Vital Signs

Globalization and the Decline of the Family

By many important indicators, the American economy is soaring. Unemployment has hit a 30-year low, and productivity is on the rise. These two factors, combined with low inflation, have finally started to push up real wages for most workers. Yet below the surface, conditions are not so encouraging on the economic front and even less so on the broader social-cultural front. As "globalization" increases the pressure on the U.S. economy, the American family is feeling the strain. And as the family fails, the culture implodes.

The pay of the typical worker in mid-1998 was still not as high as it was in 1989, the year of the last business-cycle peak. When the business cycle next turns, the average American worker may find he has not gained much from the seven "fat years" of the 1990's. This is particularly true for men. The wage of the median male has fallen 0.5 percent per year since 1989. Most of the loss was during the 1989-96 period, when the median male wage fell 1.1 percent annually. Strong growth in the last two years has helped low-wage male workers regain some of the ground lost, but their annual income from wages in the first half of 1998 was still about $1,000 below that of 1989. And it should be remembered that wages in 1989 were lower than in 1979, having fallen an average of 0.2 percent per year during the 1980's.

The wage of the median female worker, which rose consistently during the...

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