In survey after survey, two of every three Americans believe that our nation is in decline. While the specific reasons for this pessimism are unclear, there is an undeniable “values shift” unfolding as younger workers are moving away from traditionally wealth-producing careers and toward often enlightened but less economically productive ones.
Problems in portions of our U.S. labor market are deep and intractable, yet there is no mistaking that the economy has moved from the hardheaded practical mentality that, over two centuries ago, first began building the nation’s remarkable and enduring wealth.
Many of America’s brightest minds have been abandoning industry and technical enterprise in favor of occupations in law, finance, consulting and nonprofit activism. In a report issued in 2007, 58 percent of male Harvard graduates and 43 percent of female graduates went into finance and consulting.
Consumption, debt, trade deficits higher
The transition to high-value services has seen consumption, debt and the trade deficit reach record high levels. One example is in traditional manufacturing, where firms are no longer able to hire skilled machinists. If they could do so, the nation’s 9.6 percent unemployment level would drop to 6.5, according to a recent study by the Minneapolis Federal Reserve Bank.
Today, economists I know tell me we are in the middle of a “near jobless recovery.” The poverty level has risen to 15 percent; home foreclosures are at a record high. All of this is compounded by the fact that real income for working families has been lagging for decades, as some potentially productive Americans have been unable to succeed in the workforce.
Though not often discussed in the general public, one in three of American children are living with one or no parents, too often in chaotic lifestyles involving domestic violence, hunger, housing and education challenges. For them, there is little likelihood of economic self-sufficiency in adulthood.
Some hopeful economic signs
Recent economic data has indicated some favorable trends as U.S. private employers added more than 100,000 jobs in July and August. There appears to be little danger of a new downturn in activity as unemployment claims have been reduced, the trade deficit is narrowing some and there has been an uptick in key segments of the stock market.
The nine in ten of our workforce population who have jobs are apparently gaining greater confidence and are spending some of their hard-earned dollars on bargain-priced goods. Additionally, many Americans are beginning to save their dollars, portending, perhaps, a permanent newfound frugality.
Over 90 percent of Minnesota employers’ report that they are planning to maintain or add to their workforce. Even Warren Buffet is saying with some confidence that his businesses are coming back.
All of this adds up to hopeful signs for the stuttering economic recovery.
Opinion polls assessing prospects for the 2010 election further suggest that voters this year — dissatisfied with President Barack Obama and Democratic majorities in the Congress for their management of the economy — could punish Democrats and turn over control of the U.S. House of Representatives, and perhaps even the U.S. Senate, to Republicans in November.
While anti-government public sentiment is stronger than in the recent past, it remains unclear how a partial regime change in Washington will make any substantive difference in the current economic swirl.
Chuck Slocum is president of The Williston Group, a management consulting firm. He can be reached at Chuck@WillistonGroup.com.