(FORTUNE Magazine) – THE SOCIETY/COVER STORY 52 HOW THE AVERAGE AMERICAN GETS BY Middle-class squeeze may be the most potent force shaping American life and the economy over the next decade: Money is tight, jobs insecure, salaries frozen. For most families, two incomes are a necessity. But what the statistics don't capture is their hidden resources, complex community relationships, changing ambitions -- and their irrepressible spirit. by Lee Smith

EUROPE 68 OPPORTUNITY IN THE BALTICS Free again, Estonia, Latvia, and Lithuania must switch to a market economy -- fast. They're out to become bridges of free enterprise between the West and Russia. by Paul Hofheinz

CORPORATE PERFORMANCE 79 FINDING A PAYOFF IN ENVIRONMENTALISM In a plot twist worthy of Hollywood, green crusader John Bryson became chairman of the nation's second-largest utility. Now he plans to clean up the place. by Peter Nulty

86 COMPANIES TO WATCH Profits are in style at Jones Apparel Group, a maker of affordable, sophisticated fashions for career women. by Shelley Neumeier

Also: Insituform Mid-America, Zoom Telephonics, and CareNetwork.

SELLING 91 IF IT FEELS GOOD, IT MUST BE BAD That's the modern philosophy of ''non-ism.'' It's a hot button among baby- boomers, a strengthening force in Washington -- and there's lots of money to be made from it. by Frank Rose

100 SELLING SIN TO BLACKS

TECHNOLOGY 110 TECHNOLOGY TO WATCH A new kind of solar cell promises economical power from the sun at last. by David Kirkpatrick

EDUCATION/SPECIAL REPORT 114 WHERE WE GO FROM HERE At FORTUNE's Education Summit, executives, politicians, and educators agreed on how to fix America's schools -- from developing a curriculum that teaches the skills industry needs to more preschool education. Now to do it. by Nancy J. Perry

133 LESSONS FROM XEROX'S EX-BOSS Now Deputy Secretary of Education, David Kearns tells business leaders how to help make U.S. education worldclass. Clue: Think about the telegraph.

137 FOR STATES: REFORM TURNS RADICAL Officials are devising new standards, inventing new tests, and giving teachers more money and power. But will the voters pay for it all? by Ronald Henkoff

148 PRESCHOOL AROUND THE GLOBE The U.S. can't afford to ignore the happy results of early childhood education. Here are grade A lessons observed in six other countries -- from Japan to Czechoslovakia. A picture portfolio. by Susan Caminiti

161 HOW BUSINESS HELPS THE SCHOOLS CEOs of leading companies believe their considerable investment in public education is finally paying off, according to a recent Fortune poll. Check out the latest on our list of promising programs corporate America is putting into effect. by Joel Keehn

DEPARTMENTS 4 EDITOR'S DESK 8 INDEX 12 NEWS/TRENDS Pension plans -- the next bailout?, Detroit's fleet addiction worsens, the gridlock on car insurance, more airfare wars loom, Soviets head for the America's Cup, sexy sells rock Europe, and more.

21 FORTUNE FORECAST FORTUNE's economists explain why housing will struggle ahead. by Joseph Spiers

Plus Economic Intelligence: a new column of ideas, analysis, and commentary.

27 PERSONAL INVESTING A dangerous Dow? How to protect yourself from a stock market correction. by William E. Sheeline

Also: Get an Austro-Hungarian portfolio on the cheap, and Portfolio Talk with Ian MacKinnon of Vanguard Group, who tells which bonds are best.

35 LETTERS TO FORTUNE

193 FORTUNE PEOPLE John Sculley gives away the farm, the Hills Department Stores CEO can't kick the Sears habit, and more. by Andrew Erdman

195 BOOKS & IDEAS Crooks and con men on Wall Street: An ace reporter nails Boesky & Co., plus the latest from the author of Liar's Poker. by Andrew Ferguson

203 KEEPING UP Democrats and their girlfriends, sore horses in Ohio, and other matters. by Daniel Seligman

ABOVE: To keep costs down, the Bouxsein family of St. Charles, Missouri, stays close to home. Photograph by John Abbott.

COVER: Abbott went to the banks of the Mississippi River to take this portrait of the Zerrs.