The bad news is that America is likely to have a ‘lost decade’. The good news is that the Keynesians who embody famed mythical authority remain unharmed. As for the working stiff, well. . .
The new normal is the failure of growth. For the first time in American history, the entire US economy is moving toward part-time, low-wage income. How do we here at the Lumaj Group know?
The National Employment Law Project has studied low wage occupations, their results: part-time, low wage growth is three times as fast as any other work. The recession that ended in June of 2009 saw 21% loss in low wage/part-time occupations. Now these account for over 58% of all new hires. Wait, it gets better. Mid-wage occupations were 60% of the pre-recession economy. Now they are 22% of our recovery. A full 43% of the entire work force in America is now part-time, low wage work.
We didn’t even mention tax rates or a depreciated currency. Fact is, America is in numerical and political decline.
Industries that are expected by the Bureau of Labor Statistics to add the most jobs are heath care, social assistance (go figure) and retail. All are notorious for insecure work. Most don’t offer overtime protection or even minimum wage. Not to worry, fat boy Govmint gets its fair share!
Please note: for the American economy to absorb the labor forces new entrants, our economy must procure 3 million new jobs ever year. And that’s just to break even statistically! That won’t happen given globilization (read fleeing capital, cheaper markets) and technology (manufacturing in the United States is high tech.)
The long term trend is horrible: the American political economy is not stuck in a cyclical downturn in need of intervention. This is structural. What’s needed are new ideas about the relation between government and the individual. New ideas about sound money, wage growth, price stability, dis-inflation. Hint: Conservative ideas.
In case you forgot, Obama-care will accelerate this structural trend. Elections have consequences. If the GOP can’t gain political traction and fielding strong statesman, then we should accept the rigid stratified society that we’re becoming.
Our challenge is to avoid becoming stratified or ossified. Social mobility had remained the single most significant impact that was American liberty. But our current disparities in income, education and social behavior are reinforcing themselves, this is driven by digital domesticated technology as well as bad policy.
For America to end this trend we must confront the political and social policies that accompany decline.