Our new economy

It is probably safe to say that most people would agree that the country has experienced some sort of a recovery from the deepest part of the recession. After that there doesn’t seem to be much agreement about anything else. I think this is the old classic about blind men examining an elephant and coming to different conclusions about what it looked like based on what part they experienced. If you look at some part of our economy, there are clearly problems. Of course in other parts there are clearly opportunities. So is there an overall bottom line?
If you look at trends over time we can see a very clear trend in the direction of improvement. However, there are many who believe the trends won’t last because they depended on the massive Government stimulus and when that stops they will reverse and bring us back to the low points. Of course the question here is does the country fundamentally work?
If you consider the next 10 or 15 years, the country, as always is transitioning. The current transition continues the recent trend where we are becoming more and more reliant on technology and cheap foreign labor to sustain wealth. Neither of these two trends is going to create a great number of jobs in this country, in fact they will have the opposite impact. This is probably going to exacerbate the shift in wealth to fewer and fewer people.
If you don’t have the right education and skills, you are going to be competing for low skill, low pay jobs that are disappearing. The only real answer to this is to reduce the cost of labor in this country to the point where the jobs are cheaper here than elsewhere. That is really not too likely. So, if you are in that group you will face high unemployment, lower pay and become more and more reliant on the Government. Unless we develop a new growth industry that will create a tremendous number of jobs, I have to say we will develop a somewhat permanent situation of high unemployment among lower skilled people amidst a fairly prosperous society that will try to ignore them.