Many of us, these days, are feeling doom and gloom about the future of our economy and the employment outlook. We feel that things are bad and they’re going to get worse. We believe that unemployment will stay high. Wages and pay increases will stay low. And the cost of living or the prices we pay for food, clothing, shelter, transportation, etc. will sky-rocket.
Many economists disagree, including the 2010 Nobel Prize Winning Economist, Peter A. Diamond, PhD, Professor of Economics at the Massachusetts Institute of Technology. They point to the fact that this type of cycle― high unemployment followed by low unemployment followed by high unemployment followed by . . . has happened many times before, and it will happen again. At some point, they argue, the cycle will return to low unemployment, as a continuation of this cyclical pattern.
I, a citizen without any degrees in economics or any economic awards for my economic knowledge, disagree. But I do so for reasons that I am certain these outstanding economist would recognize as thoughtful and grounded in facts.
First, it is important to make my position perfectly clear: I believe that the high unemployment in the United States is part of an economic structural change ― the likes of which the United States have never seen before. I believe that this country will have high unemployment well into the foreseeable future. If or when the United States return to low unemployment, the salaries of the re-employed middle class workers are going to be dismally lower than it is today. And this will be occurring in spite of the fact that corporate profits will be at an all time high! But in due time many of these corporations will become bankrupt, bought out, or forced out of business by the corporations in the competitive nations, which are developing innovations, providing knowledge and skill training to their workforces, furnishing all their citizens affordable health care, producing the quality education necessary for accelerating their economic momentum, and implementing the strategies that one made the United States the greatest nation in the world!
I suspect that everyone who reads the position I expressed in the previous paragraph is probably thinking “On what pieces of evidence are you basing your opinion? What data caused you to arrive at these conclusions?
Let me respond by offering the following:
1. American corporate leverage throughout the world is lower than it has ever been in modern times. All the previous periods of high unemployment occurred during times when the United States and its corporations had greater world clout than they have today. We’re still the front runner, but they are others who are closing very fast. China, who is on a dead spring, will be passing us very soon, and it appears that many others will follow.
2. It is also important to note that all the previous periods of high unemployment occurred at times when American students were much closer to the top (world wide) in math and science than they are today. And during those times (in the past), the United States of America placed greater emphasis on training its workers, improving its schools, making higher education more affordable and accessible to everyone, and providing the type of safety nets in poverty stricken areas that increases the probability of producing successful education outcomes at every grade level.
3. It should be pointed out that while the United States is losing global leverage, its competitors are gaining global leverages. Moreover, some experts argue that many of them are becoming so technologically advance that their products are making our best products obsolete. They are predicting that they day will come when “anything and everything” made by Americans (at home and abroad) will no longer be in demand, because one of our competitors would have produced a more advance, a cheaper, and a longer lasting version.
4. Local, state, and federal governments provided a level of stability and comfort during the previous periods of high unemployment. In today’s period of high unemployment, those governments are becoming increasingly privatized, less transparent, less accountable, less interconnected, less public serving, and more self-serving. Americans are feeling greater stress, greater instabilities, more discomfort, more depression, and less hope for the future. We are losing confidence in ourselves and in our government.
There are several others, but these are the ones that are central in my opinion.
