not only with working poor families, themselves on the brink of requiring welfare assistance, but also with other welfare recipients already in the labor market. And competition for jobs will only increase with the next downturn in the economy.

The next section paints a quick portrait of the jobs issue. It is organized into two sections:

Economic dimensions of employment issues; and
Significant recent public policy changes and their impact on jobs.

¹ Richard Stevenson, "Fed Chief Calls the Economy One of the Best He Has Seen," New York Times, June 11, 1998.
² Kim Clark, "These Are the Good Old Days," Fortune, June 9, 1997.
³ Louis Uchitelle, "Economic Data Sending Conflicting Signals," New York Times, June 12, 1996.

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