The New York Times

February 5, 2001

David Callahan

Consumer confidence is plummeting and companies are cutting back, but I, for one, am not mourning. The 90s boom left me both financially battered and psychically troubled, and I don't think I'm alone. As the economy has slowed, I'll confess that my main reaction has been relief.

In the past five years, while the New York economy surged, the rent on my apartment in Manhattan nearly doubled. I've hung on, but barely. New York has become less and less affordable for middle-class people like me who don't happen to work on Wall Street or in corporate law firms. One-bedroom apartments are hard to find for less than $2,500 a month. And ownership seems impossible: in the last quarter of 2000, the average sale price of a co-op or condo in Manhattan below 96th Street was $787,708 - up from $395,035 in 1990.

Total wages and salaries for workers in the city, meanwhile, increased by only 19 percent between 1989 and 1998, according to the Fiscal Policy Institute. Low-income workers experienced the smallest gains. And as rising real estate prices have sent middle class New Yorkers into poorer areas, those a rung or two lower on the economic ladder have been pushed aside. Many low-income people are now doubled or tripled up in conditions that Jacob Riis would recognize. Others are rent-poor, forced to choose every month between food, rent and medicine.

New York is not alone. You might make good money at Yahoo, but try buying a house in Silicon Valley, where groups of computer programmers share ranch houses while janitors live in garages or sleep on buses.

Commercial rents went skyward in the 90's, too, with devastating effects on nonprofit organizations in many cities. The good times have been anything but good if you run a dance school, a theater or a public service organization with a lease that expired in the past two years in one of the places plugged into the new economy.

Now, one thing looks certain: real estate costs will come down. It's happening already in Manhattan. For renters and prospective home buyers like me, whose jobs are secure, that means the cooling economy has tangible financial benefits. To be sure, I feel bad for the swelling ranks of people who have been laid off.

But until we find a way to share the country's wealth more equitably during boom times, making sure that income gains aren't wiped out by rising costs in housing and health care, it's hard to get too excited about surges in national prosperity.

There is a larger solace, too, in the rumors of recession. The economy of the late 1990's offered the promise of such extraordinary wealth that it inevitably brought out the worst in people. Materialistic values came to pervade our culture. The ideal of working hard over many years to achieve wealth lost traction. The pressure to pursue wealth instead of other goals grew enormously as the media focused on those winning big in the new economy. It became easy to feel that missing the gold rush was plain stupid.

I've seen the resulting distortion of values everywhere in Generation X - my generation - and in those younger than we are. It's hard to stick to a goal related to something other than money - working at an artistically creative or socially useful job, for example - if you don't make enough money to rent a one-bedroom apartment. It is even harder when everybody else seems to be getting rich and there's no support in the mass culture for your choice. Who wants to be a school teacher when you can be a millionaire?