US Economic Boom Takes Many Shapes
TUPELO, Miss. (AP) _ From the vantage point of northeast Mississippi, there are two very different economic booms in these heady days of coast-to-coast prosperity.
One yields fabulous and sometimes fickle fortunes to faraway bond traders, speculators and Internet entrepreneurs. The other is right down the block, along Tupelo’s no-frills Main Street, in the outlying malls and industrial parks, bringing low-key confidence and an abundance of modestly-paid jobs to a region whose elders still remember it as the poorest part of the poorest state.
People here don’t thank Wall Street or Washington for their boom. They consider it the reward for hustle and tenacity. Even as they benefit, they question if the good times are fairly shared and wonder how well they can weather an eventual downturn.
``The past four or five years have been good ones, but they haven’t been easy ones,″ says Jack Reed Jr., head of a clothing shop his family founded on Main Street in 1907. ``It’s taken a heck of a lot of hard work.″
Across America, the boom takes many shapes as it moves through its ninth astounding year. Salaries and housing prices skyrocket in Silicon Valley; charitable donations reach record highs, and jobless rates near record lows; the barbecue industry reports sizzling demand for backyard grills that cost thousands of dollars.
Some Americans feel left out _ on debt-burdened family farms, in inner-city slums, in back-road pockets of Appalachia. For millions of others, in Tupelos large and small in every state, the boom is tangible and welcome, but not cause for euphoria or cockiness.
``We’re not millionaires, but we’re comfortable,″ says Walter Partlow, a regional sales representative for a chain of electronics stores. He has helped his wife, Mary, open a self-service laundry in the black Tupelo neighborhood they recently left for a new subdivision.
``A lot of people say for our ages, we’ve done okay,″ says Partlow, 37. ``But it’s come from a lot of 12-hour days, six days a week.″
It is a boom of startling contrasts. In Tupelo’s Lee County, where employment has soared from 40,000 to 54,000 since 1990, many of the new jobs pay $7 to $10 an hour, whether in the flourishing furniture industry or at the city’s two Wal-Mart superstores.
At Silicon Valley’s high-tech firms, teen-age summer hires can make $20 an hour writing computer code, and the average annual wage of software engineers exceeds $90,000. The valley’s top 10 executives last year received $442 million, mostly from stock options. Intel Corp.’s CEO Craig R. Barrett alone earned $116.8 million.
``There’s a disconnect from Main Street to Wall Street as far as the enormous amount of money these CEOs and bond traders are making,″ says storeowner Reed. ``It’s two different worlds. On Main Street, in a family-owned business, there’s no opportunity to get a million-dollar stock option and cash it in.″
His store, known simply as Reed’s, has opened a branch at the new Barnes Crossing mall north of downtown, close to the Gap and Victoria’s Secret and across the street from a huge Wal-Mart with discount clothing prices below any Reed’s would ever offer.
Reed’s has registered record sales in each of the past three years, but profits dipped slightly last year. Its staff tries to offset rivals’ lower prices with neighborly charm, earning the title as friendliest store in the county two of the past three years.
But the strain of competing with national chains takes its toll. Reed wonders if his children should pursue another line of work, rather than battle to sustain the family tradition.
``Not everybody’s in the same boat,″ he said. ``As a country, we need to assess whether our economic system is running fairly as well as fast.″
The fairness of America’s longest-ever peacetime boom can be debated, but its breadth is undeniable. An estimated 80 million to 100 million Americans are now shareholders, riding the wave of rising stocks; even an economic trouble spot like Detroit has seen its jobless rate cut in half since 1992.
Prosperity stretches into every region and almost every business sector. Sales of recreational vehicles are at a 21-year high; annual sales of barbecue grills _ including gadgets-galore ``outdoor cooking systems″ priced at up to $10,000 _ have climbed in the decade from 11.5 million to 13.2 million.
``The backyard has become a major focal point of investment by families,″ says Donna Meyers, a spokeswoman for the Barbecue Industry Association. ``People save to buy a barbecue like they once saved to buy a family car.″
In eastern Massachusetts, high-technology companies have helped create a ring of wealth with Boston at its core. But north of the city, strict federal regulations designed to protect cod have devastated Gloucester’s fishing industry, forcing many fishermen to seek new occupations.
``They make good money, but they’re not working in Gloucester,″ says Angela Sanfilippo, head of the Fishermen’s Wives Association. ``They have to go to Boston and other places.″
In perennially poor eastern Kentucky, the town of Pikeville is bustling with new construction and new businesses. But 44 of the 49 counties in the rest of Appalachian Kentucky remain tagged as ``economically distressed″ because of high poverty and jobless rates.
The contrasts are even starker in Iowa, where farmers are missing out on a robust boom that has lowered the state jobless rate to 2.6 percent. Prices for grain, hogs and milk have plummeted, and State Agriculture Secretary Patty Judge estimates Iowa could lose 6,000 farm families by next year.
``The economy is booming, but farmers are definitely sitting and watching the boom and wondering what they did wrong,″ says Dianna Fuhrmeister. She and her husband, John, raise chickens, cattle and sheep on a small farm north of Iowa City.
Tupelo, population 38,000, had a destitute farm economy back when its most famous native son, Elvis Presley, was born in 1935.
Over the past 40 years, its civic leaders have relentlessly wooed investment, attracting a variety of mid-size manufacturers. A modern medical center, touted as the nation’s largest non-metropolitan hospital, employs 5,000 people.
Lee County’s jobless rate has sunk to 4 percent, below the national rate of 4.3 percent. Per capita income is nearly $22,000, under the national average of $26,412 but above the Mississippi’s $18,958 _ the lowest in the nation.
The region is now a hub of the upholstered furniture industry, spearheaded by Furniture Brands International. The company’s local work force is 3,700, with a $120 million payroll.
Mickey Holliman, the company’s CEO, is delighted by ``the awesome work ethic″ of his employees, though he doesn’t rule out the possibility that some local operations might depart for countries with cheaper labor.
Mary Werner, a former school teacher, came from Massachusetts with her husband in 1992 and rescued a smaller furniture company from near-death. In seven years, Tupelo Manufacturing, which makes chairs for schools, motels and nursing homes, has boosted its work force from 23 to 80 and its annual sales from $1 million to $5 million.
``A lot of it has to do with hard work,″ she says. But she is an avid fan of Mississippi’s business climate, saying taxes are lower and authorities more supportive than in Massachusetts.
``It’s the best state to do business in,″ she says. ``They really love business here.″
Such enthusiasm among executives is less prevalent on factory floors.
``The last three years have been very good years. There’s no denying that,″ says Thomas Palley, an economic analyst for the AFL-CIO in Washington. ``But there has been a general downsizing of expectations. We’ve gotten used to doing so badly that when there’s good news we say, ‘Wow, this is the best economy we’ve ever had,’ which is not the case.″
Even in mid-boom, Palley says, some companies are cutting back on health benefits and pension coverage, and many new jobs are low-paid service positions ``that kick away the ladder to the middle class.″
``Right now, too much is being allocated to shareholders’ profits,″ he says. ``We’ve got to ensure that everyone can share in this boom.″
The Rev. Robert Jamison, pastor of Tupelo’s New Providence Missionary Baptist Church and president of Lee County’s NAACP chapter, is another share-the-boom advocate.
``Tupelo is very prosperous, but the prosperity is one-sided,″ he tells a visitor to his red-brick church in Tupelo’s biggest black neighborhood, full of comfortable wood-frame homes formerly owned by whites.
``We do have some African-Americans who are prospering, but most are being left out of the big economic picture _ ownership and investment,″ Jamison says. ``Those things are not even being mentioned.″
Tupelo’s white leaders are savvy, he said, providing enough services and economic opportunities ``to keep down any agitation that would cause disturbances.″
``The only people not working now are those who don’t want to,″ Jamison adds. ``There are plenty of jobs, but most are minimum wage.
``Our kids have high ambitions. They want to be doctors, lawyers. They go away to school and they don’t want to come back here. That hurts. That’s why I tell white folks: We’ve got to open up things for everybody.″
Walter and Mary Partlow also want to see Tupelo’s prosperity spread more evenly into the black neighborhoods where their relatives live and where Mrs. Partlow runs the Park Hill Laundry.
``I’m sorry. I don’t feel it’s such a boom like they say it is,″ she says. ``This community is the last one on the totem pole. A lot of my customers are living check to check.″
Nationwide, the prosperity has produced a peculiar mix of problems, including labor shortages in many regions. In Wisconsin, for example, hundreds of European college students were recruited to work at tourist attractions this summer because local workers were scarce.
Ed Looney, executive director of New Jersey’s Council on Compulsive Gambling, says the perception of good times has worsened problem gambling.
``You might think people gamble more in desperate times,″ says Looney, himself a recovering compulsive gambler. ``But in a boom time, when people have excess money, they will try gambling.″
Steven Brobeck, executive director of the Consumer Federation of America, says credit card companies also are guilty of pushing people beyond their financial limits.
``There are a large number of families on the edge of a financial precipice,″ says Brobeck. ``The credit card companies are relentless... They have dramatically increased their marketing at a time when many families are trying to act with greater restraint.″
A different kind of boom problem has surfaced in Arizona, where a population explosion is generating record profits for homebuilders while unsettling environmentalists. Air pollution and gridlock plague Phoenix, a car-loving metropolis where one freeway is targeted for expansion to 12 lanes.
``You’ve got masses of homes and cars just jammed up everywhere, and now after all the homes are there, they are saying, ’Well, what should we do about traffic?″ complains Sandy Bahr of the local Sierra Club. ``You can plan well or plan fast. In Arizona’s case, we’ve done neither.″
Nationwide, the short-term future is debated inconclusively by pessimists and optimists. In Tupelo, where few folks feel they have speculated themselves out onto a limb, there is little sense of unease.
Aubrey Patterson is chairman and CEO of Tupelo-based BancorpSouth, a bank with 160 branches in Mississippi, Alabama and Tennessee whose assets have surged to $5.2 billion in four years. He sounds confident even while predicting some sort of slowdown soon.
``We’ve been on a spending spree in the past couple of years, with little increase in personal savings,″ he says. ``You can’t keep on like that.
``This region won’t be immune, but I think we’ll fare better than average in a downturn. A lot of companies say their most productive plants are here.″
Holliman, the furniture executive, is more optimistic. He believes the best days are still ahead for the nation _ and for Tupelo _if its workers stay ahead of the curve in education and training.
``I think the next five years are going to be absolutely terrific,″ he says. ``Some in the investment community say we’re in the ninth inning. I think we’re in the early innings.″