Snapshots of Hard Times
Oct 13th, 2008 at 9:45 am by Susie
The underground economy is feeling the pain:
The severity of the downturn can also be seen beyond the legal edges of the economy. On a recent Sunday afternoon on Jefferson Avenue, in Detroit’s notorious East Jefferson neighborhood, Joe, 37, is dressed in street-business casual: a white Adidas T-shirt, gray stonewashed jeans, white Adidas sneakers and a black do-rag. But the tattered state of his attire is a telltale sign that sales are down at his corner drug business, where he waits anxiously for today’s payday to come from across Alter Road. Three blocks to the north, the boarded-up storefronts and treeless sidewalks here give way to a leafy, boutique-strewn lane of Jefferson Avenue in Grosse Pointe, the wealthy suburb that is home to many of the top engineers and executives of the American auto industry. They have been some of Joe’s most profitable customers over the years. “When a white person come across Alter Road, they might spend $100 at a time,” explains Joe, “whereas round here, people only looking for dimes and nicks [$10 and $5 bags].”
Over the past year, Joe’s big buyers from the suburbs have been cutting back. Like everyone else in the Motor City, Joe has felt the impact of losses at Ford, General Motors and Chrysler. “As goes the Big Three, so go Detroit, and I mean everybody,” says Joe. He grew up on welfare, and admits to being “knee deep in the drug game” since he was 15 years old, but he complains that he is even less shielded from the economic crisis as a part of the illegal and informal economy. He says he has been struggling to make child support payments for two kids. “At least the autoworkers get memberships to Sam’s Club and Costco. We have to buy our Pampers at the corner store for $17!”
Detroit has the highest poverty rate of any American city at 33.8 percent, with many blocks boasting only a lone house surrounded by fields of overgrown weeds. Watching the cars pass by, Joe eyes a yellow BMW. “Right there! That dude spent about $300 last week right here on this corner,” he declares. “But he didn’t come round last weekend like he normally do. You know he’s thinking, ‘I can’t be blowing money now. I might lose my job.’”
Economists across the board agree that this decade has been nothing like the 1990s, which saw sustained, healthy economic growth at most levels. Still, Rea S. Hederman Jr., an economist at the conservative Heritage Foundation, seeks to paint a less bleak picture when it comes to the plight of the working class. He notes that consumption inequality has increased far more slowly than income inequality, as more and more people at the bottom of the economic ladder own cellphones, dishwashers and microwaves. Hederman, preferring the term “pro-growth” to “trickle down” economics, also points to a long streak of positive job growth numbers from August 2003 to January 2008.
Exactly how ancient is Mr. Hederman?
he doesn’t seem to realize that cell phones have become a necessity for most people, not a luxury. Or that you can get them REALLY cheap, contract or no. He doesn’t seem to realize that you can buy a new dishwasher for less than $200 at home depot, and for much cheaper on craigslist (used). Microwaves? less than $50.00 at Walmart.
This guy is stuck in the past, when dishwashers and microwaves were new-fangled, big-ticket items, and cell phones were the size of cinderblocks. you would think that Hederman’s so old, he probably thinks John McCain is young, but more likely he’s just stupid and privileged.