Surprises Imaginary and Real Point to Continuing Hard Times for Many in Massachusetts

Last Friday, rounding the corner from Washington Street onto Milk Street in downtown Boston, I was surprised by a sign for a new business above a storefront at 25 Milk.

MILK STREET PAWN BROKERS, it said. FAST CASH!

Times are tough, I thought, but you know they're really tough when someone starts a pawn shop in the Financial District. Flashing across my mind was the image of a down-on-his-luck stockbroker darting through the door to hock his gold cuff links.

To my relief, I soon learned that MILK STREET PAWNBROKERS was part of the temporary, on-street set for the new Jeff Bridges-Ryan Reynolds movie they're shooting in Boston, "RIPD." The title stands for "Rest In Peace Department" and the film concerns the exploits of a police force composed of ghosts who battle evil spirits who have refused to leave this world, an absurd but fun concept. (Never underestimate a movie starring Jeff Bridges, who in the remake of "True Grit" just made us forget John Wayne.)

Making movies in Massachusetts is generally good for our economy, but I don't know how much it will help a situation highlighted in a recent report from the Donahue Institute at the University of Massachusetts, named for the late Maurice A. Donahue of Holyoke, who served as Massachusetts Senate President from 1964 to 1971.
A little over a month ago, two UMASS professors, Michael Goodman and Robert Nakosteen, published a report in the Institute's MassBenchmarks journal indicating that "economic inequality across the state has worsened notably in recent years."

Rising income inequality across Massachusetts "reflects a divergence of the destinies of many Bay State families, communities and regions," they wrote. "While this pattern is by no means new, it is clear that recent events have served to exacerbate the inequality that has become a disturbing fact of life in the contemporary Massachusetts economy."

Professors Goodman and Nakosteen found that income inequality has been increasing the most in Greater Boston, where "the medium family income in the top fifth of families was ten times that of their counterparts in the bottom fifth" by 2008. From 1999 to 2008, families in the top 20%, income-wise, saw their median annual income go from $150,295 to $232,879, an increase of 55%. The full Goodman-Nakosteen report may be found at http://www.massbenchmarks.org/

If you're looking for other statistics on the plight of middle- and lower-income earners, they're not hard to find these days. The September issue of Health Affairs magazine, for example, reported that rising health care costs are exacting "a heavy financial toll" on many families, leaving them with less and less disposable income. From 1999 to 2009, the income of an average American family of four jumped from $76,000 to $99,000, according to authors David Auerbach and Arthur Kellerman; however, those families had to spend almost all of those added take-home dollars on health care and related expenses because inflation in health care consistently exceeded the general inflation rate by significant percentages.

Then there was the New York Times report yesterday, (Companies to Pass On More Of Health Costs to Workers, 10/3/11), which said, "Companies next year will push more health care costs onto their workers, who may see an increase of nearly 11 percent in what they have deducted from their paychecks for health insurance, according to an annual study by Aon Hewitt, a large Chicago benefits consulting firm."

The article went on to say, "As companies struggle to control costs in a tough economy, the 2012 annual employee premiums are expected to jump an average 10.6 percent, to more than $2,300. That figure has nearly doubled since 2005, when workers at larger companies paid on average $1,192 annually per employee and paid about 17 percent of the company's costs, according to Aon Hewitt data...The employee share projected for next year is a contribution of 22 percent of the $10,475 employer cost of the health plan."

Continuing my perambulations last Friday, I had another surprise, this one prompted by an all-too-real event on the Rose Kennedy Greenway near South Station: the beginning of an "Occupy Boston" action that is part of a movement by people in large cities across the nation protesting economic imbalances and the lack of opportunities for younger members of the workforce.
The local protest started with nearly 1,000 people but had dwindled to about 100 hearty souls on Monday, folks who had been camping out in tents all weekend.

"We're bringing our message to the 99 percent of Americans that feel that their ability to provide for themselves has been eroded and that their representation in government has been undermined," said Nadeem Mazen of Cambridge, a spokesman for the group, as quoted in the Boston Globe.

Who would have predicted there would be a tent city in Boston this fall populated by victims of the Great Recession? It likely hints at surprises-to-come in the elections of 2012.