Down the Up Escalator

by Barbara Garson

“Then yes,” Cleavon said, laughing, “because I recovered. We started to be like real citizens. We got a taste of what it was to pay bills, to have money in your pocket.”

  “Yeah, it feels good,” José agreed.

  When I asked if they saved any of the temporary windfall, they both answered by describing how they were now helping their families. José talked about paying his mother’s rent. Cleavon spoke about his children’s Catholic school tuition and his sister in college. “Everybody is eating now,” Cleavon said. “My wife says, ‘You know, you’re the number one son right now.’ I’ll have to break the news to them when ARRA stops,” he ended wistfully.

  Though they hadn’t really answered my question, I surmise that for good or for bad just about all of their ARRA earnings flow directly from their pockets into the consumer economy. Indeed one of the advantages they cited of ARRA jobs was that they paid weekly instead of biweekly.

  “Before this job,” said José, “I used to be a porter near Avenue B. I had nine buildings, and it paid me minimum wage. Like seven twenty-five an hour. They took me on like full-time, but they didn’t tell me that it was temporary. After a couple of months they started giving me days off and more days off. I’m asking them, ‘Is it my work?’ But actually, it was because they only needed a weekend porter. Some weeks it was a $50 check. That wasn’t enough, because I got …”

  “We got families, responsibilities,” Cleavon said, finishing José’s thought.

  “So I had to quit.”

  After that José was hired on a house renovation. That also paid minimum wage, but the boss was nice and taught him some carpentry skills. But the renovation was soon finished. Then a friend of the family’s showed José a flyer about the community group that offered GED and job training, and he registered.

  Cleavon, by contrast, had had a longtime, steady job with a private sanitation company. “I decided to give it up after twenty years. It was outside in the weather, and it was having its effect on my body. I decided to take a different turn of direction, go to school, take a trade. This is why I choose to learn this trade of ‘going green.’ ”

  “Going green slash carpentry,” José said, carefully stating their current occupational designation.

  José and Cleavon both earned GEDs and were both among the few accepted into the community group’s internship program at $8 an hour. They were among an even more select group taken onto the weatherization staff.

  “We learned a lot,” Cleavon said.

  “We learned too much,” José interjected.

  “They pay us for using our brains,” Cleavon continued. “We do a lot of physical work, but we also got to always figure out how to do things easier. ‘Work smarter, not harder.’ ”

  “I suppose you have to use your brains to get into some of these apartments,” I said, fishing.

  “And your charisma and personality,” Cleavon responded with a dapper smile.

  “You must have to keep lists of the appointments you make and the way different tenants responded when you knocked on their doors.” I was still hoping for gossip about my neighbors. But the fellas didn’t bite either.

  “Yes, paperwork is very essential,” Cleavon explained. “If you don’t have the paperwork correct …”

  “Then it’s like you haven’t even done the job,” José said, completing what must have been a maxim of their training. “Remember the first week,” José said to Cleavon. “Everyone said, ‘Not yet. Let them do the physical work, but don’t let them touch the paperwork.’

  But Tracy, she showed us and let us actually do the paperwork from the first. Tracy, she taught us the ropes.”

  “This crew, we’re like family,” Cleavon said.

  “We are family,” José said, making it stronger. “We see each other every day; we help each other. Staff is family.”

  When the community group hired people directly, it sent us a multicultural team that looked like the squad room on a NYC cop show. But it also subcontracted work to profit-making companies. These minority-owned businesses tended to be monocultural, though serially diverse. We had a team of Russian electricians who installed fixtures. They generally answered tenant queries by saying, “You ask super.” The Russians were replaced by a team of Mesoamericans who spoke less English but managed to communicate benevolence.

  I had the most contact with the West Indian heating crew because I have a work space above the heat return lines and the building was getting brand-new oil burners. We would soon have hot water instead of steam circulating in our pipes.

  One day one of the heating men asked if I knew how to locate the person who rented a room that was always locked. Their clipboard guy, a trim, confidence-inspiring man who was informative but not chatty, explained that they’d been trying to trace a pipe into our wing. The building was once several separate structures. Unfortunately, there are no complete plans documenting all the jerry-rigging that had been going on since the nineteenth century. The pipe they were after exited one building section from the first floor but was then directed sharply upward inside a three-foot-six-inch brick wall and may have entered our area through that always-locked studio on the second floor. That turned out to be the case. The place was full of mysteries like that.

  I would sometimes see the heating men in animated conversation at the end of a hallway. They were now working for me, and we employers are always suspicious that workers are discussing personal matters on our time. But whenever I managed to overhear anything, they seemed to be talking about pipes and elbows.

  Except for a core of salaried men, contractors generally hire people as the work comes in. The clipboard man told me that since they’d started our job, his company had hired two recent community college grads plus a master plumber—now laid off. They’d also brought back some regulars.

  A mature man who worked off and on installing heat sensors told me that back in the islands he’d been a factory engineer and also taught at a college. He hoped to find that kind of work in New York, but till the recession is over, he said, “This is my survival job.”

  A young American black man I’d not seen before emerged from the basement one day with sweat-soaked work clothes. I felt guilty pestering the tired fellow as he sank down onto the step and took a drink from his thermos. But he seemed happy to talk about his job. He said he’d been with the company for three years. He’d been off during the prior three weeks, but they needed him now to rip out these big old oil boilers.

  “Yes,” he confirmed, “it’s always off and on like that, but it’s a really good job.” I asked what he does in between. “I hate doing nothing, so I volunteer at churches and stuff … No, I’m not married. I’m concentrating on work first.” He had no special training for the job. “I’m a laborer, but learning lots of things as I work along.”

  It was good to know that he wasn’t making $7.50 an hour the way José had when he picked up construction work. Laborers had to get the union laborers’ wage on jobs covered by the Davis-Bacon Act.

  “We have to keep track and make sure to change wage scales when our people work on government jobs like weatherization,” the clipboard man explained.

  “Then I shouldn’t be taking up your expensive stimulus time with these questions,” I apologized.

  “I’m on salary,” he said with a slightly sardonic nod. “I wish I was hourly.” Then he checked something off on his clipboard, excused himself, and headed to the basement. That’s the last I saw of him. I went away for two weeks, and when I returned, our weatherization was complete. I miss having those purposeful well-paid workmen around.

  Did the weatherization stimulus work? It obviously created jobs for both experienced and new construction workers. And since these men (Tracy was the only woman I encountered) tended to spend their pay, the money had the multiplier effect planners hope for from a stimulus.

  We won’t be able to tally the energy savings either nationally or even in my one building for about a year. Everyone is keeping before-and-after records,
for, as Cleavon and José learned, “if you don’t have the paperwork correct … then it’s like you haven’t even done the job.”

  At this point I can only report anecdotally that before we were weatherized, apartments facing the river were chilly, while I had to keep my windows open to let the heat escape. Since that’s no longer true, it’s reasonably safe to say that our weatherization must have produced some energy savings. Assuming it was run efficiently, it was indeed a twofer. It both created jobs and lowered our utility bills. We’re also releasing less carbon into the atmosphere. So if you’re concerned with global warming, you might call it a three-fer.

  There are still millions of drafty houses in America, and we needed a much larger jobs program to have a Keynesian effect on recession unemployment. For these reasons I ought to favor extending the weatherization initiative. And I would, except for one serious drawback. We paid for it with borrowed money.

  “Don’t Borrow, Take!”

  When you borrow money, you have to pay it back with interest. When the government borrows, the money flows from all taxpayers to some investors. It’s true that Treasury securities were earning relatively low interest at the time, but a billion here, a billion there, it adds up.

  In my populist fantasy, bringing insulation to urban tenants was akin to electrifying rural households through the New Deal. There’s one big difference, though. The Roosevelt administration didn’t fund its projects by leaving rich people with all their wealth and handing them more.

  Between 1929 and 1939 taxes on capital gains rose from 12.5 percent to 30 percent; taxes on the top bracket of earned income rose from 25 percent to 79 percent. Not only did a U.S. Congress impose these redistributive taxes, but even more amazingly, rich people actually paid them. Like it or not, they chipped in to fund the New Deal.

  But between 1976 and 2008 the capital gains tax went down from 39.9 percent to 15.4 percent. Then, in 2010, two years into the recession, it went down a further four-tenths of a percent. Instead of asking people who arguably caused the mess to chip in for the cleanup, we’re paying them interest on the cleaning bills. Those cleaning bills include the $800 billion financial bailout. So we paid banks interest for the money we borrowed to give to them.

  Yes, I’d like to see more stimuli like weatherization. But if we pay for them by borrowing, then the rich get richer. Piles of investment capital grow at a time when there are still few productive ways to invest. But that led to the last bubble and will inflate the next one that much sooner. That’s why I offer the practical advice: “Don’t borrow, take!”

  Unfortunately, those were not the options on the floor. The U.S. Congress wasn’t choosing between debt-funded stimuli (borrowing) and tax-funded stimuli (taking). At the height of the crisis its debate had been between insufficient stimuli and no stimuli at all. We’d had our insufficient stimulus bill. Now, with twenty-four million officially unemployed or underemployed, Congress had decided to try no stimulus at all.

  (Actually, there was a third option I hadn’t noticed. As the special weatherization stimulus program expired, the government cut back the regular Weatherization Assistance Program that had existed since the Carter administration. So you might say we’ve opted for a counter-stimulus.)

  CONCLUSION

  Down Is a Dangerous Direction

  Not Your Normal Crisis

  Economists describe recessions as either V-shaped, meaning sharp down, then sharp back up; U-shaped, where the economy muddles around at the bottom for a while; or W-shaped—that’s the dreaded double dip. The Great Recession was experienced as a classic V by my three investors, but it morphed into an L for the Pink Slip Club Four, who live on wages.

  That may sound like the way the world works. “There’s nothing surer,” as the old song says, “the rich get rich and the poor get poorer.” But oddly enough, that eternal verity is usually suspended during recessions.

  During normal-shaped recessions, companies tend to maintain their plants and retain their core workers while they wait for business to pick up. In the meantime (in between time), they compete on price and take less profit.

  As a result, the share of national income that went to investors used to decline during a recession, while the share that went to employees increased. I’m not trying to tell you that workers got rich during previous recessions or that the rich became penniless like Richard Bey. But their shares of the total income took a temporary Robin Hood turn.

  This time it’s been different. Corporate profits were 25–30 percent higher at the official end of the Great Recession than before its onset. Meanwhile, wages as a share of national income fell to 58 percent. That’s the lowest the wage share of income had been since it began to be recorded after World War II. The Financial Times (my source for these statistics) calculated that “if wages were at their postwar average share of 63 percent, U.S. workers would earn an extra $740bn this year [2012] or about $5000 per worker.”

  Investors not only took a bigger share of the current national income during the recession years; they also found themselves in possession of more of the accumulated national wealth.

  According to the U.S. Federal Reserve Bank, the middle class (the middle 60 percent of us) lost a greater percent of its wealth during the Great Recession than either the poor or the rich. By 2010 the wealth of the median American family was lower than it had been in the 1990s. The Federal Reserve calculates that about three-quarters of the recession wealth loss was due to the housing bust. That makes sense since homes are where working Americans store the bulk of their wealth and their children’s inheritance. And during the recession, homeowners lost equity and entire houses while investors, like it or not, took possession.

  To understand how this wealth shift plays out over the generations, I got back to my GI coffeehouse friend Duane, or rather to his family.

  Duane’s children walked away from their inheritance because it was underwater. Whatever money their father put into the Arizona house was washed away when the bubble burst. I asked Duane’s son about the history of home ownership in his family.

  He knew that his grandparents owned their home in Cleveland and that Duane’s sister moved in after both grandparents died. But he didn’t know much about the financial details, so he put me in contact with his aunt Claire.

  I was surprised and touched by the things Claire remembered hearing from her brother about the GI coffeehouse. “That was forty years ago,” I demurred. But Duane had talked about the place so much, his sister responded, that “you’d think he got his honorable discharge from the Shelter Half [the name of the coffeehouse] instead of the army.” That made me feel bad once more about how I’d let our contact drop.

  Claire filled me in on the days after Duane’s discharge when he came back to Cleveland.

  “It was a kind of shitty time in the family,” she remembered. Her father, a welder, was out of work. “It started off as a normal layoff. Most years he was off a few weeks for retooling. But this one stretched out. Being home all day waiting meant he got involved with everything going on in the house. Our dad, well, let’s say he had a lot of opinions.

  “Anyway, the way I remember it, Duane was hardly at home because that’s when he met his wife. Dad had his opinions about her too.

  “No,” Claire said, “there was no big fight, just irritations. The whole family stayed close. Mom adored Duane, and he stayed especially close to my daughter. But it happened to be the first of the long layoffs for my father, and it was probably a good time for Duane and Sue to leave Cleveland.”

  Though their father’s unemployment affected the mood of the home, it never threatened the ownership. “It wasn’t like today,” Claire explained, “where you have all these bills to juggle. Losing the house was not on the horizon for my folks. Of course they may have tried to hide their worries from us, but as far as I know, even refinancing was never on the menu.”

  According to Claire, their father served in World War II and bought their home on the GI Bill. When t
heir mother died, Claire and Duane inherited the place free and clear. Since Claire and her husband lived in Cleveland and were ready for a larger home, they took out a mortgage to buy Duane’s half. It came to about $65,000.

  Duane put all or almost all of the money into the first house that he and his wife bought. As far as Claire knew, he transferred that equity from house to house each time he picked up stakes.

  “It’s too bad for his kids that he landed up in Arizona at the peak of the market, but real estate was never my brother’s reason for relocating anywhere. Duane wasn’t interested in scenery; he wasn’t interested in real estate. It was always about work he liked where he could keep learning. He always said he wanted to—

  “Keep ahead of it,” Claire and I said simultaneously, echoing Duane’s old refrain.

  “He was a supervisor on that last job,” she wanted me to know. “He might have been the only person he supervised; it was a small place. It had to do with lasers.”

  “So,” I said, bringing us back to real estate, “your parents owned a house they could leave to their two children free and clear, and now one of you owns a house that you can …”

  “Half a house,” Claire corrected me. “We paid down most of the loan for Duane’s share, but then we took money back out to help my daughter through college. Let’s say that my parents’ whole house was converted into a third of a house and a teaching degree.

  “It’s too bad for Duane’s kids about the Arizona house,” Claire repeated. “But we probably won’t be able to leave a house either. My husband used to work where they had a company pension, but we don’t have that now. I don’t see how we can retire without selling or somehow taking the rest of the equity out of this house. I like to think that what we passed along to our daughter is a way to earn her own living and buy her own house.”

  I assured Claire that she and her husband obviously passed many valuable things to their daughter in addition to a formal education. But it remains true that one couple in the grandparent or World War II generation had a house to leave free and clear. Two couples in the next generation will have somewhere between zero and a third of a house to leave.